price to sales ratio
METRO INC. $34 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 246.9 million; Market cap: $8.4 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.4%; TSINetwork Rating: Average; www.metro.ca) plans to spend $300 million to build new supermarkets and upgrade existing stores in its 2015 fiscal year, which ends September 30, 2015. That’s up 47.8% from $203 million in fiscal 2014.
These investments should help Metro reach its long-term goal of increasing its annual sales by 2% to 4% and earnings per share by 8% to 10%.
Metro is a buy.
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These investments should help Metro reach its long-term goal of increasing its annual sales by 2% to 4% and earnings per share by 8% to 10%.
Metro is a buy.
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CENOVUS ENERGY INC. $21 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 828.4 million; Market cap: $17.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 5.0%; TSINetwork Rating: Average; www.cenovus.com) has temporarily shut down its Foster Creek oil sands project in northern Alberta, as forest fires in the area are hindering traffic on the main access road to the site.
Cenovus own 50% of Foster Creek, while U.S.-based ConocoPhillips (New York symbol COP) owns the other 50%. In the first quarter of 2015, Cenovus’s share of this project’s output was 68,000 barrels a day, or 31% of its total daily oil production of 218,000 barrels.
The fires have also forced other oil projects in Alberta to close. In all, these operations account for 9% of the province’s total production. However, the shutdowns have increased the spot price of Western Canadian crude, which should help Cenovus offset the lost revenue.
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Cenovus own 50% of Foster Creek, while U.S.-based ConocoPhillips (New York symbol COP) owns the other 50%. In the first quarter of 2015, Cenovus’s share of this project’s output was 68,000 barrels a day, or 31% of its total daily oil production of 218,000 barrels.
The fires have also forced other oil projects in Alberta to close. In all, these operations account for 9% of the province’s total production. However, the shutdowns have increased the spot price of Western Canadian crude, which should help Cenovus offset the lost revenue.
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CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 267.2 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.9%; TSINetwork Rating: Average; www.cae.com) has won a new contract to train pilots for the U.S. Army and Air Force. As a result, the company will build a new training facility at Dothan Regional Airport in Alabama.
This eight-year deal is worth $200 million U.S. To put that in context, CAE’s revenue was $2.2 billion (Canadian) in the fiscal year ended March 31, 2015. Military clients supply about 40% of the company’s revenue, which cuts its reliance on selling flight simulators to cyclical commercial airlines.
CAE is our #1 buy for 2015.
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This eight-year deal is worth $200 million U.S. To put that in context, CAE’s revenue was $2.2 billion (Canadian) in the fiscal year ended March 31, 2015. Military clients supply about 40% of the company’s revenue, which cuts its reliance on selling flight simulators to cyclical commercial airlines.
CAE is our #1 buy for 2015.
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IGM FINANCIAL INC. $42 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 248.5 million; Market cap: $10.4 billion; Price-to-sales ratio: 3.5; Dividend yield: 5.4%; TSINetwork Rating: Above Average; www.igmfinancial.com) is Canada’s largest independent mutual fund company, with $148.5 billion of assets under management. Power Financial owns 59.1% of IGM.
In the first quarter of 2015, IGM’s earnings rose 3.0%, to $200.3 million from $194.4 million a year earlier. Per-share earnings gained 3.9%, to $0.80 from $0.77, on fewer shares outstanding. Revenue increased 6.4%, to $760.9 million from $714.8 million. Sales of mutual funds (net of redemptions) fell 12.0%, but rising stock markets pushed up assets under management by 8.1%.
The Canadian Medical Association recently dropped Mackenzie and other firms as sub-advisors on some of the bond funds it sells to its members. That will cut IGM’s assets under management by $10 billion. However, based on the fees it earns from this client, the impact on its earnings is small. The stock trades at just 12.5 times the $3.36 a share that IGM will likely earn in 2015. The $2.25 dividend yields 5.4%.
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In the first quarter of 2015, IGM’s earnings rose 3.0%, to $200.3 million from $194.4 million a year earlier. Per-share earnings gained 3.9%, to $0.80 from $0.77, on fewer shares outstanding. Revenue increased 6.4%, to $760.9 million from $714.8 million. Sales of mutual funds (net of redemptions) fell 12.0%, but rising stock markets pushed up assets under management by 8.1%.
The Canadian Medical Association recently dropped Mackenzie and other firms as sub-advisors on some of the bond funds it sells to its members. That will cut IGM’s assets under management by $10 billion. However, based on the fees it earns from this client, the impact on its earnings is small. The stock trades at just 12.5 times the $3.36 a share that IGM will likely earn in 2015. The $2.25 dividend yields 5.4%.
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BANK OF NOVA SCOTIA $66 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $79.2 billion; Price-to-sales ratio: 3.6; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.scotiabank.com) has now purchased 51% of the credit card operations of Cencosud S.A., Chile’s largest retailer, for $280 million U.S. The deal made the bank Chile’s third-largest credit card issuer.
Meanwhile, Bank of Nova Scotia earned $1.73 billion, or $1.42 a share, in its fiscal 2015 second quarter, which ended April 30, 2015. That’s up 1.6% from $1.70 billion, or $1.39, a year earlier. Revenue rose 3.7%, to $5.9 billion from $5.7 billion.
Earnings at the Canadian banking division (48% of the bank’s total) rose 0.7%, mainly because it sold most of its shares in mutual fund provider CI Financial (Toronto symbol CIX) in 2014. If you exclude CI and adjust for a change in tax rates, this division’s earnings rose 9% on improving loan and deposit growth.
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Meanwhile, Bank of Nova Scotia earned $1.73 billion, or $1.42 a share, in its fiscal 2015 second quarter, which ended April 30, 2015. That’s up 1.6% from $1.70 billion, or $1.39, a year earlier. Revenue rose 3.7%, to $5.9 billion from $5.7 billion.
Earnings at the Canadian banking division (48% of the bank’s total) rose 0.7%, mainly because it sold most of its shares in mutual fund provider CI Financial (Toronto symbol CIX) in 2014. If you exclude CI and adjust for a change in tax rates, this division’s earnings rose 9% on improving loan and deposit growth.
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POTASH CORP. OF SASKATCHEWAN $38 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 834.2 million; Market cap: $31.7 billion; Price-to-sales ratio: 4.8; Dividend yield: 4.9%; TSINetwork Rating: Average; www.potashcorp.com) is thinking about selling its minority stakes in foreign fertilizer producers Israel Chemicals and SQM (Chile). However, it plans to keep its interests in Sinofert (China) and Arab Chemicals (Jordan).
As of March 31, 2015, these four holdings had a book value of $2.8 billion U.S. A sale would free up cash for dividends or share buybacks. However, last year’s record crop harvests continue to depress potash prices.
Potash Corp. is a hold.
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As of March 31, 2015, these four holdings had a book value of $2.8 billion U.S. A sale would free up cash for dividends or share buybacks. However, last year’s record crop harvests continue to depress potash prices.
Potash Corp. is a hold.
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SHAWCOR LTD. $39 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and natural gas pipelines from rusting. This business supplies 90% of its revenue. The remaining 10% comes for making industrial products, like electrical wire and protective sheaths.
Last year, the company won contracts to coat underwater pipelines for the South Stream Pipeline project, which pumps natural gas from Russia under the Caspian Sea to Turkey. From there, other pipelines pump the gas to Italy and into Europe. The pipeline’s operators suspended construction in late 2014, but they have recently restarted the project. ShawCor now expects to complete these jobs in the second half of 2015. The company has resumed work on one contract worth $65 million. A second job, worth $60 million, is still suspended. Meanwhile, ShawCor’s revenue fell 1.5% in the three months ended March 31, 2015, to $471.9 million from $479.1 million a year earlier. That’s mainly because the company coated fewer pipelines. However, favourable exchange rates added $16.2 million to its revenue in the latest quarter.
Earnings fell 39.0%, to $37.8 million, or $0.58 a share, from $61.9 million, or $1.03. Aside from the lower revenue, ShawCor completed a highly profitable contract in the year-earlier quarter. These were the main reasons for the lower earnings.
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Last year, the company won contracts to coat underwater pipelines for the South Stream Pipeline project, which pumps natural gas from Russia under the Caspian Sea to Turkey. From there, other pipelines pump the gas to Italy and into Europe. The pipeline’s operators suspended construction in late 2014, but they have recently restarted the project. ShawCor now expects to complete these jobs in the second half of 2015. The company has resumed work on one contract worth $65 million. A second job, worth $60 million, is still suspended. Meanwhile, ShawCor’s revenue fell 1.5% in the three months ended March 31, 2015, to $471.9 million from $479.1 million a year earlier. That’s mainly because the company coated fewer pipelines. However, favourable exchange rates added $16.2 million to its revenue in the latest quarter.
Earnings fell 39.0%, to $37.8 million, or $0.58 a share, from $61.9 million, or $1.03. Aside from the lower revenue, ShawCor completed a highly profitable contract in the year-earlier quarter. These were the main reasons for the lower earnings.
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FINNING INTERNATIONAL INC. $25 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 172.4 million; Market cap: $4.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.finning.com) is the world’s largest dealer of tractors, bulldozers and trucks made by Caterpillar Inc. (New York symbol CAT).
It also sells heavy equipment from other manufacturers. Finning’s clients are mainly in the mining, forest products and construction industries. The company recently paid $230 million for Saskatchewan Caterpillar distributor Kramer Ltd. The deal that will add $275 million to Finning’s annual revenue.
To put these figures in context, Finning’s revenue fell 9.4% in the three months ended March 31, 2015, to $1.5 billion from $1.7 billion a year earlier. That’s mainly because weak prices for copper and other metals hurt mining equipment demand in Canada and South America. Part of Finning’s response to the lower sales has been to exit Uruguay, which accounts for $30 million U.S. of yearly revenue.
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It also sells heavy equipment from other manufacturers. Finning’s clients are mainly in the mining, forest products and construction industries. The company recently paid $230 million for Saskatchewan Caterpillar distributor Kramer Ltd. The deal that will add $275 million to Finning’s annual revenue.
To put these figures in context, Finning’s revenue fell 9.4% in the three months ended March 31, 2015, to $1.5 billion from $1.7 billion a year earlier. That’s mainly because weak prices for copper and other metals hurt mining equipment demand in Canada and South America. Part of Finning’s response to the lower sales has been to exit Uruguay, which accounts for $30 million U.S. of yearly revenue.
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SNC-LAVALIN GROUP INC. $46 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.1 million; Market cap: $7.0 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Average; www.snclavalin.com) fell to $36.24 in March 2015 after the RCMP charged the company and two subsidiaries for using bribes to win construction deals in Libya between 2001 and 2011.
These are the same allegations that prompted SNC to replace its senior executives in 2012 and bring in a new program to enforce ethical practices. The company plans to fight these charges.
Meantime, SNC has continued to win public works contracts, including one for building a new bridge in Montreal and another for a transit line in Toronto. That’s why the stock has recovered to its current level.
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These are the same allegations that prompted SNC to replace its senior executives in 2012 and bring in a new program to enforce ethical practices. The company plans to fight these charges.
Meantime, SNC has continued to win public works contracts, including one for building a new bridge in Montreal and another for a transit line in Toronto. That’s why the stock has recovered to its current level.
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ANDREW PELLER LTD. $17 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.3 million; Market cap: $243.1 million; Price-to-sales ratio: 0.8; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.andrewpeller.com) is a great example of a key part of our three-pronged investing strategy, which is to downplay stocks in the broker/media limelight (the other two are to invest mainly in well-established companies, and spread your money across the five main economic sectors).
Peller is Canada’s second-largest wine producer, after Vincor International, but few brokers cover it due to its relatively small market cap. Even so, it has a long history of rising earnings and dividends.
In its 2015 fiscal year, which ended March 31, 2015, Peller’s sales rose 6.0%, to $315.7 million from $297.8 million in 2014. That’s mainly because it launched several new products, including its skinnygrape spritzers and Panama Jack cocktails.
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Peller is Canada’s second-largest wine producer, after Vincor International, but few brokers cover it due to its relatively small market cap. Even so, it has a long history of rising earnings and dividends.
In its 2015 fiscal year, which ended March 31, 2015, Peller’s sales rose 6.0%, to $315.7 million from $297.8 million in 2014. That’s mainly because it launched several new products, including its skinnygrape spritzers and Panama Jack cocktails.
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