price to sales ratio

ANDREW PELLER LTD. $9.08 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $135.3 million; Price-to-sales ratio: 0.5; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.andrewpeller.com) has formed a joint venture with the winery owned by hockey star Wayne Gretzky. Peller feels it can use its marketing and distribution expertise to increase sales of Gretzky wines in Canada. Meanwhile, Peller’s sales rose 1.4% in the three months ended September 30, 2011, to $70.0 million from $69.0 million a year earlier. That’s mainly because it is seeing strong demand for its new products and its more-profitable premium brands. Peller earned $3.4 million, or $0.24 a share, up 80.7% from $1.9 million, or $0.13 a share, a year earlier quarter. If you exclude gains on hedging contracts that the company uses to lock in foreignexchange rates, earnings would have risen 8.4%. Andrew Peller is a buy.

CANADIAN NATIONAL RAILWAY CO. $79 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 444.9 million; Market cap: $35.1 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.cn.ca) operates the largest freight rail network in Canada. It also serves 16 U.S. states. Ottawa nationalized CN in 1918 because of the vital role the company played in Canada’s early growth. CN became a publicly traded company in 1995. Revenue and earnings look set to rise Railways are highly cyclical, which explains CN’s erratic revenue and earnings history. CN’s revenue fell slightly, from $7.93 billion in 2006 to $7.90 billion in 2007, but rose 7.4%, to $8.5 billion, in 2008. The recession cut revenue by 13.1%, to $7.4 billion, in 2009. But CN’s 2010 revenue surged 12.6%, to $8.3 billion, and its 2011 revenue should rise to around $8.9 billion....

World stock market investing remains risky. That’s because many emerging countries have language barriers, weak investor-protection laws, less commitment to openness, fairness and so on. A better way for North American investors to profit from rapid overseas growth is by investing in well-established, multinational U.S. companies. These firms’ well-known brands put them in a good position to enter new markets and quickly win over new customers. A great example of a U.S. company with a knack for successfully expanding overseas is Yum Brands, one of our long-time favourites....

DIAGEO PLC ADRs $80 (New York symbol DEO; Conservative Growth Portfolio, Consumer sector; ADRs outstanding: 624.5 million; Market cap: $50.0 billion; Price-to-sales ratio: 3.3; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.diageo.com) is the world’s largest premium alcoholic beverage company. Like Yum Brands, U.K.-based Diageo is another Consumer stock that gives investors a less-risky way to profit from overseas markets. In the fiscal year ended June 30, 2011, Diageo’s sales rose 1.6%, to 9.9 billion pounds from 9.8 billion pounds (1 British pound = $1.63 Canadian). Sales in markets such as Latin America and Africa rose 13%, while sales in Asia Pacific grew 9%. These gains offset slower sales in North America (up 3%) and Europe (down 3%). Diageo earned 2.1 million pounds, or 3.34 pounds per ADR (each American Depositary Receipt represents four Diageo common shares). That’s up 16.3% from 1.8 billion pounds, or 2.88 pounds per ADR, in fiscal 2010....

Retail spending continues to rise in the U.S., even with continued weakness in job and housing markets. That’s good news for these three leading department-store operators. All three should continue to benefit from the investments they have made in new stores, and in building their brands and online businesses. MACY’S INC. $30 (New York symbol M, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 420.6 million; Market cap: $12.6 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.3%; TSINetwork Rating: Average; www.macysinc.com) operates 810 Macy’s and 41 Bloomingdale’s department stores in 45 states....

WAL-MART STORES INC. $56 (New York symbol WMT; Conservative Growth Portfolio: Consumer sector; Shares outstanding: 3.5 billion; Market cap: $196.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.walmart.com) is benefitting from recent acquisitions of retailers in South Africa and the U.K. That’s helping it offset slower growth in the U.S. In the three months ended October 31, 2011, sales rose 8.1%, to $110.2 billion from $102.0 billion a year earlier. Earnings fell 2.5% to $3.5 billion from $3.6 billion, mainly because of a lower tax bill in the year-earlier quarter. Earnings per share rose 2.1%, to $0.97 from $0.95, on fewer shares outstanding. Wal-Mart is a buy.

THE BOEING CO. $63 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 743.2 million; Market cap: $46.8 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.boeing.com) has received an order from Indonesia’s Lion Air for 201 of its 737 MAX passenger jet planes and 29 of its extended-range 737 aircraft. In all, this order is worth a record $21.7 billion. If Lion Air exercises its option to buy an additional 150 planes, the order’s value would rise to $35 billion. That’s equal to roughly half of Boeing’s annual sales of $68 billion. The company will deliver these planes between 2017 and 2025. Boeing is a buy.

Many investors avoid small cap stocks, because they tend to more volatile than larger companies. You can offset this risk by sticking with small caps that are leaders in their niche markets. Here are three of our favourite small-cap stocks. However, only two are buys right now. MTS SYSTEMS CORP. $37 (Nasdaq symbol MTSC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 15.6 million; Market cap: $577.2 million; Price-to-sales ratio: 1.3; Dividend yield: 2.7%; TSINetwork Rating: Average; www.mts.com) makes equipment and software that tests materials, machines and structures. This helps manufacturers lower their costs and improve the quality of their products. MTS continues to see strong demand for its technology. New orders rose 27.5% in its 2011 fiscal year, which ended October 1, 2011, to a record $540.0 million from $423.5 million in 2010....

TENNANT CORP. $37 (New York symbol TNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 18.8 million; Market cap: $695.6 million; Price-to-sales ratio: 1.0; Dividend yield: 1.8%; TSINetwork Rating: Average; www.tennantco.com) now gets around 20% of its sales from its environmentally friendly floor scrubbers, which use electricity to make tap water act like a detergent. Thanks to strong demand for these products, Tennant’s sales rose 10.9% in the three months ended September 30, 2011, to $187.0 million from $168.6 million a year earlier. Earnings jumped 33.2%, to $9.7 million from $7.3 million. Per-share earnings rose 31.6%, to $0.50 from $0.38, on more shares outstanding. The stock has gained 20% in the past year, and now trades at a high 20.8 times the $1.93 a share Tennant will probably earn in 2011. That increases the risk of sudden drop if Tennant’s earnings growth slows, particularly if businesses put off buying new cleaning equipment because of the uncertain economy....

Encana (which focuses on natural gas) and Cenovus (which focuses on oil) took their present form in December 2009 following the breakup of the old EnCana Corp. New shale gas discoveries have pushed down gas prices. That has hurt the new Encana. Cenovus has fared better, due to stronger oil prices. We still see both as buys due to their their high-quality reserves and strong cash flows. ENCANA CORP. $18 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 735.4 million; Market cap: $13.2 billion; Price-to-sales ratio: 1.9; Dividend yield: 4.4%; TSINetwork Rating: Average; www.encana.com) has agreed to sell some of its natural gas properties in northern Texas for $975 million. The sale is part of the company’s ongoing plan to focus on its main properties in Alberta, B.C., Wyoming, Colorado and Louisiana. Including this sale, Encana will have sold $1.7 billion of properties in 2011. That’s within its original target of $1 billion to $2 billion....