merger

BCE INC. $26.55 (Toronto symbol BCE; SI Rating: Above-Average) is reorganizing its businesses to unlock shareholder value. The company will combine its traditional telephone operations in rural areas of Ontario and Quebec with those of 53.2%-owned ALIANT INC. $35.30 (Toronto symbol AIT; SI Rating: Above average) into a new income trust called Bell Aliant Regional Communications Income Fund. BCE will assume control over Aliant’s wireless and other operations. BCE shareholders will receive 0.0725 trust units for each share they own. They will also receive 0.915 of a new BCE common share for each old share. Aliant shareholders will receive one trust unit for each common share they hold....

CEDAR FAIR, L.P. $26.39 (New York symbol FUN; SI Rating: Average) now operates seven amusement parks in the U.S. The company plans to add to that total with the purchase of five Paramount amusement parks from CBS Corp. for $1.24 billion. The new parks do not overlap with Cedar Fair’s seven current parks, and should increase its annual revenues by 75%. It also gives it more parks that stay open year-round, as well as a park near Toronto, its first outside the U.S....

JONES APPAREL GROUP INC. $34 (New York symbol JNY; Aggressive Growth Portfolio, Consumer sector; WSSF Rating: Average) earned $0.22 a share (total $25.8 million) in the three months ended April 1, 2006, down 69.0% from $0.71 a share ($87.0 million) a year earlier. The company’s sale of its Polo jeans business generated a $45.1 million loss in the latest quarter. Excluding all unusual items, it would have earned $0.66 a share in the latest quarter. Sales fell 9.6%, to $1.22 billion from $1.35 billion. The company is making good progress with its latest restructuring, and should reach its goal of cutting $100 million out of annual costs by the end of 2007. In the meantime, it’s still looking into various ways to enhance stockholder value. These include putting the entire company up for sale. Jones Apparel Group is a hold....

CEDAR FAIR L.P. $26 (New York symbol FUN; Income Portfolio, Consumer sector; WSSF Rating: Average) has agreed to buy five Paramount amusement parks from CBS Corp. for $1.24 billion. This is a huge purchase for Cedar Fair, which earned $1.59 a unit (total $88.4 million) in 2005. Cedar Fair has just $4.5 million ($0.08 per unit) in cash, so it will have to borrow the money it needs. That will greatly increase its long-term debt of $504.6 million, which is already a high 1.3 times equity. The new parks do not overlap with Cedar Fair’s seven current parks, and should increase its annual revenues by 75%. The deal also gives it more parks that stay open year-round, as well as a park near Toronto, Canada, its first outside the United States. Savings from the merger should also give it more cash for distributions, but it will probably wait until it fully integrates the new parks before raising its current annual rate of $1.88 (7.2% yield)....

THE PROCTER & GAMBLE CO. $55 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Above average) is the world’s leading maker of household and personal care products such as soap (Ivory), detergent (Tide), toothpaste (Crest), shampoo (Head & Shoulders) and snack foods (Pringles). Over 20 of its brands generate annual sales of at least $1 billion. In the past few years, Procter has used acquisitions to expand its market share and geographic reach. While that adds to its risk, the company has a good history of integrating new operations. Its biggest purchase so far was last October’s $51 billion all-stock acquisition of The Gillette Co., which makes razors, batteries (Duracell) and other consumer products....

ENCANA CORP. $47 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; WSSF Rating: Average) is a leading Canadian energy company. Natural gas accounts for about 75% of its production. In the past two years, EnCana has sold most of its overseas assets and conventional properties to focus on early-stage natural gas fields in North America. These properties are located mainly in remote mountainous areas, which makes them more expensive to develop....

Today many investors take it for granted that rapid industrialization in China and India has spurred the sharp increases in energy and metal prices of the past few years. They overlook the fact that hedge funds have poured investor money into the commodity markets these past few years — directly, and by investing in junior resource companies. As hedge funds and other traders try to sell their holdings, commodities could become even more volatile than usual. Prices could slump deeply over the next six months to a year. But rapid growth in China, India and elsewhere ensures that commodity prices will fluctuate in a much higher range in the next 10 years than in the last 10. That’s why we recommend that you hold some Resources issues in your portfolio. But it pays to stick with well-established companies, and limit your exposure to 25% or less of your overall portfolio. That way, you avoid the heavier risk of more aggressive stocks, but you still profit from growth in worldwide demand....

Some of our biggest gainers in the past few years have been in stocks from the Resources sector. Investors need to keep the risk and volatility of this sector in mind. TECK COMINCO LTD. $75 (Toronto symbol TEK.SV.B; Conservative Growth Portfolio, Resources sector; SI Rating: Average) is the world’s biggest supplier of zinc, a metal that prevents steel from rusting. The company also a major producer of copper, gold and indium, a metal used in flat-screen TV sets. Thanks to the huge run up in metal prices in the past few years and its growing cash flow, Teck is now looking for acquisitions that broaden its operations, such as its recent investments in Alberta’s oil sands and its 40% stake in the Elk Valley Coal Partnership, a major supplier of metallurgical coal to Asian steelmakers. Fording Canadian Coal Trust owns the other 60%....

BCE INC. $27 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; SI Rating: Above average) is reorganizing its businesses to unlock some of its value. The biggest part of this plan will combine Bell Canada’s traditional telephone operations in rural areas of Ontario and Quebec with those of 53.2%-owned ALIANT INC. $37 (Toronto symbol AIT; Conservative Growth Portfolio, Utilities sector; SI Rating: Above average) into a new income trust called Bell Aliant Regional Communications Income Fund. BCE will assume control over Aliant’s wireless and other operations. BCE shareholders will receive 0.0725 trust units for each common share they own. Consequently, BCE will own 45% of the new trust and run it, and BCE shareholders will hold 28.5%. Aliant shareholders will receive one trust unit for each common share they hold. As a group they will own 26.5% of the new trust....

CALGON CARBON CORP. $8 (New York symbol CCC) has sold its solvent recovery business for an undisclosed sum. The sale is part of Calgon’s plans to sell non-core assets and use the cash to pay down debt (0.6 times equity at the end of 2005). Calgon’s water-purification technology has strong growth potential, but the stock will probably move sideways until earnings improve. Hold. NCR CORP. $44 (New York symbol NCR) continues to sell more self-serve checkout systems to retailers, since it lowers their labor costs and cuts customer waiting times. Demand for NCR’s data warehousing services, which collect and analyze customer data, is also growing strongly. Buy for long-term gains. MOLSON COORS BREWING CO. $73 (New York symbol TAP) will likely earn $4.28 a share in 2006, up 8.4% from $3.95 in 2005 as it realizes more savings following the February 2005 merger of brewers Molson Inc. and Adolph Coors Co. The sale of a majority stake in its money-losing Brazilian brewer should also help earnings. Buy.