recent acquisitions
QUAKER CHEMICAL CORP. $72 (New York symbol KWR; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 13.2 million; Market cap: $950.4 million; Price-to-sales ratio: 1.3; Dividend yield: 1.4%; TSINetwork Rating: Average; www.quakerchem.com) makes lubricants and chemicals that keep mechanical parts from rusting.
Quaker continues to benefit from recent acquisitions that have expanded its international operations: it now gets 60% of its sales from overseas. The company has also cut its costs and raised its prices, which has improved its profitability.
In the three months ended June 30, 2013, earnings jumped 43.5%, to $1.22 a share from $0.85 a year earlier. Without several unusual items, including a tax refund and charges related to a client’s bankruptcy, per-share earnings rose 11.1%, to $1.00 from $0.90.
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Quaker continues to benefit from recent acquisitions that have expanded its international operations: it now gets 60% of its sales from overseas. The company has also cut its costs and raised its prices, which has improved its profitability.
In the three months ended June 30, 2013, earnings jumped 43.5%, to $1.22 a share from $0.85 a year earlier. Without several unusual items, including a tax refund and charges related to a client’s bankruptcy, per-share earnings rose 11.1%, to $1.00 from $0.90.
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We include these three manufacturing companies in our Aggressive Growth Portfolio, mainly because they operate in industries that are particularly vulnerable to swings in the overall economy. Even so, all three are market leaders with strong growth prospects. They also trade at attractive multiples to earnings.
BOMBARDIER INC....
BOMBARDIER INC....
A key part of our three-part investing approach is to downplay or avoid stocks in the broker/media limelight (the other two parts are invest mainly in well-established stocks and to spread your money out across the five main economic sectors).
Stanley is a good example of an out-of-the-limelight stock....
Stanley is a good example of an out-of-the-limelight stock....
These three firms provide vital information to lenders and other financial companies. They are also leaders in their niche markets. That cuts their risk and makes it hard for new competitors to challenge them.
DUN & BRADSTREET CORP. $100 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 38.8 million; Market cap: $3.9 billion; Price-to-sales ratio: 2.6; Dividend yield: 1.6%; TSINetwork Rating: Average; www.dnb.com) is the world’s largest provider of credit reports on individual companies....
DUN & BRADSTREET CORP. $100 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 38.8 million; Market cap: $3.9 billion; Price-to-sales ratio: 2.6; Dividend yield: 1.6%; TSINetwork Rating: Average; www.dnb.com) is the world’s largest provider of credit reports on individual companies....
CANADIAN TIRE CORP. $91 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 80.5 million; Market cap: $7.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.canadiantire.ca) operates 490 Canadian Tire stores, which specialize in automotive, household and sporting goods. The company owns these outlets, but franchisees operate most of them. Canadian Tire also operates 300 gas stations and 87 PartSource auto parts stores.
In the 1990s, big U.S. retailers like Wal-Mart and Home Depot expanded to Canada. In response, Canadian Tire upgraded its stores with better signage, wider aisles and brighter lighting. These improvements also made it easier for managers to move faster-selling seasonal merchandise to high-traffic areas of the store.
The company is also trying out new formats. For example, it recently opened a smaller store in Toronto. This outlet, called Canadian Tire Express, is one-third the size of a regular Canadian Tire store and mainly features items like light bulbs and plumbing parts instead of tires and lawnmowers.
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In the 1990s, big U.S. retailers like Wal-Mart and Home Depot expanded to Canada. In response, Canadian Tire upgraded its stores with better signage, wider aisles and brighter lighting. These improvements also made it easier for managers to move faster-selling seasonal merchandise to high-traffic areas of the store.
The company is also trying out new formats. For example, it recently opened a smaller store in Toronto. This outlet, called Canadian Tire Express, is one-third the size of a regular Canadian Tire store and mainly features items like light bulbs and plumbing parts instead of tires and lawnmowers.
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BROADRIDGE FINANCIAL SOLUTIONS $30.69 (New York symbol BR; TSINetwork Rating: Extra Risk) (201-714-3000; www.broadridge.com; Shares outstanding: 121.2 million; Market cap: $3.7 billion; Dividend yield: 2.7%) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing....
We’ve long recommended Canadian Tire, even in the face of strong competition from Wal-Mart and other big U.S. retailers. That’s due to its hidden assets, which investors tend to overlook.
The company is now taking steps to unlock the value of these assets....
The company is now taking steps to unlock the value of these assets....
BROADRIDGE FINANCIAL SERVICES INC. $30 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 119.1 million; Market cap: $3.6 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.8%; TSINetwork Rating: Average; www.broadridge.com) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. The company processes 85% of all proxy votes in the U.S.
In its 2013 fiscal year, which ended June 30, 2013, Broadridge’s earnings rose 10.6%, to $236.0 million from $213.4 million in fiscal 2012. Earnings per share rose 12.6%, to $1.88 from $1.67. These figures exclude unusual items, such as writedowns and costs to integrate recent acquisitions.
Revenue rose 5.5%, to $2.4 billion from $2.3 billion. Revenue from the company’s Investor Communications division (which supplies 73% of the total) rose 7.7%. Broadridge held on to 99% of its existing customers. It also continues to do a good job of signing clients to long-term deals that generate recurring revenue.
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In its 2013 fiscal year, which ended June 30, 2013, Broadridge’s earnings rose 10.6%, to $236.0 million from $213.4 million in fiscal 2012. Earnings per share rose 12.6%, to $1.88 from $1.67. These figures exclude unusual items, such as writedowns and costs to integrate recent acquisitions.
Revenue rose 5.5%, to $2.4 billion from $2.3 billion. Revenue from the company’s Investor Communications division (which supplies 73% of the total) rose 7.7%. Broadridge held on to 99% of its existing customers. It also continues to do a good job of signing clients to long-term deals that generate recurring revenue.
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STANLEY BLACK & DECKER INC. $85 (New York symbol SWK; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 160.1 million; Market cap: $13.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.4%; TSINetwork Rating: Average; www.stanleyblackanddecker.com) began operating in 1843 and is now one of the world’s largest makers of hand and power tools for consumers. Its top-selling brands include Stanley, Black & Decker, FatMax and Powerlock. In 2012, this business supplied 51% of Stanley’s sales and 50% of its earnings.
The company also makes specialized tools for industrial users, such as auto mechanics and construction firms. This division accounts for 25% of Stanley’s sales and 29% of its earnings.
The remaining 24% of the company’s sales and 21% of its earnings come from making building-security products, such as locks, automatic doors and gates. It also monitors properties for its clients, typically by closed-circuit audio and TV systems.
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The company also makes specialized tools for industrial users, such as auto mechanics and construction firms. This division accounts for 25% of Stanley’s sales and 29% of its earnings.
The remaining 24% of the company’s sales and 21% of its earnings come from making building-security products, such as locks, automatic doors and gates. It also monitors properties for its clients, typically by closed-circuit audio and TV systems.
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BELLATRIX EXPLORATION, $7.16, symbol BXE on Toronto, continues to enter into joint ventures to speed up the development of its Cardium shale oil deposits in west-central Alberta. Under the latest agreement, Bellatrix will sell a 50% interest in its producing wells in the Ferrier and Willesden Green area to Daewoo International Corporation and Devonian Natural Resources Private Equity Fund for $52.5 million. These wells produce 268 barrels of oil equivalent per day. To put that in context, Bellatrix’s output averaged 22,102 barrels per day in the latest quarter. Following the sale, Daewoo and Devonian will invest $100 million in a multi-year program to drill 70 new wells on the Ferrier and Willesden Green properties. Bellatrix will match that spending, and the joint-venture partners will share in any new production....