price to sales ratio
CANADIAN TIRE CORP. $74 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.2 million; Market cap: $6.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.canadiantire.ca) operates 490 Canadian Tire stores, which specialize in automotive, household and sporting goods. The company owns these stores, but franchisees (called dealers) operate most of them.
The company recently negotiated a new 11-year contract with its dealers. This should make it easier for Canadian Tire and its dealers to remodel stores and adjust inventories as they compete with U.S.- based retailers like Wal-Mart and Target.
Canadian Tire is a buy....
The company recently negotiated a new 11-year contract with its dealers. This should make it easier for Canadian Tire and its dealers to remodel stores and adjust inventories as they compete with U.S.- based retailers like Wal-Mart and Target.
Canadian Tire is a buy....
CANADIAN IMPERIAL BANK OF COMMERCE $81 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 401.9 million; Market cap: $32.5 billion; Price-to-sales ratio: 1.9; D i v i d e n d y i e l d : 4 . 6 % ; TSINetwork Rating: Above Average; www.cibc.com) is buying Atlantic Trust Private Wealth Management, which sells portfolio management services to wealthy clients in the U.S.
CIBC will pay $210 million U.S. when the deal closes later this year. To put that in context, it earned $895 million (Canadian), or $2.15 a share, in the three months ended January 31, 2013. Atlantic Trust will add $20 billion U.S. to the $223 billion (Canadian) in assets that CIBC’s wealth management division already has under administration.
CIBC is a buy....
CIBC will pay $210 million U.S. when the deal closes later this year. To put that in context, it earned $895 million (Canadian), or $2.15 a share, in the three months ended January 31, 2013. Atlantic Trust will add $20 billion U.S. to the $223 billion (Canadian) in assets that CIBC’s wealth management division already has under administration.
CIBC is a buy....
TRANSCANADA CORP. $49 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 707.0 million; Market cap: $34.6 billion; Price-to-sales ratio: 4.2; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.transcanada.com) plans to build a new 200- kilometre crude oil pipeline that will connect Edmonton to the storage hub at Hardisty, Alberta. From there, TransCanada will pump the oil to refineries in the U.S. Midwest through its Keystone pipeline.
The project, which will cost $900 million, also includes a new oil-storage facility. The company already has long-term contracts from producers, which cuts the risk of this investment. The project should begin operating in the second half of 2015.
These investments will help TransCanada handle rising production from Alberta’s oil sands. The new system will also help support its proposed Keystone XL pipeline extension. This project, which requires U.S. government approval, would pump oil to refineries on the U.S. Gulf Coast.
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The project, which will cost $900 million, also includes a new oil-storage facility. The company already has long-term contracts from producers, which cuts the risk of this investment. The project should begin operating in the second half of 2015.
These investments will help TransCanada handle rising production from Alberta’s oil sands. The new system will also help support its proposed Keystone XL pipeline extension. This project, which requires U.S. government approval, would pump oil to refineries on the U.S. Gulf Coast.
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BLACKBERRY INC. $15 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.0 million; Market cap: $7.9 billion; Price-to-sales ratio: 0.7; No dividends paid; TSINetwork Rating: Average; www.blackberry.com) announced that the U.S. Department of Defense will let its employees use the company’s new smartphones, which run on the BlackBerry 10 operating system.
The company’s unique software helps businesses and governments encrypt mobile email messages and other sensitive data. That’s why the Defense Department has 470,000 BlackBerry users, compared to just 49,700 users of other devices.
BlackBerry is still a hold....
The company’s unique software helps businesses and governments encrypt mobile email messages and other sensitive data. That’s why the Defense Department has 470,000 BlackBerry users, compared to just 49,700 users of other devices.
BlackBerry is still a hold....
CAE INC. $11 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 259.7 million; Market cap: $2.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.8%; TSINetwork Rating: Average; www.cae.com) received orders for 35 flight simulators in the fiscal year ended March 31, 2013. That’s down slightly from 37 in 2012.
However, CAE continues to win contracts for its pilot-training operations: it now has over 100 flight schools in 30 countries. For example, it recently agreed to build a pilot-training facility for the Kuwait Air Force. Other recent contracts include deals to train pilots for airlines in South America, Turkey and Ireland.
The company probably earned $0.69 a share in fiscal 2013, and the stock trades at 15.9 times that figure. CAE’s fiscal 2014 earnings could rise to $0.79 a share, and the stock trades at a more reasonable 13.9 times that forecast. The $0.20 dividend yields 1.8%.
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However, CAE continues to win contracts for its pilot-training operations: it now has over 100 flight schools in 30 countries. For example, it recently agreed to build a pilot-training facility for the Kuwait Air Force. Other recent contracts include deals to train pilots for airlines in South America, Turkey and Ireland.
The company probably earned $0.69 a share in fiscal 2013, and the stock trades at 15.9 times that figure. CAE’s fiscal 2014 earnings could rise to $0.79 a share, and the stock trades at a more reasonable 13.9 times that forecast. The $0.20 dividend yields 1.8%.
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BOMBARDIER INC. (Toronto symbols BBD.A $4.25 and BBD.B $4.23; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $7.6 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) had commitments in place for 382 CSeries planes, including 148 firm orders, at the end of 2012. If the buyers exercise all their options, these deals would be worth around $23 billion U.S. That’s equal to 1.4 times Bombardier’s 2012 revenue of $16.8 billion U.S.
Porter Airlines recently ordered 12 CSeries planes, with an option to buy 18 more. The deal is conditional on Porter winning approval for its plan to extend the runway at the Billy Bishop Toronto City Airport in downtown Toronto. The airline’s current fleet of 26 Bombardier Q400 turboprop planes flies out of the airport now, but the runway extension would be needed to handle the CSeries jets.
As part of the agreement, Porter also has an option to buy six more Q400s. If the airline exercises all of its options, the entire deal would be worth $2.3 billion U.S. Bombardier will deliver the CSeries planes in 2016.
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Porter Airlines recently ordered 12 CSeries planes, with an option to buy 18 more. The deal is conditional on Porter winning approval for its plan to extend the runway at the Billy Bishop Toronto City Airport in downtown Toronto. The airline’s current fleet of 26 Bombardier Q400 turboprop planes flies out of the airport now, but the runway extension would be needed to handle the CSeries jets.
As part of the agreement, Porter also has an option to buy six more Q400s. If the airline exercises all of its options, the entire deal would be worth $2.3 billion U.S. Bombardier will deliver the CSeries planes in 2016.
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IGM FINANCIAL INC. $47 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 251.8 million; Market cap: $11.8 billion; Price-to-sales ratio: 4.6; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.igmfinancial.com) is Canada’s largest independent mutual fund company, with $125.8 billion of assets under management. Power Financial owns 58.4% of IGM.
The company has two main divisions. Investors Group sells its mutual funds, along with other services like portfolio management and mortgages, through 4,500 affiliated advisors. Mackenzie Financial sells its funds through independent brokers.
In 2012, Investors Group cut the management fees on most of its funds to better compete with other fund companies. This move seems to be paying off. In the three months ended March 31, 2013, Investors Group’s sales, net of redemptions, jumped 114.4% to $375.6 million from $175.2 million a year earlier.
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The company has two main divisions. Investors Group sells its mutual funds, along with other services like portfolio management and mortgages, through 4,500 affiliated advisors. Mackenzie Financial sells its funds through independent brokers.
In 2012, Investors Group cut the management fees on most of its funds to better compete with other fund companies. This move seems to be paying off. In the three months ended March 31, 2013, Investors Group’s sales, net of redemptions, jumped 114.4% to $375.6 million from $175.2 million a year earlier.
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MAPLE LEAF FOODS INC. $13 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.0 million; Market cap: $1.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.2%; TSINetwork Rating: Average; www.mapleleaf.ca) recently increased the prices of its meat products to offset rising costs of animal feed after last year’s drought in the U.S. The recent drop in the value of the yen has also made its pork products more expensive in Japan. As a result, Maple Leaf’s sales fell 4.1% in the first quarter of 2013, to $1.1 billion from $1.2 billion a year earlier. If you exclude the cost of a major restructuring, which includes building new plants and eliminating unprofitable products, Maple Leaf lost $0.06 a share, compared with a year-earlier profit of $0.06 a share.
Due to new accounting rules for pensions, Maple Leaf has cut its gross margin (gross profits as a percentage of sales) target for 2015 to 11.7% from 12.5%. That’s still a big improvement over its 2012 gross margin of 8.6%.
Maple Leaf Foods is still a buy....
Due to new accounting rules for pensions, Maple Leaf has cut its gross margin (gross profits as a percentage of sales) target for 2015 to 11.7% from 12.5%. That’s still a big improvement over its 2012 gross margin of 8.6%.
Maple Leaf Foods is still a buy....
POTASH CORP. OF SASKATCHEWAN $44 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 865.1 million; Market cap: $38.1 billion; Price-to-sales ratio: 4.7; Dividend yield: 2.6%; TSINetwork Rating: Average; www.potashcorp.com) no longer aims to buy control of Israel Chemicals, which produces potash from minerals it extracts from the Dead Sea. Potash Corp. wanted to increase its stake from 13.9% to at least 51%, but the plan faced intense political opposition. The company plans to hang on to this investment and may try to buy more of Israel Chemicals in the future.
Meanwhile, the company’s sales rose 20.3% in the three months ended March 31, 2013, to $2.1 billion from $1.7 billion a year earlier (all amounts except share price and market cap in U.S. dollars). Earnings rose 13.2%, to $556 million from $491 million. Due to more shares outstanding, per-share earnings rose 12.5%, to $0.63 from $0.56. New contracts with potash buyers in China and India, plus higher shipments to Brazil, helped offset a 16.6% drop in the company’s average realized selling price.
Potash Corp. is a buy....
Meanwhile, the company’s sales rose 20.3% in the three months ended March 31, 2013, to $2.1 billion from $1.7 billion a year earlier (all amounts except share price and market cap in U.S. dollars). Earnings rose 13.2%, to $556 million from $491 million. Due to more shares outstanding, per-share earnings rose 12.5%, to $0.63 from $0.56. New contracts with potash buyers in China and India, plus higher shipments to Brazil, helped offset a 16.6% drop in the company’s average realized selling price.
Potash Corp. is a buy....
CENOVUS ENERGY INC. $31 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $23.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.1%; TSINetwork Rating: Average; www.cenovus.com) operates three heavy oil projects in Alberta and one in Saskatchewan. It gets about half of its output from the oil sands. Conventional oil and natural gas wells supply the other half.
U.S.-based ConocoPhillips (New York symbol COP) owns 50% of Cenovus’s main Foster Creek and Christina Lake oil sands projects in Alberta. These properties produce heavy bitumen, which Cenovus ships to its 50%-owned refineries in Illinois and Texas. ConocoPhillips recently spun off its refining operations as a separate company called Phillips 66 (New York symbol PSX). This new firm owns the other 50% of these refineries.
Cenovus continues to increase its oil sands output. In the first three months of 2013, it produced 271,100 barrels of oil equivalent a day (66% oil and 34% gas), up 3.1% from 262,900 barrels a year earlier.
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U.S.-based ConocoPhillips (New York symbol COP) owns 50% of Cenovus’s main Foster Creek and Christina Lake oil sands projects in Alberta. These properties produce heavy bitumen, which Cenovus ships to its 50%-owned refineries in Illinois and Texas. ConocoPhillips recently spun off its refining operations as a separate company called Phillips 66 (New York symbol PSX). This new firm owns the other 50% of these refineries.
Cenovus continues to increase its oil sands output. In the first three months of 2013, it produced 271,100 barrels of oil equivalent a day (66% oil and 34% gas), up 3.1% from 262,900 barrels a year earlier.
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