merger

APPLE INC., $571.94, Nasdaq symbol AAPL, rose 9% this week after it announced several moves to enhance its investment appeal. These initiatives include raising its quarterly dividend by 7.9%, to $3.29 a share from $3.05. The new annual rate of $13.16 yields 2.3%. Apple also increased its share buyback program by $30 billion. It can now repurchase up to $90 billion worth of its stock by the end of 2015. That’s equal to 18% of its $492.9-billion market cap. Apple will also split its outstanding shares on a 7-for-1 basis in June 2014. In addition to making its shares more affordable, the split would make Apple a candidate for the Dow Jones Industrial Average. If Apple does join the widely followed Dow, mutual funds and exchange traded funds that mimic the index would have to buy the stock, which would push up the share price....

Aurinia Pharmaceuticals, $3.79, symbol AUP on Toronto (Shares outstanding: 12.4 million; Market cap: $46.9 million; www.auriniapharma.com), was formed from the recent merger of Isotechnika Pharma and Aurinia Pharmaceuticals. In tandem with the merger, Aurinia has completed a $6-million issue of 133.3 million units at $0.045 each (pre-consolidation—see next paragraph), with each unit consisting of one common share and half a common share purchase warrant. Each full warrant lets the holder buy one share at $0.05. Because its share price was so low, the company then consolidated its shares on a 1-for-50 basis on October 23, 2013. This reduced the recent share issue to a post-consolidation total of 2.7 million shares. Aurinia now has 12.4 million shares outstanding and a market cap of $46.9 million....

THOMSON REUTERS CORP. $40 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 827.2 million; Market cap: $33.1 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.thomsonreuters.com) gets 55% of its revenue by selling news and information to professionals in the banking industry. The remaining 45% comes from providing specialized information products to clients in the legal, accounting and scientific research fields.




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THOMSON REUTERS CORP. (Toronto symbol TRI; www.thomsonreuters.com) gets 55% of its revenue by selling news and information to professionals in the banking industry. The remaining 45% comes from providing specialized information products to clients in the legal, accounting and scientific research fields....

THOMSON REUTERS CORP. $40 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 827.2 million; Market cap: $33.1 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.thomsonreuters.com) gets 55% of its revenue by selling news and information to professionals in the banking industry....

HEWLETT-PACKARD CO. (New York symbol HPQ; www.hp.com) is a leading maker of personal computers and printers. It also makes server computers and networking products for businesses....

CONAGRA FOODS INC., $31.88, New York symbol CAG, fell 5% this week after the company warned that weaker-than-expected demand for its brand name foods, such as Hunt’s ketchup, Peter Pan peanut butter and Slim Jim meat snacks, is hurting its earnings. As a result, the company now expects that it earned $0.37 a share in the first quarter of its 2014 fiscal year, which ended August 31, 2013. This forecast excludes unusual costs related to its recent purchase of Ralcorp Holdings, the largest maker of private label food in the U.S. Even so, ConAgra’s forecast is well below the consensus estimate of $0.45 a share. The company is now adjusting its pricing and marketing strategies to spur its sales, but lower ingredient costs and savings from the Ralcorp merger will still let it meet its debt repayment goals in fiscal 2014 and 2015....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice on specific stocks and other investments as well as questions on investment strategy and the economy. 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 members of Pat’s Inner Circle....

ARCH Therapeutics, $0.44, symbol ARTH on the U.S. over-the-counter bulletin board (Shares outstanding: 58.6 million; Market cap: $25.8 million; www.archtherapeutics.com), is a life science company that is focused on developing AC5, a product aimed at controlling bleeding and fluid loss during surgery and other medical procedures. Surgical and trauma patients are at significant risk of illness and death from bleeding or leaking body fluids. More surgery is being performed as the population ages. As a result, use of hemostatic agents and sealants is increasing. Hemostasis is a process that causes bleeding to stop (that is, blood stays within a damaged blood vessel). The opposite of hemostasis is hemorrhage. Medical personnel squirt AC5 over wounds to stop or control bleeding. The product contains peptides that are intended to form gel-like barriers over wounds. ARCH believes that the results of early preclinical tests (the earliest stage of testing, before human testing) have shown that AC5 achieves hemostasis quickly and effectively....

LOBLAW COMPANIES LTD. $46 (Toronto symbol L; www.loblaw.ca) announced yesterday that it has a friendly deal to purchase Shoppers Drug Mart Corp. (Toronto symbol SC) for $12.4 billion in cash and stock. The transaction, which combines Canada’s largest grocery and pharmacy chains, will be the biggest takeover in Canadian retail history. Shares of Loblaw rose 5% yesterday on the news. Loblaw had already risen 42% for us since its announcement in December 2012 that it would set up 75% of its real estate holdings as a publicly traded real estate investment trust (REIT) under the name Choice Properties REIT (Toronto symbol CHP.UN)....