price to sales ratio

MAPLE LEAF FOODS INC. $10 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 126.3 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.2; SI Rating: Average) continues to make progress with its multi-year restructuring plan. This mainly includes a shift to packaged meats under the Maple Leaf and Schneider brands, which generate higher earnings for it than fresh meats. The plan should increase Maple Leaf’s annual operating earnings (profits after regular operating costs) by $100 million by 2010. The company has now agreed to settle several class action lawsuits stemming from the listeria outbreak at its Toronto meat-processing plant. The settlement will cost it $25 million to $27 million. To put these lawsuits in perspective, Maple Leaf lost $0.10 a share (total $12.9 million) in the three months ended September 30, 2008. It earned $0.01 a share ($1.7 million) in the year-earlier quarter. If you exclude the costs to recall contaminated products and other unusual items, per-share earnings rose 116.7%, to $0.13 a share ($16.4 million) from $0.06 a share ($7.7 million). Revenue grew 3.3%, to $1.34 billion from $1.30 billion....

Our long-standing advice is to invest in well established companies and spread your funds out across the five main economic sectors: Manufacturing & Industry, Resources & Commodities, the Consumer sector, Finance and Utilities. Generally speaking, stocks in the Resources & Commodities sector and the Manufacturing & Industry sectors expose you to above-average volatility, while those in the Finance and Utilities sectors involve below-average volatility. Consumer sector stocks tend to fall in the middle. We prefer to zero in on Consumer stocks with the size and brands to overcome short-term setbacks, and succeed over the long term....

We are always happy to expand the information we provide to you, but only if it improves the ease and value of using our service. For instance, some investors base buy and sell decisions in part on p/e ratios (the ratio of a stock’s price to its per-share earnings). When we provide a p/e, we try to eliminate all one-time items from earnings. These include writedowns, investment gains or restructuring charges. This gives you a clearer, truer view of a company’s profitability. For decades, investors have used p/e’s to spot undervalued stocks. But a low p/e can signal danger rather than a bargain. Or it may point to investor uncertainty, as is the case right now with Transcontinental (see page 16). That’s why you need to look at p/e ratios in context....

GENNUM CORP. $5.69 (Toronto symbol GND, Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.6 million; Market cap: $202.6 million; Price-to-sales ratio: 1.6; SI Rating: Above average) has dropped 55.5% from $12.40 in January, 2008....

LINAMAR CORP. $3.71 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 65.1 million; Market cap: $241.5 million; Price-to-sales ratio: 0.1; SI Rating: Extra risk) gets 85% of its revenue from carmakers, and falling auto sales have hurt its earnings....

SHAWCOR LTD. $17 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.6 million; Market cap: $1.2 billion; Price-to-sales ratio: 1.0; SI Rating: Average) is down 54.7% since reaching $37.52 in June, 2008....

IGM FINANCIAL INC. $33 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 262.4 million; Market cap: $8.7 billion; Price-to-sales ratio: 3.0; SI Rating: Above average) has dropped 31.9% from $48.43 in April, 2008. IGM’s fees vary with the value of the mutual funds and other securities it manages, and lower stock prices have shrunk its assets under management....

HOME CAPITAL GROUP INC. $18 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.4 million; Market cap: $619.2 million; Price-to-sales ratio: 1.4; SI Rating: Average) specializes in residential mortgage loans to individuals that fail to meet the stricter criteria of larger, traditional lenders....

CANADIAN NATIONAL RAILWAY CO. $42 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 468.1 million; Market cap: $19.7 billion; Price-to-sales ratio: 2.3; SI Rating: Above average) is down 28.1% from $58.44 in September, 2008....

CANADIAN PACIFIC RAILWAY LTD. $39 (Toronto symbol CP, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 153.8 million; Market cap: $6.0 billion; Price-to-sales ratio: 1.2; SI Rating: Above average) is down 48.0% from $75.00 in May, 2008 on fears that falling prices for coal and agricultural products will hurt its earnings....