oil prices

ALIMENTATION COUCHE-TARD, $25.54, symbol ATD.B on Toronto, is the largest convenience store operator in Canada, with over 2,000 outlets. It also has over 3,500 U.S. stores. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. The fuel pumps at most stores provide 68% of the company’s sales. In the three months ended January 30, 2011, Couche-Tard’s earnings rose 29.6%, to $71.0 million, or $0.38 a share, from $54.8 million, or $0.29 a share, a year earlier (all figures except share prices in U.S. dollars). The latest earnings beat the consensus estimate of $0.37 a share. Revenue rose 13.7%, to $5.6 billion from $4.9 billion. Same-store merchandise sales climbed 3.9% in the U.S., and 0.4% in Canada. U.S. sales make up 77.9% of total sales....

ARCHER DANIELS MIDLAND CO. $36 (New York symbol ADM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 637.3 million; Market cap: $22.9 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.adm.com) processes corn, wheat, soybeans, canola, peanuts and other crops into a wide variety of food ingredients, such as flour, oils and sweeteners. The company mainly sells its products to firms that make and process food. It has over 240 processing plants in more than 60 countries. Archer Daniels is also the largest maker of ethanol from corn in the U.S. Ethanol is a gasoline additive that lowers harmful emissions. ...

PENGROWTH ENERGY CORP. $12 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 326.0 million; Market cap: $3.9 billion; Price-to-sales ratio: 2.4; Dividend yield: 7.0%; TSINetwork Rating: Average; www.pengrowth.com) produces oil and natural gas from properties in Alberta, B.C. and Saskatchewan. Natural gas accounted for 62% of Pengrowth’s production in 2010. Oil provided the remaining 38%. In 2010, Pengrowth’s cash flow rose 9.9%, to $606.0 million from $551.4 million in 2009. However, cash flow per share fell 3.8%, to $2.01 from $2.09, on more shares outstanding. The gain was mainly due to a 6.8% rise in the average price the company received per barrel of oil equivalent (including natural gas). That offset a 6.1% drop in its average daily production after it sold some properties in 2009. Low natural gas prices have held back the stock in the past few weeks, even as oil prices jumped in response to the turmoil in the Middle East....

These three companies all have large overseas operations. That exposes them to a wide variety of risks, including volatile currency-exchange rates and political unrest. However, all three are focusing on fast-growing markets. That enhances their long-term prospects. THOMSON REUTERS CORP. $38 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 833.7 million; Market cap: $31.7 billion; Price-to-sales ratio: 2.4; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has two main divisions: Markets (which supplied 58% of its 2010 revenue and 49% of its earnings) sells financial-information products to banks and other financial institutions. Professional (42%, 51%) sells specialized information to professionals in the legal, accounting, scientific and health-care fields. Thomson Reuters took its present form when the Ontario-based Thomson Corp. bought the U.K.-based Reuters news agency for $17 billion U.S. in cash and shares (all amounts except share price and market cap in U.S. dollars) in April 2008....

SHAWCOR LTD. $37 (Toronto symbol SCL:A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.6 million; Market cap: $2.6 billion; Price-to-sales ratio: 2.6; Dividend yield: 0.8%; TSINetwork Rating: Average; www.shawcor.com) saw its revenue fall 12.7% in 2010, to $1.0 billion from $1.2 billion in 2009. That’s partly because it competed a major pipeline-coating job in late 2009. Earnings per share fell 19.9%, to $1.49 from $1.86. The company’s backlog of customer orders that it expects to complete within a year fell 8.7% in 2010, to $374.6 million. However, higher oil prices are spurring new pipeline construction. The company has submitted bids on various contracts worth a total of $1.5 billion. ShawCor is a buy.

Cenovus Energy Inc., symbol CVE on Toronto, operates three oil-sands properties in Alberta, and one in Saskatchewan. Cenovus ships the heavy bitumen from these projects to refineries in Illinois and Texas. ConocoPhillips (New York symbol COP) owns 50% of these refineries, as well as 50% of Cenovus’ two main oil-sands projects. Cenovus also owns conventional oil and natural gas properties. Cenovus split off from EnCana Corp. in December 2009. In 2010, Cenovus earned $993.0 million, or $1.32 a share. That’s up 21.4% from $818.0 million, or $1.09 a share, in 2009. The oil stock’s production rose, as did oil prices. These were the main reasons for the higher earnings. These gains were somewhat offset by higher costs for shipping oil due to problems along the Enbridge pipeline system, and costs to upgrade its U.S. refineries. The oil stock’s cash flow fell 15.1% in 2010, to $2.4 billion, or $3.21 a share, from $2.8 billion, or $3.79 a share in 2009. Lower volumes and selling prices for natural gas were the main reasons for the declines....

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....

Buckeye Partners L.P., symbol BPL on New York, operates over 8,700 kilometres of pipelines in the northeastern and midwestern U.S. These lines pump gasoline, jet fuel and other petroleum products. Buckeye also owns oil and natural-gas storage terminals and other related businesses. Buckeye is one of the income investing picks we analyze in Wall Street Stock Forecaster. In 2010, Buckeye’s revenue jumped 78.0%, to $3.2 billion from $1.8 billion in 2009. The gain mostly reflects the company’s recent acquisition of oil pipelines and storage terminals. In addition, the company is transporting more fuel due to the improving economy. Rising oil prices have also pushed up the company’s fee income....

DELPHI ENERGY $2.05 (Toronto symbol DEE; TSI Network Rating: Speculative) (403-265-6171; www.delphienergy.ca; Shares outstanding: 112.7 million; Market cap: $231.1 million; No dividends paid) explores for oil and natural gas in Alberta, Saskatchewan and B.C. Gas makes up 81% of Delphi’s daily output; the remaining 19% is oil. In the three months ended September 30, 2010, Delphi’s average daily output rose 19.8%, to a record 8,114 barrels of oil equivalent (this measurement includes natural gas) from 6,773 barrels. The higher production pushed up Delphi’s cash flow by 19.7%, to $15.1 million from $12.6 million. Cash flow per share fell 18.8%, $0.13 from $0.16 a year earlier, on more shares outstanding....

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 investing strategy, and shows you how you can put it into practice right away. Tip of the week: “Focus your investing strategy on quality and diversification—not economic forecasts.” Economic forecasts attract way more investor attention than they deserve, in view of the meagre advantage, if any, that they add to your investing strategy. In fact, most experienced, successful investors feel skeptical, if not downright cynical, about economic forecasts, for three reasons....