investment

ENBRIDGE INC. $38.65 (Toronto symbol ENB; Shares outstanding: 796.9 million; Market cap: $30.8 billion; TSINetwork Rating: Above Average; Dividend yield: 2.9%; www.enbridge.com) recently finished repairing its leaking oil pipeline in Wisconsin. The company has faced criticism over leaks like this. That could hurt its proposed $5.5- billion Northern Gateway project, which would pump oil from Edmonton to Kitimat, B.C. However, Enbridge still has a strong safety record, and it has pledged to spend an extra $500 million on safety for Northern Gateway. This investment includes thicker steel at river crossings, 50% more inspections and aroundthe- clock staffing at remote pumping stations....

Some economists and advisors say they are puzzled as to why the U.S. stock market has kept on rising since mid-year. After all, negative predictions abound. Pessimists say the world is headed for a decade of slow growth, the eurozone is headed for a breakup, the U.S. and other nations are close to losing control of their growing national debts, and so on. These, however, are all just predictions, and predictions often flop. But investors do recognize that President Obama has done things that scare off business and stock market investors. If Obama loses in November, investor and business confidence could spring back quickly. For instance, early in the new president’s term, he tried to institute a policy called Card Check that would eliminate the legal requirement of a secret ballot in new union-certification votes. Instead of voting in a secret ballot to accept or reject union representation, workers would simply sign (or refuse to sign) a card in favour of accepting the union....

When a company splits its shares, it is simply cutting itself up into a different number of pieces without changing its fundamental value. It simply wants its stock to trade in a price-per-share range that seems reasonable to investors. Mechanics of a split: If a stock’s price rises much beyond $50 a share in Canada (or $100 a share in the U.S.), some investors may shun it, since it seems expensive. The company’s management may then declare a stock split of, say, two for one. This turns one “old” share into two “new” shares. If you owned 100 shares of a $60 stock, you now own 200 shares of a $30 stock. You don’t need to take any action. After a conventional stock split, good news often follows. Companies mainly split their shares when they want to draw attention to themselves—because they expect earnings to rise faster than normal, say. At such times, they may also raise their dividends. However, sometimes companies get overly optimistic. Their profits come in far below expectations, and they can’t keep paying the new, higher dividend. So a stock split can be good or bad, depending on the details....

Mart Resources, $1.35, symbol MMT on Toronto (Shares outstanding: 355.9 million; Market cap: $480.5 million; www.martresources.com), is focused on developing, producing and drilling for oil at its properties in Africa. The company is currently producing oil at its 50%-held Umusadege field in Nigeria. Mart’s shares moved up over the last year on rising production and cash flow. Most recently, the shares jumped when the company paid a special dividend of $0.10 a share on August 8, 2012. It also announced that it will begin paying quarterly dividends of $0.05 a share starting this month. Mart’s exposure to Nigeria entails considerable political risk. The stock is still a buy, but only for highly aggressive investors....

Pat McKeough responds to many personal questions on potential stock picks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for the Inner Circle. This week, an Inner Circle member asked about a medical products stock that specializes in breathing and sleeping problems. This U.S. firm, which makes equipment to deal with respiratory disorders such as sleep apnea, is growing through acquisitions and the development of new products. ...

We continue to advise that you shouldn’t let the current or recent investment situation play too big a role in setting your investment objectives and investment strategy. Instead, try to pursue what you might call an “evergreen” investment approach. You want to invest in such a way that you profit in good times but don’t suffer too badly during the inevitable market setbacks. Above all, you want to make sure that you don’t make the mistake of losing out on some of your best investments....

CAMECO CORP., $21.48, symbol CCO on Toronto, has agreed to buy the Yeelirrie uranium project in Western Australia from BHP Billiton, symbol BHP on New York. BHP is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks. Cameco is the world’s largest uranium producer. It supplies over 25% of global production and has large, high-grade reserves, low-cost operations, significant market share and a number of uranium mines. Cameco will pay $430 million U.S. for Yeelirrie when the deal closes by the end of 2012. The company held cash and investments of $894.9 million (Canadian) on June 30, 2012, so it can comfortably afford this purchase....

The more you know about investing, the more successful you will be. That has been Pat McKeough’s approach through four decades as an investor and investment counsellor. He regularly presents his views on specific investment topics—and specific stocks—on video in order to share the insights he has gathered over the years. Today’s topic is one of the world’s leading tech stocks. In the contest to see which company would become the dominant Internet search engine, Google (symbol GOOG on Nasdaq) was the clear winner. It has built upon that foundation. Four years ago, the company launched its Android operating system for smartphones and tablet computers. This year, it purchased cellphone maker Motorola Mobility. Now it has announced a key re-organization that will make its richly-priced shares more liquid. We give an explanation of Google’s share initiative followed by Pat’s commentary. ...

ISHARES CDN REIT SECTOR INDEX FUND $17.25 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 13 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of the ETF’s value.

iShares CDN REIT’s expenses are 0.55% of its assets. The fund yields 4.3%.

RioCan REIT is the fund’s largest holding at 22.0%, followed by H&R REIT (12.2%), Dundee REIT (8.9%), Canadian REIT (7.7%), Calloway REIT (7.5%), Boardwalk REIT (6.8%), Cominar REIT (6.4%), Canadian Apartment Properties REIT (6.2%), Primaris Retail REIT (5.7%), Artis REIT (5.0%), Allied Properties REIT (4.5%), Chartwell Seniors Housing REIT (2.9%), and Northern Property REIT (2.8%).

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RIOCAN REAL ESTATE INVESTMENT TRUST $28.36 (Toronto symbol REI.UN; Units outstanding: 285.9 million; Market cap: $8.1 billion; TSINetwork Rating: Average; Dividend yield: 4.9%; www.riocan.com) is purchasing the Georgian Mall, a shopping centre in Barrie, Ontario, with over 150 stores. This will be RioCan’s largest, most prominent enclosed mall property.

The trust will pay $318 million for the shopping centre when the deal closes in the third quarter of 2012. That’s equal to 93% of the $342 million, or $1.20 a unit, that RioCan earned in the first quarter of 2012.

This mall is 97% leased and gets 91% of its rental revenue from national chains. That cuts the risk of this purchase. Moreover, Barrie’s population should rise by 20% over the next decade.

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