price to sales ratio
BOMBARDIER INC. (Toronto symbols BBD.A $3.90 and BBD.B $3.76; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $6.4 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.6%; TSINetwork Rating: Average; www.bombardier.com) has received a firm order for 20 of its Q400 turboprop planes from WestJet Airlines Ltd. (Toronto symbol WJA); WestJet is a recommendation of Stock Pickers Digest, our newsletter that focuses on aggressive investing.
WestJet will use these planes for its new regional airline, which will serve smaller Canadian cities. Bombardier will begin delivering these planes in 2013.
The order is worth $683 million (all amounts except share price and market cap in U.S. dollars). If WestJet exercises all of its options to buy an additional 25 planes, the entire order would be worth $1.6 billion. That’s equal to 9% of Bombardier’s 2011 revenue of $18.3 billion.
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WestJet will use these planes for its new regional airline, which will serve smaller Canadian cities. Bombardier will begin delivering these planes in 2013.
The order is worth $683 million (all amounts except share price and market cap in U.S. dollars). If WestJet exercises all of its options to buy an additional 25 planes, the entire order would be worth $1.6 billion. That’s equal to 9% of Bombardier’s 2011 revenue of $18.3 billion.
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SHAWCOR LTD. $36 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.6 million; Market cap: $2.5 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.1%; TSINetwork Rating: Average; www.shawcor.com) has won a contract from Pemex, Mexico’s state-owned oil company, to coat an underwater pipeline in the Gulf of Mexico.
The order is worth $40 million U.S., which is equal to 3% of the company’s annual revenue of $1.2 billion (Canadian). ShawCor will begin working on this project in the third quarter of 2012.
ShawCor is a buy.
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The order is worth $40 million U.S., which is equal to 3% of the company’s annual revenue of $1.2 billion (Canadian). ShawCor will begin working on this project in the third quarter of 2012.
ShawCor is a buy.
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RESEARCH IN MOTION INC. $7.56 (Toronto symbol RIM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.2 million; Market cap: $4.0 billion; Price-to-sales ratio: 0.2; No dividends paid; TSINetwork Rating: Above Average; www.rim.com) has launched a version of its PlayBook tablet computer that can run on Long-Term Evolution (LTE) wireless networks, which are up to five times faster than current networks. Until now, the PlayBook used slower Wi-Fi technology to access the Internet.
These upgrades will help the PlayBook compete with other LTE-capable tablets. However, RIM’s earnings will remain under pressure until it launches smartphones that use its new BlackBerry 10 operating system. The company expects to start selling these phones in early 2013.
RIM is a hold, but only for aggressive investors.
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These upgrades will help the PlayBook compete with other LTE-capable tablets. However, RIM’s earnings will remain under pressure until it launches smartphones that use its new BlackBerry 10 operating system. The company expects to start selling these phones in early 2013.
RIM is a hold, but only for aggressive investors.
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TIM HORTONS INC. $52 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 157.4 million; Market cap: $8.2 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.6%; TSINetwork Rating: Average; www.timhortons.com) has raised the prices of muffins, sandwiches and other items at its coffee-and-donut stores in Canada and the U.S. That’s because the drought in North America is pushing up its costs for wheat, canola oil and other ingredients.
The increases are unlikely to hurt customer traffic or sales, particularly because the company did not increase coffee prices.
Tim Hortons is a buy.
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The increases are unlikely to hurt customer traffic or sales, particularly because the company did not increase coffee prices.
Tim Hortons is a buy.
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CAE INC. $10 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.3 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.cae.com) spends around 10% of its annual revenue of $1.8 billion on research. That helps it develop simulators for new planes, like the Boeing 787 Dreamliner and Airbus A380. The company is also using these funds to apply its expertise to new fields.
For example, CAE is now making simulators and other products, including lifelike mannequins, to train paramedics and medical students. It is also focusing on the mining industry: Right now, mining firms are using software that CAE developed to plan new mines and measure reserves. These new businesses, which both have strong growth potential, now supply 5% of CAE’s revenue.
The stock trades at 12.7 times the $0.79 a share that CAE will probably earn in its 2013 fiscal year, which ends March 31, 2013. The $0.16 dividend yields 1.6%.
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For example, CAE is now making simulators and other products, including lifelike mannequins, to train paramedics and medical students. It is also focusing on the mining industry: Right now, mining firms are using software that CAE developed to plan new mines and measure reserves. These new businesses, which both have strong growth potential, now supply 5% of CAE’s revenue.
The stock trades at 12.7 times the $0.79 a share that CAE will probably earn in its 2013 fiscal year, which ends March 31, 2013. The $0.16 dividend yields 1.6%.
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HOME CAPITAL GROUP INC. $48 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.7 million; Market cap; $1.7 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.8%; TSINetwork Rating: Average; www.homecapital.com) is a mortgage lender that serves borrowers who don’t meet the stricter standards of larger, traditional lenders, like banks.
Even though Home Capital caters to riskier borrowers, it avoids huge credit losses by identifying problem loans early. It then uses this information to restructure a borrower’s repayment terms and adjust its lending policies.
In the three months ended June 30, 2012, Home Capital’s earnings rose 10.4%, to $53.2 million, or $1.54 a share. That’s despite a higher corporate tax rate in Ontario, which cut Home Capital’s earnings by $2.0 million. A year earlier, the company earned $48.2 million, or $1.38 a share.
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Even though Home Capital caters to riskier borrowers, it avoids huge credit losses by identifying problem loans early. It then uses this information to restructure a borrower’s repayment terms and adjust its lending policies.
In the three months ended June 30, 2012, Home Capital’s earnings rose 10.4%, to $53.2 million, or $1.54 a share. That’s despite a higher corporate tax rate in Ontario, which cut Home Capital’s earnings by $2.0 million. A year earlier, the company earned $48.2 million, or $1.38 a share.
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p>ENBRIDGE INC. $39 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 797.0 million; Market cap: $31.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.enbridge.com) recently repaired a leaking oil pipeline in Wisconsin. The company has faced criticism over leaks like this. That could hurt its proposed $5.5-billion Northern Gateway project, which would pump oil from Edmonton to Kitimat, B.C. However, Enbridge still has a strong safety record, and it has pledged to spend an extra $500 million on thicker steel and extra monitoring for leaks.
Enbridge is a buy.
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Enbridge is a buy.
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SNC-LAVALIN GROUP INC. $37 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $5.6 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.4%; TSINetwork Rating: Average; www.snclavalin.com) earned $32.5 million, or $0.21 a share, in the three months ended June 30, 2012. That’s down 68.2%, from $102.2 million, or $0.67 a share, a year earlier. The company spent $50 million more than it expected on a power plant in Tunisia and a petrochemical plant in Russia. That was the main reason for the lower earnings.
The stock has also come under pressure in the past few months over $56 million U.S. in unusual payments that the company made to agents it hired to secure certain construction contracts. However, this matter has had little impact on SNC’s ability to win new engineering deals: revenue rose 14.2% in the quarter, to $1.9 billion from $1.7 billion.
SNC-Lavalin is a buy.
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The stock has also come under pressure in the past few months over $56 million U.S. in unusual payments that the company made to agents it hired to secure certain construction contracts. However, this matter has had little impact on SNC’s ability to win new engineering deals: revenue rose 14.2% in the quarter, to $1.9 billion from $1.7 billion.
SNC-Lavalin is a buy.
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CENOVUS ENERGY INC. $32 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.7 million; Market cap: $24.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.8%; TSINetwork Rating: Extra Risk; 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.
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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.
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IMPERIAL OIL LTD. $44 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $37.3 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.1%; TSINetwork Rating: Average; www.imperialoil.ca) is Canada’s second-largest publicly traded oil company, after Suncor. U.S.-based ExxonMobil Corp. (New York symbol XOM) owns 69.6% of Imperial.
The company is making a number of big investments to boost its oil sands production. Right now, it gets most of its oil from its Cold Lake oil sands project in Alberta. Imperial recently announced that it would spend $2 billion to add 40,000 barrels a day to Cold Lake’s current daily output of around 152,000 barrels. It expects to complete these upgrades in 2014.
Meanwhile, Imperial continues to make progress with its Kearl oil sands project. Imperial owns 71% of Kearl. ExxonMobil owns the remaining 29%.
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The company is making a number of big investments to boost its oil sands production. Right now, it gets most of its oil from its Cold Lake oil sands project in Alberta. Imperial recently announced that it would spend $2 billion to add 40,000 barrels a day to Cold Lake’s current daily output of around 152,000 barrels. It expects to complete these upgrades in 2014.
Meanwhile, Imperial continues to make progress with its Kearl oil sands project. Imperial owns 71% of Kearl. ExxonMobil owns the remaining 29%.
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