maple leaf foods
Toronto symbol MFI, is Canada’s largest food processing company. Its products include fresh and prepared meats and poultry, mostly under the Maple Leaf and Schneider brands. It also makes fresh and frozen bakery products through 89.8%-owned Canada Bread Co. Ltd.
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice, based on our stock market research. Each Investor Toolkit update gives you a fundamental piece of investment strategy, and shows you how you can put it into practice right away. Tip of the week: “Goodwill should play an important role in your stock market research” When we’re looking for stocks to recommend in our newsletters and investment services, we put a lot of importance on the amount of goodwill that a company carries as an asset on its balance sheet....
CANADIAN IMPERIAL BANK OF COMMERCE, $82.25, Toronto symbol CM, reported sharply higher earnings this week. In its 2011 first quarter, which ended January 31, 2011, the bank’s earnings rose 22.5%, to $799 million, or $1.92 a share. A year earlier, it earned $652 million, or $1.58 a share. If you exclude unusual items, such as writedowns of securities the bank holds and a gain on the sale of a business, earnings per share would have risen 19.6%, to $1.95 from $1.63. On this basis, the latest earnings beat the consensus estimate of $1.77 a share. Revenue rose 1.3%, to $3.10 billion from $3.06 billion....
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice. Each Investor Toolkit update gives you a fundamental piece of investment strategy, and shows you how you can put it into practice right away. Tip of the week: “Smart investing limits the danger of lawsuits.” Lawsuits are an everyday risk in business. For example, U.S. lawnmower engine maker Briggs & Stratton (symbol BGG on New York) recently paid $18.7 million U.S. to settle a lawsuit that accused the company of using misleading labels on its lawnmower engines....
SUNCOR ENERGY INC., $40.61, Toronto symbol SU, reported better-than-expected earnings this week. As well, the turmoil in Egypt has pushed up oil prices, and helped lift Suncor’s share price. In 2010, Suncor’s earnings jumped 113.4%, to $2.7 billion from $1.3 billion in 2009. Earnings per share rose 64.6%, to $1.74 from $1.06, on more shares outstanding. These figures exclude several unusual items, including gains on sales of assets Suncor received as a part of its 2009 takeover of Petro-Canada. On this basis, the 2010 earnings easily beat the consensus estimate of $1.57 a share. Cash flow per share rose 82.1% in 2010, to $4.26 from $2.34. Revenue gained 38.2%, to $34.4 billion from $24.8 billion....
Saputo Inc. (Symbol SAP on Toronto) is Canada’s largest producer of dairy products, including milk, butter and cheese. The company also makes snack cakes and tarts. Aside from Saputo, the Canadian stock pick’s main brands include Neilson, Stella and Dairyland. The company also has operations in the U.S., Argentina and Europe. In its second quarter, which ended September 30, 2010, Saputo earned $125.5 million, or $0.60 a share. That’s up 32.8% from $94.5 million, or $0.45 a share, a year earlier. The company reported revenue of $1.56 billion in the latest quarter, up 5.3% from $1.48 billion....
SAPUTO INC. $37 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 206.3 million; Market cap: $7.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) has fallen from its recent peak of $40 in November 2010. That’s mainly because possible listeria contamination forced it to recall cheese produced at one of its Quebec plants. The same bacteria forced Maple Leaf Foods Inc. (Toronto symbol MFI) to recall meat from its Toronto plant in 2008. However, this recall is much smaller. As well, there have been no reports of illness, so Saputo will likely not have to pay a large class-action settlement, as Maple Leaf did. Saputo continues to grow by purchasing other firms and assets. It is particularly interested in buying dairies in the U.S. and Australia. Growing by acquisition is more risky than internal growth, but Saputo has a long history of cutting costs at its new businesses....
TORONTO-DOMINION BANK, $72.23, Toronto symbol TD, fell 4% this week, even though the bank reported higher revenue and earnings in its 2010 fiscal year, which ended October 31, 2010. Revenue rose 9.6%, to $19.6 billion from $17.9 billion in fiscal 2009. Earnings rose 10.9%, to $5.2 billion from $4.7 billion. Earnings per share rose 7.9%, to $5.77 from $5.35, on more shares outstanding. These figures exclude unusual items, such as costs to integrate the recently purchased South Financial Group, Inc., which operates bank branches in Florida and the Carolinas. On this basis, the latest earnings fell short of the consensus estimate of $5.81 a share. The bank continues to set aside less money to cover bad loans. That’s the main reason why earnings at TD’s retail-banking business rose 53.7% in the U.S. and 25.2% in Canada. Earnings from wealth management rose 7.4%. However, earnings from TD’s trading business fell 23.8%, due to lower trading volumes, a drop in underwriting activity, and fewer gains from its investment portfolio....
BANK OF NOVA SCOTIA, $53.59, Toronto symbol BNS, is buying the 82% of DundeeWealth Inc. (Toronto symbol DW) that it does not already own. DundeeWealth manages investments and operates a brokerage business. The company also owns the Dynamic family of mutual funds, and provides financial-planning and investment advice. DundeeWealth is a recommendation of Stock Pickers Digest, our newsletter for aggressive investing. The deal will double the size of Bank of Nova Scotia’s mutual-fund business, and make it the fifth-largest mutual-fund company in Canada. It gives also gives the bank a number of new growth opportunities: Bank of Nova Scotia will now be able to sell more of its products and services to DundeeWealth’s high-quality clientele. As well, the bank may sell Dynamic funds through its branches in Asia and Latin America. Moreover, by expanding its wealth-management business, Bank of Nova Scotia is putting itself in a position to profit as more baby boomers approach retirement....
CGI GROUP INC., $16.68, Toronto symbol GIB.A, is Canada’s largest provider of computer-outsourcing services. The company’s services help its customers automate certain routine functions, such as accounting and buying supplies. That makes its clients more efficient, and lets them focus on their main businesses. This week, the company reported earnings that exceeded the consensus estimate. This caused the stock to gain 8%. On August 17, 2010, CGI paid $923.2 million for Stanley Inc., which provides computer-outsourcing services to military and civilian agencies of the U.S. government. If you exclude costs to integrate these new operations, the company earned $342.0 million in its 2010 fiscal year, which ended September 30, 2010. That’s up 14.0% from $300.0 million a year earlier....
On Thursday, October 29, two directors of Maple Leaf Foods Inc. (symbol MFI on Toronto) from the Ontario Teachers’ Pension Plan resigned their positions. Maple Leaf is Canada’s largest food processor. It sells most of its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. The company is one of the stock market picks we’ve long recommended in our Successful Investor newsletter.