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AEROPOSTALE INC., $28.95, symbol ARO on New York, fell 10% this week, even though it reported higher sales and profits in the latest quarter. In the three months ended October 31, 2009, Aeropostale’s revenue rose 17.8%, to $567.8 million from $482.0 million a year earlier. Earnings jumped 46.9%, to a record $62.6 million, or $0.94 a share, from $42.6 million, or $0.64 a share. The company’s wide variety of clothing, low prices and aggressive promotions were the main reasons for its strong results. In the month of November, sales rose 13.5%, to $228 million from $200.9 million a year ago. But even though same-store sales jumped 7%, they missed consensus expectations of 7.7%. The company expects to earn $1.20 to $1.24 a share in the current quarter. But the low end of that estimate is below the $1.22 a share that analysts are expecting....

GABRIEL RESOURCES $3.51 (Toronto symbol GBU; SI Rating: Speculative) (416-955-9200; www.gabrielresources.com; Shares outstanding: 307.3 million; Market cap: $1.1 billion) shot up over 30% recently after it added a new investor with experience in permitting and building large industrial projects in Romania. That’s where Gabriel’s 80.23%-owned Rosia Montana project is located. BSG Capital Markets is investing $67.5 million in Gabriel for a 9% stake. BSG has an option to raise that to 16%. Gabriel will use the proceeds of the BSG financing to develop Rosia Montana once the stalled permitting process resumes. Meanwhile, BSG will use its experience in Romania to push the process forward....

A high short position is no longer a particularly telling indicator, since traders and hedge funds often combine a short sale with some other transaction in stock options. Rather than having to buy the stock back in the market, for instance, short sellers may hold call options that they can exercise; that way, they buy the stock from the option seller. The short sale may say more about options trading than it does about the company’s fundamentals. Stocks like Great-West Lifeco, $23.75, symbol GWO on Toronto (Shares outstanding: 944.7 million; Market cap: $22.4 billion), and Imperial Oil, $40.84, symbol IMO on Toronto (Shares outstanding: 847.6 million; Market cap: $34.6 billion), are bound to have high short positions; they are highly liquid stocks, and there are plenty of shares available to borrow from the many institutions that own them....

If you feel stocks have become overpriced lately, you might want to take advantage of this by short selling stocks — that is, selling borrowed shares in hopes of a drop in price. We advise against this strategy, mainly because of the perennial drawbacks of short selling. Short selling is when you borrow stock from a broker and then sell it. However, you eventually have to buy back the stock on the market to return it to its owner. If the stock falls in price while you are “short,” you can buy it back at a lower price. You have then made a profit. But if the stock rises in price, you must buy it back at a higher price than you sold it, and you lose money. [ofie_ad]...

COMPTON PETROLEUM $1.24 (Toronto symbol CMT; SI Rating: Speculative) (403-237-9400; www.comptonpetroleum.com; Shares outstanding: 263.6 million; Market cap: $326.8 million) explores for oil and natural gas in western Canada. About 83% of its production is natural gas. In the three months ended June 30, 2009, Compton’s cash flow per share fell sharply, to $0.08 from $0.59 a year earlier. Revenue fell 71.0%, to $54.1 million from $186.8 million. Lower oil and gas prices contributed to the declines. As well, the company saw a 29.8% drop in production because it sold land to pay down debt. Compton’s debt of $853.9 million is a high 2.6 times its $326.8-million market cap. The company is further lowering its debt by selling overriding royalties on its production. Overriding royalties give the buyer ownership of a percentage of production revenue, before any costs....

Focusing on natural gas production is riskier than diversifying between gas and oil, because gas can stay depressed for much longer. However, gas has begun rising lately. If that trend continues, it could pay off hugely for gas-focused stocks like these two. DELPHI ENERGY $1.68 (Toronto symbol DEE; SI Rating: Speculative) (403-265-6171; www.delphienergy.ca; Shares outstanding: 92.3 million; Market cap: $155.1 million) explores for oil and gas in Alberta and B.C. Natural gas makes up 87% of its overall daily output. In the three months ended June 30, 2009, Delphi’s average daily output rose 9.8%, to 6,809 barrels of oil equivalent (this measurement includes natural gas) from 6,202 barrels....

TIM HORTONS INC. $30 has finished shifting its incorporation to Canada from the U.S. This will let the coffee-and-donut store operator take advantage of Canada’s lower corporate tax rates. Corporate tax rates in the U.S. are over 30%, while Canada’s combined federal and provincial rate will be around 25% in two years. Shareholders will continue to own the same number of shares and have the same interest in the company that they have now. As well, Tim Hortons’ shares will continue to trade on both Toronto and New York under the “THI” symbol. Best Buy. THE WESTAIM CORP. $0.35 continues to seek new business opportunities. Its main asset is its 74.7% stake in Nucryst Pharmaceuticals Corp. (Toronto symbol NCS), which has developed a silver-based substance that prevents infections in burns and other wounds. Westaim is still debt free, and holds cash of $40.2 million, or $0.43 a share. The company also has roughly $3.7 million of illiquid notes that it received last January as part of the restructuring of the asset-backed commercial paper market. Hold. TRANSCONTINENTAL INC. $12 has sold $100 million of preferred shares. Underwriters have an option to buy an additional $15 million worth. The cash will help the company pay down its $768.7-million long-term debt, which is a high 81% of its market cap. Buy.

ATLANTIC TELE-NETWORK, $50.19, symbol ATNI on Nasdaq, has raised its quarterly dividend by 11.1%, to $0.20 a share from $0.18. The shares now yield 1.6%. This was the company’s eleventh consecutive annual dividend increase. In June, Atlantic agreed to buy more than 800,000 wireless accounts from Verizon Wireless for $200 million in cash. The subscribers are mostly in rural areas of Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho. The deal should close by the end of this year. These new accounts will bring Atlantic’s total number of wireless subscribers above one million, up from 200,000 today, and make it one of the largest wireless carriers in the U.S....

SUNCOR ENERGY INC., $38.59, Toronto symbol SU, announced this week that it is planning to sell some of its natural-gas operations. Most of these properties belonged to Petro-Canada, which Suncor bought on August 1. Natural-gas prices fell to around $2.50 U.S. per thousand cubic feet in early September, but have since rebounded to $3.78 U.S. That’s still well below their peak of $12 U.S., which they hit in July 2008. Suncor hopes to sell all of its natural-gas properties by the end of 2010, but will wait to see if gas prices keep rising before it finalizes any deals. The company is planning to invest the proceeds in its oil-sands operations, which will make up 70% of its business after it sells the natural-gas assets. Suncor’s other oil properties, as well as its refineries and gas stations, will account for the remaining 30%....

Some commercial vehicles are powered by natural gas. However, there are a number of limitations to large-scale use of this fuel in other types of vehicles, such as passenger cars and trucks. First, gas stations have limited storage and delivery infrastructure for wide-scale use of natural gas. As well, natural gas must be stored in cylinders, whether it is compressed natural gas (CNG) or liquefied natural gas (LNG). These are usually located in the vehicle’s trunk, which reduces available cargo space. As well, consumers will likely be reluctant to convert to natural gas, as many believe that natural-gas systems in cars are unsafe. And, while there is a chance of higher subsidies to fund the conversion of passenger cars to natural gas, governments and car makers appear to prefer electric cars as a non-gasoline-powered option. Meanwhile, here’s a look at a company sells natural gas for use in vehicles:...