price to sales ratio
FORTIS INC. $31 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 211.7 million; Market cap: $6.6 billion; Price-to-sales ratio: 1.8; Dividend yield 4.0%; TSINetwork Rating: Above Average; www.fortis.ca) is the main electricity supplier in Newfoundland and Prince Edward Island. It also distributes natural gas in B.C. and operates power plants in other parts of Canada, the U.S. and the Caribbean.
On June 27, 2013, Fortis paid $1.5 billion U.S. for CH Energy, which distributes gas and electricity in New York State.
Without costs related to this acquisition and other unusual items, Fortis earned $61 million, or $0.32 a share, in the second quarter of 2013. That’s down 10.3% from $68 million, or $0.36, a year earlier. The decline is mainly due to lower rates and volumes at its B.C. gas utility. Revenue fell 0.3%, to $790 million from $792 million.
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On June 27, 2013, Fortis paid $1.5 billion U.S. for CH Energy, which distributes gas and electricity in New York State.
Without costs related to this acquisition and other unusual items, Fortis earned $61 million, or $0.32 a share, in the second quarter of 2013. That’s down 10.3% from $68 million, or $0.36, a year earlier. The decline is mainly due to lower rates and volumes at its B.C. gas utility. Revenue fell 0.3%, to $790 million from $792 million.
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PRECISION DRILLING CORP. $10 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 276.9 million; Market cap: $2.8 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.0%; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract-drilling services to land-based oil and gas producers, mainly in North America. As of June 30, 2013, it had 324 rigs in service.
Wet weather in Western Canada and low gas prices have hurt demand for Precision’s rigs. In the second quarter of 2013, its revenue fell 0.8%, to $378.9 million from $382.0 million a year earlier.
However, demand for the company’s Super Series rigs, which can reach deeper pockets of oil and gas, remains strong.
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Wet weather in Western Canada and low gas prices have hurt demand for Precision’s rigs. In the second quarter of 2013, its revenue fell 0.8%, to $378.9 million from $382.0 million a year earlier.
However, demand for the company’s Super Series rigs, which can reach deeper pockets of oil and gas, remains strong.
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TORONTO-DOMINION BANK $91 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 917.6 million; Market cap: $83.5 billion; Price-to-sales ratio: 2.8; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.td.com) has agreed to pay $52.5 million U.S. to settle charges that it failed to report suspicious transactions related to a fraudulent investment scheme in Florida. Separately, the bank is appealing a court ruling that it pay $67 million U.S. related to this case.
These amounts are small next to the $1.6 billion (Canadian), or $1.65 a share, that TD earned in the quarter ended July 31, 2013. Still, settling these charges cuts TD’s risk, especially in light of tighter enforcement from U.S. securities regulators.
TD Bank is a buy....
These amounts are small next to the $1.6 billion (Canadian), or $1.65 a share, that TD earned in the quarter ended July 31, 2013. Still, settling these charges cuts TD’s risk, especially in light of tighter enforcement from U.S. securities regulators.
TD Bank is a buy....
BLACKBERRY LTD. $8.44 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.6 million; Market cap: $4.4 billion; Price-to-sales ratio: 0.4; No dividends paid; TSINetwork Rating: Speculative; www.blackberry.com) lost $965 million, or $1.84 a share, in the three months ended August 31, 2013 (all amounts except share price and market cap in U.S. dollars). That’s mainly because it wrote down the value of its unsold Z10 touchscreen smartphones by $934 million. A year earlier, it lost $229 million, or $0.44 a share. Revenue fell 45.0%, to $1.6 billion from $2.9 billion.
The company has accepted a $9.00 U.S.-a-share takeover offer from Fairfax Financial Holdings (Toronto symbol FFH). However, it’s unclear if Fairfax can complete the deal. That’s why the stock is trading at 9.8% below the offer price.
Due to its worsening financial condition, we’ve cut BlackBerry’s TSINetwork Rating from “Average” to “Speculative.”
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The company has accepted a $9.00 U.S.-a-share takeover offer from Fairfax Financial Holdings (Toronto symbol FFH). However, it’s unclear if Fairfax can complete the deal. That’s why the stock is trading at 9.8% below the offer price.
Due to its worsening financial condition, we’ve cut BlackBerry’s TSINetwork Rating from “Average” to “Speculative.”
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CGI GROUP INC. $36 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 310.9 million; Market cap: $11.2 billion; Price-to-sales ratio: 1.2; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) is Canada’s largest provider of computer outsourcing services. CGI helps its clients automate routine functions, like accounting and buying supplies. That makes them more efficient and lets them focus on their main businesses.
CGI was our Stock of the Year for both 2010 and 2011. We first recommended it as our top choice at $15, which works out to a 140.0% gain.
The company continues to benefit from its August 2012 purchase of U.K.-based outsourcing firm Logica. Thanks to Logica, CGI earned $200.4 million in its 2013 third quarter, which ended June 30, 2013. That’s up 115.3% from $93.0 million a year ago. Due to more shares outstanding, per-share earnings rose 80.0%, to $0.63 from $0.35.
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CGI was our Stock of the Year for both 2010 and 2011. We first recommended it as our top choice at $15, which works out to a 140.0% gain.
The company continues to benefit from its August 2012 purchase of U.K.-based outsourcing firm Logica. Thanks to Logica, CGI earned $200.4 million in its 2013 third quarter, which ended June 30, 2013. That’s up 115.3% from $93.0 million a year ago. Due to more shares outstanding, per-share earnings rose 80.0%, to $0.63 from $0.35.
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CANADIAN PACIFIC RAILWAY LTD. $134 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 175.0 million; Market cap: $23.5 billion; Price-to-sales ratio: 3.9; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.cpr.ca) transports freight between Montreal and Vancouver and connects with hubs in the U.S. Midwest and Northeast. It gets 25% of its revenue from the U.S.
CP was our top pick for 2012 at $69. Since then, the stock has jumped 94.2%.
The company continues to improve its efficiency, mainly with more efficient locomotives, better tracks, and software that optimizes train loads and speeds. In the quarter ended June 30, 2013, CP’s earnings soared 144.7%, to $252 million from $103 million a year earlier. Per-share earnings gained 138.3%, to $1.43 from $0.60, on more shares outstanding.
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CP was our top pick for 2012 at $69. Since then, the stock has jumped 94.2%.
The company continues to improve its efficiency, mainly with more efficient locomotives, better tracks, and software that optimizes train loads and speeds. In the quarter ended June 30, 2013, CP’s earnings soared 144.7%, to $252 million from $103 million a year earlier. Per-share earnings gained 138.3%, to $1.43 from $0.60, on more shares outstanding.
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TECK RESOURCES LTD. $26 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 576.3 million; Market cap: $15.0 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.5%; TSINetwork Rating: Average; www.teck.com) is a leading producer of metallurgical coal, a key ingredient in steelmaking. It also produces copper and zinc.
The stock is down 29.7% from $37 when we named it our top pick for 2013. That’s mainly because slowing industrial activity, mainly in Asia, has hurt commodity prices.
In quarter ended June 30, 2013, earnings fell 50.5%, to $197 million, or $0.34 a share. These figures exclude unusual items, such as foreign exchange losses and writedowns. A year earlier, Teck earned $398 million, or $0.68 a share.
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The stock is down 29.7% from $37 when we named it our top pick for 2013. That’s mainly because slowing industrial activity, mainly in Asia, has hurt commodity prices.
In quarter ended June 30, 2013, earnings fell 50.5%, to $197 million, or $0.34 a share. These figures exclude unusual items, such as foreign exchange losses and writedowns. A year earlier, Teck earned $398 million, or $0.68 a share.
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MANITOBA TELECOM SERVICES INC. $29 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 67.8 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 5.9%; TSINetwork Rating: Average; www.mts.ca) fell 10% after the federal government blocked its recent deal to sell its Allstream subsidiary to an Egyptian billionaire.
Allstream provides integrated telephone, Internet and other communication services to over 50,000 businesses across Canada, as well as government agencies. Ottawa felt that selling Allstream to a foreign investor could risk national security.
If you disregard costs related to the sale, Manitoba Telecom now expects to earn $1.15 to $1.45 a share in 2013. Without Allstream, it probably would have earned around $1.75 a share. The stock trades at a high 22.3 times the midpoint of the new range.
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Allstream provides integrated telephone, Internet and other communication services to over 50,000 businesses across Canada, as well as government agencies. Ottawa felt that selling Allstream to a foreign investor could risk national security.
If you disregard costs related to the sale, Manitoba Telecom now expects to earn $1.15 to $1.45 a share in 2013. Without Allstream, it probably would have earned around $1.75 a share. The stock trades at a high 22.3 times the midpoint of the new range.
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AGRIUM INC. $87 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 147.0 million; Market cap: $12.8 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.6%; TSINetwork Rating: Average; www.agrium.com) has expanded its retail operations in the past few years.
This business is now the world’s largest seller of seeds, fertilizers and other products to farmers, with over 1,200 stores in North America, Australia, Argentina, Chile, Uruguay and Brazil. In 2012, the retail division accounted for 65% of Agrium’s revenue and 32% of its earnings.
In addition, Agrium makes nitrogen-based fertilizer at four wholly owned plants in Canada and one in the U.S. It also owns 50% of a nitrogen facility in Argentina and 26% of one in Egypt. Operating in these countries adds risk, but these plants only account for a small part of Agrium’s revenue. In addition, this division makes potash and phosphate fertilizers.
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This business is now the world’s largest seller of seeds, fertilizers and other products to farmers, with over 1,200 stores in North America, Australia, Argentina, Chile, Uruguay and Brazil. In 2012, the retail division accounted for 65% of Agrium’s revenue and 32% of its earnings.
In addition, Agrium makes nitrogen-based fertilizer at four wholly owned plants in Canada and one in the U.S. It also owns 50% of a nitrogen facility in Argentina and 26% of one in Egypt. Operating in these countries adds risk, but these plants only account for a small part of Agrium’s revenue. In addition, this division makes potash and phosphate fertilizers.
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United Technologies operates in two highly cyclical markets: building construction and aerospace. It gets around 20% of its revenue from military clients, so recent government cuts to defence spending also add to its risk.
However, the company is in a strong position to profit from several long-term trends.
For example, sales of its jet engines should rise as airlines replace their aging fleets....
However, the company is in a strong position to profit from several long-term trends.
For example, sales of its jet engines should rise as airlines replace their aging fleets....