oil and gas

Canadian investors must pay a 35% U.S. withholding tax on income from master limited partnerships (MLPs) like Buckeye and Cedar Fair. However, you can usually claim a non-refundable Canadian tax credit to offset that withholding tax. As well, MLPs are not suitable for RRSPs or RRIFs.

These concerns aside, we like the outlook for both MLPs, but see them as holds after their recent gains.

BUCKEYE PARTNERS L.P....

Recent events in Ukraine leave me with a pleasing sense of déjà vu. This goes back to the early 1960s. I had a number of friends back then who had left Hungary as refugees after the failed revolution of 1956. I had read about conditions in the communist world, of course. But hearing about it from friends who had lived through it made it much more tangible. With those memories in mind, the Eastern European revolutions of 1989 seemed like a wonderful thing. When the Eastern European revolutions broke out, I often stayed up until the early hours of the morning, watching live CNN coverage of events then going on in the former Soviet bloc—the destruction of the Berlin Wall, the non-violent crowds standing up to the dictators, and the on-the-scene discussions of political changes that were likely to follow. I felt a strong personal connection to the changes. But I also had a professional interest. The collapse of communism was likely to be great for the world, and in particular for the stock market. The spread of political and economic liberty, and of the free enterprise system, was bound to lead to greater wealth for all....

E-L Financial Corp. Ltd., $701.13, symbol ELF on Toronto (Shares outstanding; 4.0 million; Market cap: $2.9 billion; www.empire.ca), is a holding company that owns 80% of the Empire Life Insurance Company. In addition to life insurance, Empire provides employee benefit plans and financial services. E-L also owns an investment portfolio that includes both direct investments in companies and publicly traded stocks and bonds. As well, it has a 51.38% interest in United Corporations, a closed-end investment fund (symbol UNC on Toronto). The company sold its 100% interest in the Dominion of Canada General Insurance Company, which underwrites property and casualty insurance, on November 1, 2013. That brought in cash of $1.1 billion and let E-L pay a $75 dollar-a-share special dividend....

We haven’t been able to find any water utilities we would recommend for investment. The water business in developed countries is subject to a lot of regulatory hurdles and has limited growth prospects. There may be opportunities in developing nations, many of which desperately need clean water. But investing in these markets can expose you to political risk. We think you should stick with the utility stocks we recommend in our newsletters....

VANGUARD FTSE EMERGING MARKETS ETF $37.39 (New York symbol VWO; buy or sell through brokers) aims to track the Financial Times Stock Exchange (FTSE) Transitions Index, which is made up of common stocks of companies in developing countries. The fund has an MER of just 0.18%.

Vanguard FTSE Emerging Markets ETF’s top holdings include Taiwan Semiconductor (Taiwan: computer chips), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Vale SA (Brazil: mining), Gazprom (Russia: gas utility), China Construction Bank, Tencent Holdings (China: Internet), Industrial & Commercial Bank of China, Naspers Ltd. (South Africa: media) and MTN Group (South Africa: wireless telecommunications)

The $62.4-billion fund’s breakdown by country is as follows: China (22.1%), Taiwan (13.6%), Brazil (13.2%), South Africa (9.5%), India (9.3%), Russia (7.1%), Mexico (5.8%), Malaysia (4.9%), Indonesia (2.5%), Thailand (2.5%), Chile (1.9%), Poland (1.7%), Turkey (1.7%) and others (4.2%).
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VANGUARD GROWTH ETF $88.97 (New York symbol VUG; buy or sell through brokers) aims to track the Center for Research in Security Prices (CRSP) U.S. Large Cap Growth Index, a broadly diversified index that mainly consists of stocks of large U.S. companies. The fund’s MER is just 0.10%.

The $37.5-billion Vanguard Growth ETF’s top holdings are Apple, IBM, Google, Coca-Cola, Philip Morris International, Oracle, Amazon.com, Comcast, Qualcomm and Walt Disney Co.

The fund’s breakdown by industry is as follows: Technology (25.6%), Consumer Services (20.3%), Industrials (12.1%), Financials (11.9%), Consumer Goods (10.6%), Health Care (10.0%), Oil and Gas (7.1%), Materials (1.6%), Telecommunication Services (0.4%) and Utilities (0.4%).
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SNC-LAVALIN GROUP INC. (Toronto symbol SNC; www.snclavalin.com) is a leading Canadian engineering and construction company that specializes in large-scale public works projects, such as roads, bridges, transit systems and water treatment plants. SNC has offices in over 40 countries....

MCCOY CORP., $5.64, symbol MCB on Toronto, dropped 21% after announcing that it expects to report significantly lower earnings in the three months ended December 31, 2013. The company will release its final results on March 14, 2014. McCoy operates through two divisions: Mobile Solutions and Energy Products and Services. Energy Products and Services sells hydraulic equipment for drilling rigs. This gear includes power tongs, which are large, wrench-like tools that tighten and loosen the pipe in the drill hole. Mobile Solutions builds heavy-duty trailers for U.S. and Canadian clients in the oil and gas, wind energy, infrastructure and construction industries....

TRILOGY ENERGY CORP. $26.56 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290- 2900; www.trilogyenergy.com; Shares outstanding: 99.4 million; Market cap: $3.3 billion; Dividend yield: 1.6%) owns oil and gas properties in central Alberta’s Kaybob and Grande Prairie areas....

COMPUTER MODELLING GROUP $29.37 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 39.0 million; Market cap: $1.2 billion; Dividend yield: 2.6%) sells software and consulting services that help oil and gas producers use advanced recovery techniques to get more out of their wells....