investment
An investment is an asset or property acquired to generate income or gain appreciation. Appreciation is the increase in the value of an asset over time. It requires the outlay of a resource today, like time, effort, and money, for a greater payoff in the future or for generating a profit.
An investment involves using capital in the present to increase an asset’s value over time.
Investments may include bonds, stocks, real estate, or alternative investments.
Investments can be diversified to reduce risk, though this may reduce the amount of earning potential.
In business contexts, investments are financial; however, consider how some people spend time to make higher incomes in the future (i.e. invest in a college education).
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Yellow Media Inc., $0.075, symbol YLO on Toronto (Shares outstanding: 515.2 million; Market cap: $38.6 million; www.ypg.com), has reached an agreement with 30% of its bondholders to recapitalize and postpone $700 million of debt payments that are due over the next year. The company needs the approval of two-thirds of its creditors for the recapitalization to go through. Yellow Media is the largest telephone directory publisher in Canada, and owns the Yellow Pages and Pages Jaunes trademarks. It also operates websites devoted to classified advertising. Yellow Media’s recapitalization is designed to cut its huge $2.0 billion debt. The move will convert $1.8 billion of that debt into $850 million of new debt that will not be due until 2018 and 2022. The recapitalization will also give the debtholders $250 million in cash and 82.5% of a new class of common shares that will replace the old common shares....
While a high p/e ratio can be a sign that a stock is overvalued, it can also be a signal that investors recognize the company’s future earnings potential. One example of a well-established stock with a high p/e ratio is the world’s most recognizable fast-food chain. MCDONALD’S CORP. (New York symbol MCD; www.mcdonalds.com) is the world’s largest fast-food company by sales. Its 33,735 restaurants in 119 countries serve a wide variety of foods, but they are best known for their hamburgers and french fries....
CANADIAN PACIFIC RAILWAY $75.81 (Toronto symbol CP; Shares outstanding: 171.2 million; Market cap: $13.0 billion; TSINetwork Rating: Average; Dividend yield: 1.9%; www.cpr.ca) has appointed Hunter Harrison as a director and its new chief executive officer.
Mr. Harrison is the former CEO of Canadian National Railway Co. (Toronto symbol CNR). He’s also the choice of prominent U.S.-based activist investment firm Pershing Square Capital Management, which owns 14.2% of CP.
The company believes Mr. Harrison will duplicate his success at CN, which included improving efficiency and speeding up deliveries. New trains and the recent drop in oil prices should also boost CP’s profits.
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Mr. Harrison is the former CEO of Canadian National Railway Co. (Toronto symbol CNR). He’s also the choice of prominent U.S.-based activist investment firm Pershing Square Capital Management, which owns 14.2% of CP.
The company believes Mr. Harrison will duplicate his success at CN, which included improving efficiency and speeding up deliveries. New trains and the recent drop in oil prices should also boost CP’s profits.
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ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $62.32 (New York Exchange symbol ECH; buy or sell through brokers) is an ETF that aims to track the MSCI Chile Investable Market Index. This index consists of stocks that are mainly traded on the Santiago Stock Exchange.
The fund’s top holdings are LAN Airlines SA (Chilean national airline), 9.4%; Empresas Copec SA (conglomerate), 8.5%; Quimica y Minera de Chile (mining), 8.2%; Empresa Nacional de Electricidad (electric power), 6.8%; Cencosud SA (retailer), 6.5%; Banco Santander Chile (banking), 6.1%; Enersis AS (electric power), 5.9%; Empresas CMPC (pulp and paper), 4.8%; S.A.C.I. Falabella (retail), 4.7%; and CAP SA (iron mining and steel), 4.1%.
The fund’s industry breakdown is as follows: Utilities, 23.7%; Industrials, 21.6%; Financials, 16.9%; Materials, 15.6%; Consumer Staples, 11.1%; Consumer Discretionary, 11.1%; Telecommunications, 3.3%; and Information Technology, 1.5%.
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The fund’s top holdings are LAN Airlines SA (Chilean national airline), 9.4%; Empresas Copec SA (conglomerate), 8.5%; Quimica y Minera de Chile (mining), 8.2%; Empresa Nacional de Electricidad (electric power), 6.8%; Cencosud SA (retailer), 6.5%; Banco Santander Chile (banking), 6.1%; Enersis AS (electric power), 5.9%; Empresas CMPC (pulp and paper), 4.8%; S.A.C.I. Falabella (retail), 4.7%; and CAP SA (iron mining and steel), 4.1%.
The fund’s industry breakdown is as follows: Utilities, 23.7%; Industrials, 21.6%; Financials, 16.9%; Materials, 15.6%; Consumer Staples, 11.1%; Consumer Discretionary, 11.1%; Telecommunications, 3.3%; and Information Technology, 1.5%.
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ISHARES MSCI GERMANY FUND $20.18 (New York Exchange symbol EWG; buy or sell through brokers) is an ETF that aims to track the stocks in the MSCI Germany Index.
This index aims to replicate 85% of the total market capitalization of the German stock market. The remaining 15% is unavailable for investment, partly due to limitations on foreign ownership.
The ETF’s top holdings are Siemens AG (engineering conglomerate), 9.0%; BASF (chemicals), 8.3%; Bayer (diversified chemicals), 7.5%; SAP (software), 7.1%; Allianz (insurance), 5.7%; E.ON (energy), 4.7%; Deutsche Bank AG, 4.4%; Deutsche Telekom, 4.0%; and Linde AG (industrial gases), 3.5%.
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This index aims to replicate 85% of the total market capitalization of the German stock market. The remaining 15% is unavailable for investment, partly due to limitations on foreign ownership.
The ETF’s top holdings are Siemens AG (engineering conglomerate), 9.0%; BASF (chemicals), 8.3%; Bayer (diversified chemicals), 7.5%; SAP (software), 7.1%; Allianz (insurance), 5.7%; E.ON (energy), 4.7%; Deutsche Bank AG, 4.4%; Deutsche Telekom, 4.0%; and Linde AG (industrial gases), 3.5%.
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RIOCAN REAL ESTATE INVESTMENT TRUST $27.87 (Toronto symbol REI.UN; Units outstanding: 285.0 million; Market cap: $8.0 billion; TSINetwork Rating: Average; Dividend yield: 5.0%; www.riocan.com) planned to spend $600 million on acquisitions in 2012. That’s equal to 8% of its $7.9-billion market cap. The trust spent $1 billion on acquisitions in 2011.
However, RioCan will likely spend less than it planned this year, due to the rising cost of properties in Canada’s big cities. Instead, the trust plans to upgrade its existing malls. Right now, it is focusing on projects in Toronto and Calgary.
The trust continues to pay monthly distributions of $0.115 a unit, for a 5.0% annualized yield. In light of its improving outlook, RioCan aims to raise its payout in 2013.
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However, RioCan will likely spend less than it planned this year, due to the rising cost of properties in Canada’s big cities. Instead, the trust plans to upgrade its existing malls. Right now, it is focusing on projects in Toronto and Calgary.
The trust continues to pay monthly distributions of $0.115 a unit, for a 5.0% annualized yield. In light of its improving outlook, RioCan aims to raise its payout in 2013.
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CANADIAN REIT $42.04 (Toronto symbol REF.UN; Units outstanding: 67.8 million; Market cap: $2.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.6%; www.creit.ca) owns over 190 properties, including retail, industrial and office buildings, located across Canada and in the Chicago area. These properties contain over 19 million square feet of leasable area. Its occupancy rate is 95.0%.
In the three months ended March 31, 2012, the real estate investment trust’s revenue rose 9.7%, to $89.2 million from $81.3 million a year earlier. Cash flow per unit rose 7.7%, to $0.56 from $0.52.
The trust bought $298.6 million of properties in 2011, including its June purchase of two fully leased malls in Mississauga, Ontario, for $174.4 million. In March 2012, it bought 50% of the 310,000- square-foot Altius Centre in Calgary for $92.3 million. In April, it paid $156.0 million for 50% of Calgary Place, a 575,000-square-foot office and retail complex.
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In the three months ended March 31, 2012, the real estate investment trust’s revenue rose 9.7%, to $89.2 million from $81.3 million a year earlier. Cash flow per unit rose 7.7%, to $0.56 from $0.52.
The trust bought $298.6 million of properties in 2011, including its June purchase of two fully leased malls in Mississauga, Ontario, for $174.4 million. In March 2012, it bought 50% of the 310,000- square-foot Altius Centre in Calgary for $92.3 million. In April, it paid $156.0 million for 50% of Calgary Place, a 575,000-square-foot office and retail complex.
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; Units outstanding: 55.9 million; MaALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $29.35 (Toronto symbol AP.UN rket cap: $1.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.5%; www.alliedpropertiesreit.com) owns 100 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 7.8 million square feet of leasable area.
Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to office and retail space. They usually feature exposed beams, interior brick and hardwood floors.
In 2011, the trust bought 22 properties for $456 million. In the first quarter of 2012, it bought 10 more buildings for $185.2 million.
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Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to office and retail space. They usually feature exposed beams, interior brick and hardwood floors.
In 2011, the trust bought 22 properties for $456 million. In the first quarter of 2012, it bought 10 more buildings for $185.2 million.
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FAIRFAX FINANCIAL HOLDINGS, $377.99, symbol FFH on Toronto, has increased its stake in Research in Motion, symbol RIM on Toronto. The company now owns 9.9% of RIM, up from 5.12%. RIM is a recommendation of our Successful Investor newsletter. Fairfax is now RIM’s largest shareholder. The company’s chairman and founder, Prem Watsa, is also on RIM’s board of directors. RIM’s revenue fell 42.7% in the latest quarter. That’s largely because customers are waiting for the company to launch updated phones that use its new BlackBerry 10 software. However, RIM has now delayed these devices to early 2013. As a result, they will miss the busy back-to-school and Christmas shopping seasons....
CANADIAN PACIFIC RAILWAY LTD., $83.18, Toronto symbol CP, reported higher-than-expected earnings this week. That caused the stock to rise 10%. In the three months ended June 30, 2012, the company’s earnings fell 19.5%, to $103 million, or $0.60 a share. It earned $128 million, or $0.75 a share, a year earlier. A nine-day strike by CP’s locomotive engineers, conductors and yard workers cut its earnings by around $0.30 a share in the latest quarter. In addition, the company paid severance costs to its previous CEO and other expenses related to the hiring of Hunter Harrison as its new chief executive. These costs cut CP’s earnings by a further $0.30 a share....