public offering

SNC-LAVALIN GROUP INC. $47 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.8 million; Market cap: $7.1 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.0%; TSINetwork Rating: Average; www.snclavalin.com) is a leading Canadian engineering and construction company that specializes in large-scale public works projects, such as roads, bridges, transit systems and watertreatment plants....

CANADIAN TIRE CORP. $98 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 80.2 million; Market cap: $7.9 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www. canadiantire.ca) recently sold 16.9% of CT Real Estate Investment Trust (Toronto symbol CRT.UN) through an initial public offering. CT REIT holds 72% of Canadian Tire’s real estate assets, including 255 stores and one distribution centre. The company received $279.3 million for these shares.

Meanwhile, Canadian Tire earned $145.5 million in the three months ended September 28, 2013, up 10.7% from $131.4 million a year earlier. Earnings per share gained 11.2%, to $1.79 from $1.61, on fewer shares outstanding. Sales rose 4.5%, to $3.0 billion from $2.8 billion.

Strong demand for automotive and kitchen products pushed up same-store sales by 2.0% at the company’s 491 Canadian Tire stores. Same-store sales rose 6.3% at its 415 sports outlets, partly due to the Pro Hockey Life chain, acquired in August 2013. Same-store sales at the 386-store Mark’s clothing chain gained 4.3%.
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These two retailers recently set up their land and buildings as real estate investment trusts (REITs). That’s helping them fund acquisitions to better compete with U.S. retailers like Wal-Mart and Target, which are expanding in Canada.

LOBLAW COMPANIES LTD....

GENERAL ELECTRIC CO. $27 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.2 billion; Market cap: $275.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.ge.com) plans to spin off its North American retail finance business as a separate company. This business, part of its GE Capital subsidiary, provides credit card loans through a variety of retailers, such as Wal-Mart and J.C. Penney. It also loans money directly to consumers. GE will hang on the international portion of the retail finance business. The spinoff is part of the company’s plan to cut GE Capital’s assets to half of what they were prior to the 2008 financial crisis....

GENERAL ELECTRIC CO. $27 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.2 billion; Market cap: $275.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.ge.com) plans to spin off its North American retail finance business as a separate company.

This business, part of its GE Capital subsidiary, provides credit card loans through a variety of retailers, such as Wal-Mart and J.C. Penney. It also loans money directly to consumers. GE will hang on the international portion of the retail finance business.

The spinoff is part of the company’s plan to cut GE Capital’s assets to half of what they were prior to the 2008 financial crisis.

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SONY CORP. ADRs, $20.15, New York symbol SNE, fell 7% this week after the company rejected a plan from Dan Loeb, an activist investor who owns about 7% of Sony’s shares. Loeb wants Sony to sell 15% to 20% of its entertainment division through an initial public offering. This business, which makes movies, television programs and music recordings, accounts for about 16% of Sony’s revenue. However, the company feels that owning entertainment content gives it an edge over other electronics makers. Moreover, Sony is making more movies and TV shows in partnership with other studios, which should cut the entertainment business’s costs and improve its profits....

Please note: The next issue of Wall Street Stock Forecaster will be sent out on Friday, May 31, 2013. SONY CORP. ADRs, $20.34, New York symbol SNE, jumped 14% this week after Dan Loeb, an activist investor who owns 6.3% of Sony’s shares, announced a plan aimed at unlocking some of the company’s value. Loeb is the same investor who pressed Yahoo! Inc. (Nasdaq symbol YHOO) to replace its chief executive officer with Marissa Mayer, a former vice-president at Google (see below). Loeb’s plan involves sell 15% to 20% of Sony’s entertainment division through an initial public offering. This division, which makes movies, television programs and music recordings, supplied just 17% of Sony’s revenue in the fiscal year ended March 31, 2013. But due to large losses at Sony’s TV and cellphone divisions, the entertainment business accounted for a high 45% of the company’s earnings....

CGI GROUP INC., $31.31, Toronto symbol GIB.A, jumped 15% this week after the company reported much better-than-expected quarterly results. CGI is Canada’s largest provider of computer outsourcing services. The company helps its clients automate certain routine functions, like accounting and buying supplies. That makes companies more efficient and lets them focus on their main businesses. In August 2012, CGI completed its $2.7-billion purchase of Logica plc, a U.K.-based firm that provides computer-outsourcing services in 36 countries....

DUNDEE REIT, $38.84, symbol D.UN on Toronto, has announced plans to sell its portfolio of 86 industrial properties to a new trust called Dundee Industrial REIT. These buildings contain 6.6 million square feet of leasable space. No price has yet been set for the properties. Dundee Industrial REIT will pay for the properties by selling shares to the public through an initial public offering. The trust is selling off these holdings as part of its plan to focus entirely on office buildings. However, it does plan to retain an as-yet-unspecified interest in Dundee Industrial REIT after the share sale. That will let it continue to benefit from these properties’ future growth....

Argent Energy Trust, $10.00, symbol AET.UN on Toronto (Units outstanding: 21.8 million; Market cap: $218.0 million; www.argentenergytrust.ca), aims to acquire and develop oil and natural gas properties, mainly in the U.S. The trust began trading on the Toronto exchange on August 10, 2012, at $10 per unit. Argent’s public offering raised $212.3 million, which was scaled back from its original $325-million proposal. Due to low oil prices, investor interest in the trust’s offering was not as strong as originally anticipated....