price to sales ratio

ANDREW PELLER LTD. $15 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.3 million; Market cap: $214.5 million; Price-to-sales ratio: 0.7; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest producer of wines, after Vincor International. The company has wineries in Nova Scotia, Ontario and British Columbia. In the first quarter of its 2015 fiscal year, which ended June 30, 2014, Peller’s sales rose 9.3%, to $79.5 million from $72.7 million a year earlier. That’s partly because it started selling its Wayne Gretzky wines in Western Canada. It also launched several new products, such as skinnygrape spritzers and Panama Jack cocktails. However, strong price competition and higher sales of lessprofitable brands cut Peller’s earnings by 19.4%, to $4.1 million, or $0.30 a share, from $5.1 million, or $0.37....

THOMSON REUTERS CORP. $42 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 803.7 million; Market cap: $33.8 billion; Price-to-sales ratio: 2.6; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.thomsonreuters.com) sells information products in four areas: financial (55% of revenue, 37% of earnings); legal (27%, 41%); tax (10%, 12%); and intellectual property and science (8%, 10%). The Americas supply 60% of its revenue, followed by Europe (29%) and Asia (11%). Thomson’s revenue rose 6.2%, from $13.0 billion in 2009 to $13.8 billion in 2011 (all amounts except share price and market cap in U.S. dollars). That’s partly due to acquisitions, particularly in developing markets like Brazil. These new businesses helped offset lower sales at its main financial division as banks and brokers cut their spending after the 2008/2009 financial crisis. Asset sales hurt revenue growth...

PAYPAL HOLDINGS INC. $34 (Nasdaq symbol PYPL; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $40.8 billion; Price-to-sales ratio: 4.7; No dividends paid; TSINetwork Rating: Above Average; www. paypal.com) stopped processing transactions on U.S. online gambling websites following its 2002 acquisition by eBay.

But now that it’s an independent company again, PayPal is testing its online payment system with four U.S. gaming firms, including Caesar’s Entertainment. Online gambling could become a big source of revenue for PayPal, particularly if more states approve it. Right now, Internet gambling is only legal in Nevada, New Jersey and Delaware.

PayPal is a hold.

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As demand for traditional phone service declines, AT&T is shifting into faster-growing fields like wireless and fibre optic TV. On the surface, the company’s recent deal to buy satellite TV provider DirecTV doesn’t seem to fit with that plan. That’s because strong competition from cable operators and online streaming has hurt satellite demand in the past few years. However, DirecTV will let AT&T expand its wireless and highspeed Internet services to rural users. It will also give it a platform to expand in Latin America. Moreover, an increased number of TV subscribers will help AT&T negotiate better deals for TV shows, particularly profitable sports programming like NFL football....

TIM HORTONS INC. $80 (New York symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 132.8 million; Market cap: $10.6 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.5%; TSINetwork Rating: Average; www.timhortons.com) became a wholly owned subsidiary of the Wendy’s hamburger chain in 1995. Under pressure from activist investors, Wendy’s spun off Tims as a separate company in 2006. The stock is up 183% since the spinoff, partly because Tims has just accepted a friendly takeover offer from Miami-based Burger King Worldwide Inc. (New York symbol BKW). Tims shareholders can opt to take $88.50 (Canadian) a share in cash, or 3.0879 shares of Burger King (worth $93.72 U.S.). However, Burger King plans to limit the overall cash payout, so most Tims investors will get $65.50 (Canadian) in cash plus 0.8025 of a share (for a total of $84.69 U.S.)....

Oil prices have held steady at around $100 a barrel, even as the U.S. shale boom has increased that country’s production by 70% in the past five years. That’s mainly due to fears that unrest in the Middle East and Ukraine could threaten world oil supplies. We feel the best way to invest in the cyclical oil and gas industry is through well-established producers like these four. Their high-quality operations give them plenty of cash flow to replenish their reserves and pay for share buybacks and dividends. However, not all are buys right now. CHEVRON CORP. $129 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.9 billion; Market cap: $245.1 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.chevron.com) is the second-largest integrated oil company in the U.S. by revenue, after ExxonMobil (New York symbol XOM)....

ALCOA INC. $17 (New York symbol AA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.2 billion; Market cap: $20.4 billion; Price-to-sales ratio: 1.7; Dividend yield: 0.7%; TSINetwork Rating: Average; www.alcoa.com) continues to close older, inefficient smelters in response to weak aluminum prices. The company now plans to shut down its Portovesme smelter in Italy, which will cut Alcoa’s global smelting capacity by 4%. Severance payments and other costs will cut the company’s earnings by around $0.15 a share in the third quarter of 2014. To put that in context, Alcoa earned $0.18 a share before one-time items in the second quarter....

C.R. BARD INC. $149 (New York symbol BCR; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 74.6 million; Market cap: $11.1 billion; Price-to-sales ratio: 3.7; Dividend yield: 0.6%; TSINetwork Rating: Above Average; www.crbard.comtarget="_blank”) continues to develop successful new medical devices. For example, it should soon receive approval to start selling a catheter that uses a drug-coated balloon to treat clogged arteries. Products like this are helping Bard offset the 2.3% tax it has to pay on certain medical devices it sells in the U.S. under Obamacare. In the second quarter of 2014, Bard’s earnings rose 22.0%, to $160.7 million from $131.7 million a year earlier. Earnings per share gained 29.6%, to $2.06 from $1.59. Revenue rose 8.8%, to $827.1 million from $759.9 million. Bard spends around 10% of its revenue on research. The company recently increased its quarterly dividend by 4.8%, to $0.22 a share from $0.21. The stock has gained 30% in the past year, so the new annual rate of $0.88 yields just 0.6%....

These two chipmakers continue to dominate their niche markets. We prefer Texas Instruments over Nvidia, as its wider variety of products and customers cuts its risk. TEXAS INSTRUMENTS INC. $48 (Nasdaq symbol TXN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $52.8 billion; Price-to-sales ratio: 4.2; Dividend yield: 2.5%; TSINetwork Rating: Average; www.ti.com) used to focus on chips for cellphones, but has shifted to analog chips, which convert inputs like touch, sound and pressure into electronic signals that computers can understand. Manufacturers use these chips in a variety of products, including cars, medical devices and appliances. In the quarter ended June 30, 2014, the company’s earnings rose 3.5%, to $683 million from $660 million a year earlier. Texas Instruments spent $743 million on share buybacks during the quarter. As a result, earnings per share gained 6.9%, to $0.62 from $0.58....

DIAGEO PLC ADRs $119 (New York symbol DEO; Conservative Growth Portfolio, Consumer sector; ADRs outstanding: 628.1 million; Market cap: $74.7 billion; Price-to-sales ratio: 4.4; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.diageo.com) reported that its sales fell 9.2% in its 2014 fiscal year, which ended June 30, 2014, to 10.3 billion British pounds from 11.3 billion in fiscal 2013 (1 pound=$1.80 Canadian). That’s mainly due to unfavourable currency exchange rates. Earnings per ADR declined 7.3%, to 3.82 pounds from 4.12 (each ADR represents four common shares). The company recently increased its stake in United Spirits, India’s largest alcoholic-beverage maker, to 54.78% from 28.78%. That should push up Diageo’s fiscal 2015 earnings to 4.64 poundsper ADR. The stock trades at 15.5 times that forecast. However, exchange rate volatility could continue to weigh on the stock price. Diageo is still a hold.