price to sales ratio
SAPUTO INC. $56 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 194.8 million; Market cap: $10.9 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) now owns 87.92% of Warrnambool Cheese and Butter Factory, an Australian producer of milk, cheese, butter and other dairy products. Saputo recently launched a takeover offer for 100% of this company, but Japanese beverage maker Kirin Holdings decided to hang on to its 10% stake.
Meanwhile, Warrnambool reported that its earnings jumped 102.0% in the first half of its current fiscal year from the same period a year earlier. That’s mainly because China is importing more dairy products to meet rising domestic demand.
Saputo trades at a somewhat high 18.8 times the $2.98 a share it will probably earn in the year ending March 31, 2014.
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Meanwhile, Warrnambool reported that its earnings jumped 102.0% in the first half of its current fiscal year from the same period a year earlier. That’s mainly because China is importing more dairy products to meet rising domestic demand.
Saputo trades at a somewhat high 18.8 times the $2.98 a share it will probably earn in the year ending March 31, 2014.
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AGRIUM INC. $105 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 143.7 million; Market cap: $15.1 billion; Price-to-sales ratio: 0.9; Dividend yield 3.2%; TSINetwork Rating: Average; www.agrium.com) plans to expand its nitrogen fertilizer plant in Borger, Texas.
Besides increasing fertilizer production, these upgrades will let Agrium make diesel exhaust fluid, which helps cut harmful emissions from diesel-powered vehicles.
The company will spend $720 million U.S. on this project, which it expects to complete in the second half of 2015.
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Besides increasing fertilizer production, these upgrades will let Agrium make diesel exhaust fluid, which helps cut harmful emissions from diesel-powered vehicles.
The company will spend $720 million U.S. on this project, which it expects to complete in the second half of 2015.
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MANITOBA TELECOM SERVICES INC. $30 (Toronto symbol MBT; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 77.1 million; Market cap: $2.3 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.7%; TSINetwork Rating: Average; www.mts.ca) get 60% of its revenue from its 501,388 wireless, 486,833 telephone, 208,331 highspeed Internet and 109,085 TV customers in Manitoba. The remaining 40% comes from Allstream, which sells integrated telephone, Internet and other communication services to businesses across Canada.
The company paid $8.8 million for new spectrum in Manitoba. To put that in context, it lost $84.4 million, or $1.24 a share, in 2013. However, that loss was mainly due to a $130.4-million writedown of Allstream after the federal government blocked the sale of this business. Excluding all unusual items, Manitoba Telecom earned $1.69 a share. In 2012, it earned $144.5 million, or $2.17 a share.
Revenue fell 4.1% in 2013, to $1.6 billion from $1.7 billion. That’s mainly because declining demand for local and long-distance service cut Allstream’s revenue by 11.2%.
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The company paid $8.8 million for new spectrum in Manitoba. To put that in context, it lost $84.4 million, or $1.24 a share, in 2013. However, that loss was mainly due to a $130.4-million writedown of Allstream after the federal government blocked the sale of this business. Excluding all unusual items, Manitoba Telecom earned $1.69 a share. In 2012, it earned $144.5 million, or $2.17 a share.
Revenue fell 4.1% in 2013, to $1.6 billion from $1.7 billion. That’s mainly because declining demand for local and long-distance service cut Allstream’s revenue by 11.2%.
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TELUS CORP. $39 (Toronto symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 623.4 million; Market cap: $24.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.telus.com) gets 54% of its revenue from its 7.8 million wireless subscribers across Canada. It also has 3.3 million phone customers, 1.4 million highspeed Internet users and 815,000 TV subscribers.
The company spent $1.14 billion on new spectrum in the recent auction. That will let it expand its high-speed wireless network to reach 97% of Canada’s population, up from 80% now.
Meanwhile, strong demand for wireless and high-speed Internet continues to offset weaker revenue from its land line business. Telus earned $1.4 billion in 2013, up 13.4% from $1.2 billion in 2012. Due to fewer shares outstanding, earnings per share gained 15.5%, to $2.16 from $1.87. Revenue rose 4.4%, to $11.4 billion from $10.9 billion.
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The company spent $1.14 billion on new spectrum in the recent auction. That will let it expand its high-speed wireless network to reach 97% of Canada’s population, up from 80% now.
Meanwhile, strong demand for wireless and high-speed Internet continues to offset weaker revenue from its land line business. Telus earned $1.4 billion in 2013, up 13.4% from $1.2 billion in 2012. Due to fewer shares outstanding, earnings per share gained 15.5%, to $2.16 from $1.87. Revenue rose 4.4%, to $11.4 billion from $10.9 billion.
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HOME CAPITAL GROUP INC. $44 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 69.5 million; Market cap; $3.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.5%; TSINetwork Rating: Average; www. homecapital.com) gets around 90% of its revenue by making residential mortgage loans to borrowers who don’t meet the stricter standards of larger, traditional lenders, like banks. Its clients include recent immigrants with limited credit histories, and self-employed people.
The remaining 10% of Home Capital’s revenue mainly comes from credit cards and other loans to consumers and businesses.
Low interest rates continue to fuel loan demand. As a result, Home Capital’s revenue rose 7.0% in 2013, to $949.5 million from $887.7 million in 2012. Earnings gained 14.8%, to $257.7 million, or $3.68 a share, from $224.6 million, or $3.23. (All per-share amounts adjusted for a 2-for-1 stock split in March 2014.)
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The remaining 10% of Home Capital’s revenue mainly comes from credit cards and other loans to consumers and businesses.
Low interest rates continue to fuel loan demand. As a result, Home Capital’s revenue rose 7.0% in 2013, to $949.5 million from $887.7 million in 2012. Earnings gained 14.8%, to $257.7 million, or $3.68 a share, from $224.6 million, or $3.23. (All per-share amounts adjusted for a 2-for-1 stock split in March 2014.)
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ENCANA CORP. $22 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 740.9 million; Market cap: $16.3 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.4%; TSINetwork Rating: Average; www.encana.com) has decided not to sell its Deep Panuke offshore natural gas platform near Nova Scotia. This project reached full production of 300 million cubic feet a day in late 2013, which is equal to 11% of Encana’s total output.
Unusually cold winter weather has surred higher natural gas usage, and pushed up prices. That helps improve Deep Panuke’s profitability.
Encana is a buy.
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Unusually cold winter weather has surred higher natural gas usage, and pushed up prices. That helps improve Deep Panuke’s profitability.
Encana is a buy.
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LINAMAR CORP. $50 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.8 million; Market cap: $3.2 billion; Price-to-sales ratio: 0.9; Dividend yield: 0.8%; TSINetwork Rating: Extra Risk; www.linamar.com) continues to benefit from strong car sales, which have increased demand for its engines and transmissions. At the same time, rising construction activity has spurred sales of its self-propelled, scissor-type elevating work platforms, which it sells under the Skyjack name.
In 2013, the company earned a record $3.34 a share, up 49.1% from $2.24 in 2012. Sales rose 11.6%, to a record $3.6 billion from $3.2 billion.
The company also raised its quarterly dividend by 25.0%, from $0.08 a share to $0.10. The stock has nearly doubled in the past year, which is why the new annual rate of $0.40 yields just 0.8%. However, the stock is still attractive at 13.1 times Linamar’s likely 2014 earnings of $3.83 a share.
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In 2013, the company earned a record $3.34 a share, up 49.1% from $2.24 in 2012. Sales rose 11.6%, to a record $3.6 billion from $3.2 billion.
The company also raised its quarterly dividend by 25.0%, from $0.08 a share to $0.10. The stock has nearly doubled in the past year, which is why the new annual rate of $0.40 yields just 0.8%. However, the stock is still attractive at 13.1 times Linamar’s likely 2014 earnings of $3.83 a share.
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NORDION INC. $12 (Toronto symbol NDN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 61.9 million; Market cap: $742.8 million; Price-to-sales ratio: 2.7; Dividend suspended in September 2012; TSINetwork Rating: Extra Risk; www.nordion.com) sells isotopes for cancer detection and research. It also makes products that sterilize food and surgical tools.
In its fiscal 2014 first quarter, which ended January 31, 2014, Nordion’s earnings jumped to $36.5 million, or $0.59 a share (all amounts except share price and market cap in U.S. dollars). A year earlier, it earned $2.9 million, or $0.05 a share. The gain was partly due to positive exchange rates, which added $0.31 to the latest per-share earnings.
These figures exclude unusual items, such as costs related to the company’s strategic review. As part of this process, Nordion sold its Targeted Therapies division for $190 million in July 2013. This business makes TheraSphere, a process for treating liver cancer using millions of microscopic glass beads containing radioactive materials.
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In its fiscal 2014 first quarter, which ended January 31, 2014, Nordion’s earnings jumped to $36.5 million, or $0.59 a share (all amounts except share price and market cap in U.S. dollars). A year earlier, it earned $2.9 million, or $0.05 a share. The gain was partly due to positive exchange rates, which added $0.31 to the latest per-share earnings.
These figures exclude unusual items, such as costs related to the company’s strategic review. As part of this process, Nordion sold its Targeted Therapies division for $190 million in July 2013. This business makes TheraSphere, a process for treating liver cancer using millions of microscopic glass beads containing radioactive materials.
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BLACKBERRY LTD. $10 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 526.0 million; Market cap: $5.3 billion; Price-to-sales ratio: 0.6; No dividends paid; TSINetwork Rating: Speculative; www.blackberry.com) has jumped about 50% in the past three months, thanks to its new strategic plan.
In response to weak sales of its new BlackBerry 10 smartphones, the company is cutting 40% of its workforce and selling most of its Canadian real estate, mainly buildings near its Waterloo, Ontario, headquarters. It will lease back some of these properties after the sale.
As well, BlackBerry has signed a new five-year deal with Taiwan-based electronics maker Foxconn. Under this agreement, BlackBerry and Foxconn will jointly develop new smartphones, particularly for fast-growing markets like Indonesia. Foxconn will also assume responsibility for making these phones, which should help BlackBerry better manage its inventories and avoid costly writedowns of unsold phones.
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In response to weak sales of its new BlackBerry 10 smartphones, the company is cutting 40% of its workforce and selling most of its Canadian real estate, mainly buildings near its Waterloo, Ontario, headquarters. It will lease back some of these properties after the sale.
As well, BlackBerry has signed a new five-year deal with Taiwan-based electronics maker Foxconn. Under this agreement, BlackBerry and Foxconn will jointly develop new smartphones, particularly for fast-growing markets like Indonesia. Foxconn will also assume responsibility for making these phones, which should help BlackBerry better manage its inventories and avoid costly writedowns of unsold phones.
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TRANSCONTINENTAL INC. $15 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.3%; TSINetwork Rating: Average; www. tctranscontinental.com) aims to cut its reliance on cyclical print advertising with a new deal to buy Missouri-based Capri Packaging, which makes plastic packaging for food. The company will pay $133 million U.S. when the deal closes later this year.
Capri’s two plants generate $72 million U.S. of annual revenue. Transcontinental feels its commercial printing expertise will help it make Capri more efficient.
Acquisitions always expose the buyer to hidden risks. However, Transcontinental has signed a 10-year deal to supply packaging to dairy producer Schreiber Foods, Capri’s parent company. Schreiber accounts for 75% of Capri’s revenue, so this acquisition is safer than it looks.
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Capri’s two plants generate $72 million U.S. of annual revenue. Transcontinental feels its commercial printing expertise will help it make Capri more efficient.
Acquisitions always expose the buyer to hidden risks. However, Transcontinental has signed a 10-year deal to supply packaging to dairy producer Schreiber Foods, Capri’s parent company. Schreiber accounts for 75% of Capri’s revenue, so this acquisition is safer than it looks.
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