price to sales ratio

RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 291.3 million; Market cap: $7.9 billion; Price-to-sales ratio: 5.0; Dividend yield: 5.1%; TSINetwork Rating: Average; www.riocan.com) is Canada’s largest real estate investment trust (REIT).

RioCan specializes in big-box-style outdoor malls. It owns 278 shopping centres in Canada, 10 of which are under development. Most are in suburban areas, where land is generally cheaper than in towns and cities. The trust often leaves room at its malls for expanding existing stores and building new ones. This makes itseasy to add more tenants.

In the past few years, RioCan has expanded in the U.S., where it now owns or invests in 48 malls, 22 of which the trust operates through a joint venture with Cedar Shopping Centers, Inc. (New York symbol CDR). RioCan owns 80% of this joint venture and 14.3% of Cedar.

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The world’s population will probably rise from 7 billion today to 9 billion by 2050. Economic growth in developing countries is also spurring demand for more and better food. To keep up with this demand, farmers will have to significantly increase their crop production. That should fuel more gains for Monsanto, the world’s largest maker of genetically modified seeds. The company’s patented seeds are more resistant to crop-damaging insects and bad weather than regular seeds. These crops also need fewer pesticides and herbicides (or weed killers). As well, many of Monsanto’s seeds require less water, which lowers the need for costly and environmentally disruptive irrigation systems....

These three industrial stocks make a wide range of products. That helps cut their risk during periods of slow growth, such as the past year. It also puts them in a good position to profit when the global economy picks up. GENERAL ELECTRIC CO. $21 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.6 billion; Market cap: $222.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.ge.com) is one of the world’s largest manufacturers. It makes equipment for generating and distributing electricity, such as turbines; aircraft engines; health care equipment; home appliances and lighting; and locomotives. To cut the risk of further losses following the 2008 / 2009 financial crisis, the company continues to scale back its GE Capital subsidiary, which provides loans and other financial services to GE’s customers. This business now accounts for 31% of GE’s overall revenue and 45% of its earnings....

PFIZER INC. $25 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 7.5 billion; Market cap: $187.5 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.pfizer.com) has agreed to buy NextWave Pharmaceuticals Inc. This private company has developed Quillivant XR, a liquid drug that treats attention deficit/hyperactivity disorder (ADHD). Pfizer’s extensive marketing and distribution operations should help expand sales of Quillivant XR. Based on future sales of this drug, this purchase could cost Pfizer a total of $700 million. That’s equal to 15% of the $4.7billion, or $0.62 a share, that it earned in the second quarter of 2012. The deal should close by the end of 2012....

MCDONALD’S CORP. $87 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.0 billion; Market cap: $87.0 billion; Price-to-sales ratio: 3.2; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.mcdonalds.com) is seeing stronger competition from other fast-food chains. The higher U.S. dollar is also undermining the value of its overseas profits. In the three months ended September 30, 2012, the company’s sales fell 0.2%, to $7.15 billion from $7.17 billion a year earlier. However, if you exclude the negative impact of foreign exchange rates, sales would have risen 4%. Overall same-store sales rose 1.9% in the quarter. Earnings fell 3.5%, to $1.46 billion from $1.51 billion. Due to fewer shares outstanding, earnings per share fell 1.4%, to $1.43 from $1.45. On a constant-currency basis, earnings per share would have risen 4%. The company also raised its quarterly dividend by 10.0%, to $0.77 a share from $0.70. The new annual rate of $3.08 yields 3.5%....

These two leading banks have recovered strongly from the 2008/2009 financial crisis. Their healthier balance sheets and tighter lending policies have also lowered the risk of future writedowns. We feel J.P. Morgan is the better choice right now. WELLS FARGO & CO. $34 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 5.3 billion; Market cap: $180.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.6%; TSINetwork Rating: Average; www.wellsfargo.com) earned $4.9 billion, or $0.88 a share, in the three months ended September 30, 2012. That’s up 21.7% from $4.1 billion, or $0.72 a share, a year earlier. The bank continues to do a good job of adjusting the terms of troubled loans it acquired when it bought rival banking firm Wachovia in 2008. In the latest quarter, it set aside $1.6 billion to cover bad loans, down 12.1% from $1.8 billion a year ago....

STATE STREET CORP. $44 (New York symbol STT; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 479.1 million; Market cap: $21.1 billion; Price-to-sales ratio: 2.2; Dividend yield: 2.2%; TSINetwork Rating: Extra Risk; www.statestreet.com) has completed its $550-million purchase of the hedge fund management business of Goldman Sachs Group Inc. (New York symbol GS). These operations should immediately add to its earnings. Meanwhile, the company earned $473 million in the three months ended September 30, 2012. That’s down 0.6% from $476 million a year earlier. Earnings per share rose 3.1%, to $0.99 from $0.96, on fewer shares outstanding. Revenue fell 2.7%, to $2.35 billion from $2.41 billion, as lower volumes hurt its trading division. State Street is a buy.

We constantly reevaluate our stock picks, to single out those with the best ratio of low risk and strong potential. These three no longer pass this test, and we now see them as sells. WEYERHAEUSER CO. $28 (New York symbol WY; Conservative Growth Portfolio, Resources sector; Shares outstanding: 537.8 million; Market cap: $15.1 billion; Price-to-sales ratio: 2.3; Dividend yield: 2.4%; TSINetwork Rating: Extra Risk; www.weyerhaeuser.com) is a leading maker of forest products, including paper and packaging. The stock is up 48% since the start of 2012. That’s mainly because of signs that the U.S. housing market is starting to recover, which should spur lumber demand. However, paper prices remain depressed....

FEDEX CORP. $91 (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 314.1 million; Market cap: $28.6 billion; Price-to-sales ratio: 0.7; Dividend yield: 0.6%; TSI Network Rating: Average; www.fedex.com) is seeing lower demand for its overnight international air delivery services. That’s because the uncertain economy is prompting shippers to use lower but cheaper forms of transportation, such as trucks and ships. In response, FedEx plans to lower its costs by replacing older planes and trucks with more fuel-efficient models. It is also cutting jobs and consolidating facilities. The company expects these moves to increase its earnings by $1.7 billion by May 31, 2015, which is the end of its 2015 fiscal year. In its latest fiscal year, FedEx earned $2.1 billion, or $6.59 a share. FedEx is a buy....

NVIDIA CORP. $12 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 619.5 million; Market cap: $7.4 billion; Price-to-sales ratio: 1.9; No dividends paid; TSINetwork Rating: Average; www.nvidia.com) is down 5% in the past three months, mainly due to concerns that slowing sales of new computers will hurt demand for its graphic chips. However, the company continues to develop new chips for mobile devices. Consumer products like smartphones and tablets accounted for just 17% of Nvidia’s revenue in the quarter ended July 29, 2012, but the contribution from these chips should continue to rise. The company’s Tegra 3 chips power two new tablet computers: Google’s Nexus 7 and Microsoft’s Surface RT. The company’s strong balance sheet will also support its high research spending (26.9% of revenue in the latest quarter). Nvidia holds cash of $3.3 billion, or $5.29 a share. Its long-term debt is just $20.2 million....