price to sales ratio
CAE INC. $11 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 261.0 million; Market cap: $2.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.8%; TSINetwork Rating: Average; www.cae.com) has won a contract from the U.S. Air Force to train pilots to operate Predator and Reaper remotely piloted aircraft (also called drones).
This five-year deal is worth $100 million U.S. That’s small next to CAE’s annual revenue of $2.1 billion (Canadian). However, this deal should help the company win more training contracts, particularly as the U.S. military uses more drones instead of costly manned fighters.
CAE is a buy....
This five-year deal is worth $100 million U.S. That’s small next to CAE’s annual revenue of $2.1 billion (Canadian). However, this deal should help the company win more training contracts, particularly as the U.S. military uses more drones instead of costly manned fighters.
CAE is a buy....
FINNING INTERNATIONAL INC. $22 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.9 million; Market cap: $3.8 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.finning.com) sells and services heavy equipment made by U.S.-based Caterpillar Inc. (New York symbol CAT). Its main customers are in the oil, mining, forest products and construction industries.
Lower prices for copper and other commodities are prompting mining companies to cut back on equipment purchases. As a result, Finning’s revenue fell 8.2% in the three months ended June 30, 2013, to $1.6 billion from $1.8 billion a year earlier. Flooding in Alberta also delayed some deliveries. However, demand remains strong in South America. Earnings fell 2.2%, to $0.45 a share from $0.46.
The company’s long-term prospects remain bright. Weak commodity prices will probably prompt Finning’s clients to make their current gear last longer. That should spur demand for its repair and maintenance services, which now supply 50% of its revenue. Finning also earns higher profit margins from services than selling new equipment.
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Lower prices for copper and other commodities are prompting mining companies to cut back on equipment purchases. As a result, Finning’s revenue fell 8.2% in the three months ended June 30, 2013, to $1.6 billion from $1.8 billion a year earlier. Flooding in Alberta also delayed some deliveries. However, demand remains strong in South America. Earnings fell 2.2%, to $0.45 a share from $0.46.
The company’s long-term prospects remain bright. Weak commodity prices will probably prompt Finning’s clients to make their current gear last longer. That should spur demand for its repair and maintenance services, which now supply 50% of its revenue. Finning also earns higher profit margins from services than selling new equipment.
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ENBRIDGE INC. $43 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 826.0 million; Market cap: $35.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.enbridge.com) is extending its Woodland pipeline, which will let it pump more bitumen from the recently opened Kearl oil sands project in northern Alberta to refineries and other pipelines in Edmonton. Imperial Oil (see above) owns 71% of Kearl; Exxon owns the remaining 29%.
The company will spend $1.3 billion on this project, which should begin operating in the third quarter of 2015.
Enbridge is a buy.
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The company will spend $1.3 billion on this project, which should begin operating in the third quarter of 2015.
Enbridge is a buy.
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IMPERIAL OIL LTD. $42 (Toronto symbol IMO; Conservative Growth Portfolio; Resources sector; Shares outstanding: 848.0 million; Market cap: $35.6 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.1%; TSINetwork Rating: Average; www.imperialoil.ca) has teamed up with its parent company, ExxonMobil Corp. (New York symbol XOM), to buy 226,000 acres of undeveloped oil sands properties near Fort McMurray, Alberta. (Exxon owns 69.9% of Imperial.)
Imperial will hold 27.5% of these properties, while Exxon will own the remaining 72.5%. Imperial’s share of the $751-million cost is $206.5 million. That’s equal to 63% of the $327 million, or $0.38 a share, that the company earned in the second quarter of 2013.
Purchases like this will help Imperial increase its daily production from 276,000 barrels of oil equivalent (including gas) in the latest quarter to 600,000 barrels by 2020.
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Imperial will hold 27.5% of these properties, while Exxon will own the remaining 72.5%. Imperial’s share of the $751-million cost is $206.5 million. That’s equal to 63% of the $327 million, or $0.38 a share, that the company earned in the second quarter of 2013.
Purchases like this will help Imperial increase its daily production from 276,000 barrels of oil equivalent (including gas) in the latest quarter to 600,000 barrels by 2020.
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BELL ALIANT INC. $27 (Toronto symbol BA, Conservative Growth Portfolio, Utilities sector; Shares outstanding: 229.1 million; Market cap: $6.2 billion; Price-to-sales ratio: 2.2; Dividend yield: 7.0%; TSINetwork Rating: Average; www.bellaliant.ca) sells telephone and Internet services to 2.4 million customers in Atlantic Canada and rural parts of Ontario and Quebec. It also sells wireless services through an alliance with BCE (see left).
The company continues to replace its copper-wire cables with fibre optic lines. That’s letting it sell more high-speed Internet and digital TV services, which is offsetting falling demand for land lines. (Traditional phones still supply 52% of its overall revenue.)
In the three months ended June 30, 2013, Bell Aliant’s revenue rose 0.6%, to $691.8 million from $687.7 million a year ago. Earnings fell 10.8%, to $0.66 a share from $0.74. If you exclude a charge related to an early debt repayment and other unusual items, per-share earnings would have fallen 4.9%, to $0.39 from $0.41.
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The company continues to replace its copper-wire cables with fibre optic lines. That’s letting it sell more high-speed Internet and digital TV services, which is offsetting falling demand for land lines. (Traditional phones still supply 52% of its overall revenue.)
In the three months ended June 30, 2013, Bell Aliant’s revenue rose 0.6%, to $691.8 million from $687.7 million a year ago. Earnings fell 10.8%, to $0.66 a share from $0.74. If you exclude a charge related to an early debt repayment and other unusual items, per-share earnings would have fallen 4.9%, to $0.39 from $0.41.
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SNC-LAVALIN GROUP INC. $41 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.6 million; Market cap: $6.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Average; www.snclavalin.com) replaced most of its senior management following the discovery of $56 million U.S. in unusual payments it made in 2011 to help win Libyan construction contracts. SNC has also strengthened its oversight and compliance procedures in response to allegations that it used bribes to win certain contracts in Quebec.
These issues haven’t stopped the company from winning new deals. For example, MEG Energy (Toronto symbol MEG) recently hired SNC to design a new processing facility at its oil sands operation in Alberta.
However, SNC lost $37.7 million, or $0.25 a share, in the three months ended June 30, 2013. That’s mainly due to a $70.1-million charge related to delays building an oil-and-gas project in Algeria. The company also set aside $47.0 million to cover potential losses on a project in Libya that it stopped working on in 2011. A year earlier, SNC earned $31.7 million, or $0.21 a share.
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These issues haven’t stopped the company from winning new deals. For example, MEG Energy (Toronto symbol MEG) recently hired SNC to design a new processing facility at its oil sands operation in Alberta.
However, SNC lost $37.7 million, or $0.25 a share, in the three months ended June 30, 2013. That’s mainly due to a $70.1-million charge related to delays building an oil-and-gas project in Algeria. The company also set aside $47.0 million to cover potential losses on a project in Libya that it stopped working on in 2011. A year earlier, SNC earned $31.7 million, or $0.21 a share.
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AGRIUM INC. $90 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 147.0 million; Market cap: $13.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.agrium.com) gets just 4% of its revenue and 8% of its earnings from selling potash. As a result, the stock held up well after the break-up of a marketing alliance between two major potash producers in Russia and Belarus. The split could lead to sharply lower potash prices.
Prices for other fertilizers have also suffered recently, as coolerthan- normal weather prompted farmers to delay the spring planting season. That’s why Agrium’s earnings in the three months ended June 30, 2013 fell 14.8%, to $736 million from $864 million a year earlier (all amounts except share price and market cap in U.S. dollars). Earnings per share fell 9.7%, to $4.94 from $5.47.
However, sales rose 3.6%, to $7.0 billion from $6.8 billion, after an acquisition raised revenue at Agrium’s retail division by 6.6%.
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Prices for other fertilizers have also suffered recently, as coolerthan- normal weather prompted farmers to delay the spring planting season. That’s why Agrium’s earnings in the three months ended June 30, 2013 fell 14.8%, to $736 million from $864 million a year earlier (all amounts except share price and market cap in U.S. dollars). Earnings per share fell 9.7%, to $4.94 from $5.47.
However, sales rose 3.6%, to $7.0 billion from $6.8 billion, after an acquisition raised revenue at Agrium’s retail division by 6.6%.
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BLACKBERRY LTD. $11 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.2 million; Market cap: $5.8 billion; Price-to-sales ratio: 0.5; No dividends paid; TSINetwork Rating: Average; www.blackberry.com) is looking at alternatives for increasing shareholder value. Options the company is examining include the sale of some or all of its operations and joint ventures with other firms.
That’s because its new smartphones, powered by its BlackBerry 10 software, continue to face intense competition from Apple’s iPhone and devices running Google’s Android operating system.
The company will probably complete this review quickly. If not, the uncertainty may prompt its corporate and government clients to switch to competing wireless email systems.
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That’s because its new smartphones, powered by its BlackBerry 10 software, continue to face intense competition from Apple’s iPhone and devices running Google’s Android operating system.
The company will probably complete this review quickly. If not, the uncertainty may prompt its corporate and government clients to switch to competing wireless email systems.
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CANADA BREAD CO. LTD. $59 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.5 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.canadabread.ca) is Canada’s secondlargest producer of fresh and frozen baked goods, after Weston Bakery. The company also makes pastas and sauces. The company’s main brands include Dempster, Tenderflake and Olivieri. Canada Bread supplies around a third of Maple Leaf’s total sales.
The company is also investing in new facilities as part of Maple Leaf’s restructuring. In 2011, Canada Bread opened a new $100-million bakery in Hamilton, Ontario. That let it close two outdated facilities in Toronto and shift their production to the new plant. Earlier this year, it closed a third Toronto bakery.
In the second quarter of 2013, Canada Bread earned $24.5 million, or $0.97 a share. That’s down 6.0% from $26.1 million, or $1.03 a share, a year earlier. Excluding unusual items, earnings per share rose 0.9%, to $1.07 from $1.06.
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The company is also investing in new facilities as part of Maple Leaf’s restructuring. In 2011, Canada Bread opened a new $100-million bakery in Hamilton, Ontario. That let it close two outdated facilities in Toronto and shift their production to the new plant. Earlier this year, it closed a third Toronto bakery.
In the second quarter of 2013, Canada Bread earned $24.5 million, or $0.97 a share. That’s down 6.0% from $26.1 million, or $1.03 a share, a year earlier. Excluding unusual items, earnings per share rose 0.9%, to $1.07 from $1.06.
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MAPLE LEAF FOODS INC. $14 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.0 million; Market cap: $2.0 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.1%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest food processing company. It mainly sells its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. Though 90.0%-owned Canada Bread (see right), the company also makes fresh and frozen bread, pastries and pasta.
Maple Leaf continues to make progress on a major restructuring plan that includes building new plants and eliminating unprofitable products. As part of this strategy, Maple Leaf recently sold its Ontario turkey farms for a combined $48.2 million under two separate deals. The company is also installing a new computer system that will give its managers more timely information.
In the three months ended June 30, 2013, Maple Leaf earned $9,000, or a loss of $0.02 a share. A year earlier, it earned $26.0 million, or $0.16 a share. If you exclude unusual items, such as severance costs and writedowns, earnings per share fell 91.3%, to $0.02 from $0.23.
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Maple Leaf continues to make progress on a major restructuring plan that includes building new plants and eliminating unprofitable products. As part of this strategy, Maple Leaf recently sold its Ontario turkey farms for a combined $48.2 million under two separate deals. The company is also installing a new computer system that will give its managers more timely information.
In the three months ended June 30, 2013, Maple Leaf earned $9,000, or a loss of $0.02 a share. A year earlier, it earned $26.0 million, or $0.16 a share. If you exclude unusual items, such as severance costs and writedowns, earnings per share fell 91.3%, to $0.02 from $0.23.
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