oil and gas
VANGUARD EMERGING MARKETS ETF $39.22 (New York symbol VWO; buy or sell through brokers) aims to track the MSCI Emerging Markets Index, which is made up of common stocks of companies located in emerging markets around the world. The fund has an MER of 0.22%.
The fund’s top holdings are Samsung Electronics (South Korea: electronics), Petroleo Brasileiro SA (Brazil: oil and gas), Vale SA (Brazil: mining), Gazprom (Russia: gas utility), China Mobile (China: wireless), Taiwan Semiconductor (Taiwan: computer chips), America Movil SAB de CV (Latin America: wireless), China Construction Bank (China: banking), Itau Unibanco Holding SA (Brazil: banking), and Industrial & Commercial Bank of China (China: banking), CNOOC Ltd. (China: oil and gas) and MTN Group (South Africa: telecommunications).
The $56.3-billion Vanguard Emerging Markets ETF’s breakdown by country is as follows: China (17.1%), Brazil (15.4%), South Korea (14.9%), Taiwan (10.9%), South Africa (7.5%), India (7.4%), Russia (6.6%), Mexico (4.7%), Malaysia (3.4%), Indonesia (2.9%), Thailand (1.8%), Chile (1.7%), Poland (1.5%), Turkey (1.3%) and Other (0.9%).
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The fund’s top holdings are Samsung Electronics (South Korea: electronics), Petroleo Brasileiro SA (Brazil: oil and gas), Vale SA (Brazil: mining), Gazprom (Russia: gas utility), China Mobile (China: wireless), Taiwan Semiconductor (Taiwan: computer chips), America Movil SAB de CV (Latin America: wireless), China Construction Bank (China: banking), Itau Unibanco Holding SA (Brazil: banking), and Industrial & Commercial Bank of China (China: banking), CNOOC Ltd. (China: oil and gas) and MTN Group (South Africa: telecommunications).
The $56.3-billion Vanguard Emerging Markets ETF’s breakdown by country is as follows: China (17.1%), Brazil (15.4%), South Korea (14.9%), Taiwan (10.9%), South Africa (7.5%), India (7.4%), Russia (6.6%), Mexico (4.7%), Malaysia (3.4%), Indonesia (2.9%), Thailand (1.8%), Chile (1.7%), Poland (1.5%), Turkey (1.3%) and Other (0.9%).
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ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $24.23 (New York Exchange symbol ESR; buy or sell through brokers), is an ETF that aims to track the MSCI Emerging Markets Eastern Europe Index. The fund’s geographic breakdown is as follows: Russia, 74.0%; Poland, 17.4%; Czech Republic, 4.3%; and Hungary, 3.5%.
The fund’s top holdings are Gazprom (Russia: gas utility), 21.0%; Lukoil (Russia: oil), 10.0%; Sberbank (Russia: bank), 7.9%; Novatek (Russia: natural gas), 4.2%; Rosneft Oil Company (Russia: oil and gas), 3.9%; Uralkali (Russia: potash), 3.7%; Mobile Tele-Systems (Russia: wireless), 2.8%; MMC Norilsk Nickel (Russia: mining), 2.7%; Tafneft (Russia: oil and gas); and CEZ AS (Czech Republic: utility), 2.2%. iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
The fund’s concentration in Russia adds risk, especially given its current political tensions. But the long-term outlook for resource prices, including oil and gas, is positive. That’s a big plus for Russia’s largely resource-based economy, which is forecast to grow by 3.5% in 2012.
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The fund’s top holdings are Gazprom (Russia: gas utility), 21.0%; Lukoil (Russia: oil), 10.0%; Sberbank (Russia: bank), 7.9%; Novatek (Russia: natural gas), 4.2%; Rosneft Oil Company (Russia: oil and gas), 3.9%; Uralkali (Russia: potash), 3.7%; Mobile Tele-Systems (Russia: wireless), 2.8%; MMC Norilsk Nickel (Russia: mining), 2.7%; Tafneft (Russia: oil and gas); and CEZ AS (Czech Republic: utility), 2.2%. iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
The fund’s concentration in Russia adds risk, especially given its current political tensions. But the long-term outlook for resource prices, including oil and gas, is positive. That’s a big plus for Russia’s largely resource-based economy, which is forecast to grow by 3.5% in 2012.
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ARC RESOURCES $25.52 (Toronto symbol ARX; Shares outstanding: 287.6 million; Market cap: $7.3 billion; TSINetwork Rating: Speculative; Dividend yield: 4.7%; www.arcresources.com) produces oil and gas in western Canada. Its average daily production of 85,178 barrels of oil equivalent is weighted 67% to gas and 33% to oil.
In the three months ended September 30, 2011, ARC’s cash flow per share rose 17.5%, to $0.74 from $0.63. That’s because the company raised its production. It also benefited from higher oil prices.
ARC converted from a trust to a corporation on January 1, 2011, in response to Ottawa’s income-trust tax. However, ARC has $2.2 billion of tax pools that are letting it offset the tax and maintain its $0.10 monthly payout (it now yields 4.7%).
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In the three months ended September 30, 2011, ARC’s cash flow per share rose 17.5%, to $0.74 from $0.63. That’s because the company raised its production. It also benefited from higher oil prices.
ARC converted from a trust to a corporation on January 1, 2011, in response to Ottawa’s income-trust tax. However, ARC has $2.2 billion of tax pools that are letting it offset the tax and maintain its $0.10 monthly payout (it now yields 4.7%).
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INTERNATIONAL BUSINESS MACHINES CORP., $190.46, New York symbol IBM, is our “Stock of the Year” for 2012. The company continues to benefit from its decision in the 1990s to focus on selling its expertise instead of computer hardware. IBM now gets most of its revenue from steady and predictable long-term contracts. That cuts its risk. The company is now using its strong profits to expand into promising new areas, such as online data storage and software that helps businesses analyze customer spending patterns. As well, IBM’s strong reputation is helping in expand in Asia and Latin America. That cuts its reliance on slower-growing regions like North America and Europe....
CANADIAN PACIFIC RAILWAY LTD. $69 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 169.7 million; Market cap: $11.7 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.cpr.ca) transports freight between Montreal and Vancouver, and connects with hubs in the U.S. Midwest and Northeast. It gets 25% of its revenue from the U.S.
CP’s revenue rose 16.7%, from $4.6 billion in 2006 to $5.3 billion in 2008, as rising Asian trade pushed up freight volumes. CP’s $1.5-billion purchase of Dakota, Minnesota & Eastern Railroad (DM&E) October 2008 brought in more revenue. DM&E operates a 4,000-kilometre rail network in eight midwestern states.
The recession cut CP’s revenue by 17.7% in 2009 to $4.4 billion. However, revenue rose 13.2%, to $5.0 billion, in 2010. Even with its weather-related problems in the first half of 2011, revenue for the full year probably rose to $5.2 billion.
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CP’s revenue rose 16.7%, from $4.6 billion in 2006 to $5.3 billion in 2008, as rising Asian trade pushed up freight volumes. CP’s $1.5-billion purchase of Dakota, Minnesota & Eastern Railroad (DM&E) October 2008 brought in more revenue. DM&E operates a 4,000-kilometre rail network in eight midwestern states.
The recession cut CP’s revenue by 17.7% in 2009 to $4.4 billion. However, revenue rose 13.2%, to $5.0 billion, in 2010. Even with its weather-related problems in the first half of 2011, revenue for the full year probably rose to $5.2 billion.
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SHERRITT INTERNATIONAL $6.36 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 296.4 million; Market cap: $1.9 billion; Dividend yield: 2.4%) is a diversified natural-resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 376 megawatts of power-generation capacity in Cuba. Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to finishing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan. It is also Canada’s largest thermal coal producer. In the three months ended September 30, 2011, Sherritt’s earnings jumped 102.2%, to $45.5 million, or $0.15 a share. A year earlier, it earned $22.5 million, or $0.07 a share. Revenue rose 13.0%, to $466.4 million from $412.7 million. Higher coal and oil prices were the main reasons for the improved results....
Caterpillar Inc., $103.89, symbol CAT on New York (Shares outstanding: 666.0 million; Market cap: $69.2 billion; www.cat.com), is the world’s largest maker of earth-moving equipment, including tractors, scrapers, graders, compactors, loaders and pipe layers. Caterpillar also makes lift trucks and diesel and turbine engines. The company gets 70% of its sales from outside the U.S. Its clients are mainly in the mining, logging, farming, construction and oil and gas industries. The company sells its machines through a worldwide dealer network. Caterpillar also provides dealers and customers with equipment financing and insurance....
We’ve chosen Canadian Pacific Railway as our “Stock of the Year” for 2012. Railways are highly cyclical. CP’s stock got as low as $30 in mid-2004, then shot up to briefly peak at $90 in mid-2007. It then fell to a low of $33 by March 2009, as the recession cut deeply into freight volumes. The stock more than doubled to $68 by February 2011 as the economy recovered. However, avalanches in B.C. and spring floods in the Prairies hurt CP’s volumes and earnings in 2011. The stock fell as low as $46 in September. It then began to rise in October, as the economic outlook and the stock market both improved. The company now has a new plan for dealing with bad weather and raising its efficiency. The recent involvement of a prominent American hedge fund may speed up CP’s earnings growth, and spur further gains in its stock price....
Anderson Energy Ltd., $0.57, symbol AXL on Toronto (Shares outstanding: 172.6 million; Market cap: $98.4 million; www.andersonenergy.ca), produces and explores for oil and natural gas in central Alberta. The company’s production is now 68% gas and 32% oil; it aims to raise the proportion of oil to 50% in 2012. In the third quarter of 2011, Anderson’s cash flow was $0.07 a share, up 40% from $0.05 a share a year earlier. Higher oil and gas prices were the main reasons for the increase. The company’s production averaged 7,351 barrels per day (including natural gas) in the latest quarter, up slightly from 7,292 barrels a year earlier....
SHERRITT INTERNATIONAL $6.36 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 296.4 million; Market cap: $1.9 billion; Dividend yield: 2.4%) is a diversified natural-resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 376 megawatts of power-generation capacity in Cuba.
Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to finishing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan. It is also Canada’s largest thermal coal producer.
In the three months ended September 30, 2011, Sherritt’s earnings jumped 102.2%, to $45.5 million, or $0.15 a share. A year earlier, it earned $22.5 million, or $0.07 a share. Revenue rose 13.0%, to $466.4 million from $412.7 million. Higher coal and oil prices were the main reasons for the improved results.
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Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to finishing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan. It is also Canada’s largest thermal coal producer.
In the three months ended September 30, 2011, Sherritt’s earnings jumped 102.2%, to $45.5 million, or $0.15 a share. A year earlier, it earned $22.5 million, or $0.07 a share. Revenue rose 13.0%, to $466.4 million from $412.7 million. Higher coal and oil prices were the main reasons for the improved results.
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