recent acquisitions

DOREL INDUSTRIES, $39.80, symbol DII.B on Toronto, moved up over 8% this week after it reported improved results in the latest quarter. The company makes a wide range of products, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational products, mainly bicycles. In the three months ended December 30, 2012, Dorel’s sales rose 10.9%, to $622.6 million from $561.6 million a year earlier (all figures except share price and market cap in U.S. dollars)....

DOREL INDUSTRIES $39.73 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 31.5 million; Market cap: $1.2 billion; Dividend yield: 3.0%) makes a wide range of products, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational products, mainly bicycles.

In the three months ended December 30, 2012, Dorel’s sales rose 10.9%, to $622.6 million from $561.6 million a year earlier (all figures except share price and market cap in U.S. dollars). Excluding onetime items, earnings per share jumped 37.0%, to $0.63 from $0.46.

The home furnishing division’s revenue rose 7.5% on higher sales of imported furniture, mattresses and futons. The juvenile division’s revenue gained 11.6%, partly due to contributions from recent acquisitions, including Dorel Chile and distributors of children’s products in Colombia and Panama. Strong sales of new bicycle models helped push up the recreational/leisure division’s sales by 12.0%. Sales of the company’s premium Cannondale bicycles were particularly strong.
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NorthWest HealthCare Properties REIT, $13.36, symbol NWH.UN on Toronto (Units outstanding: 38.5 million; Market cap: $514.4 million; www.nwhp.ca), owns 77 income-producing properties, with a focus on medical office buildings. The real estate investment trust (REIT) is Canada’s largest non-government owner and operator of medical office buildings. In all, NorthWest’s properties contain about 4.6 million square feet of leasable area. The REIT’s properties are located in B.C., Alberta, Ontario, Quebec, Nova Scotia and New Brunswick. NorthWest has a 91.3% occupancy rate. The REIT first sold units to the public for $10 each and began trading on Toronto on March 25, 2010....

PLEASE NOTE: One week from today, on January 11, 2013, just after the stock market closes at 4:30 p.m. Toronto time, we will reveal our #1 Canadian Stock of 2013 to subscribers of The Successful Investor. Our #1 pick for 2012, CP Rail, has surged 54% in the past year and is still on the rise. You can be among the first to hear about our #1 Pick for 2013. Because you’re a loyal subscriber, we are happy to offer you a bargain-priced, no-risk introduction to The Successful Investor. It gives you the first month—and the 2013 Stock of the Year—FREE. But you must act now. Click here. CHEVRON CORP., $110.50, New York symbol CVX, has agreed to purchase 50% of a proposed liquefied natural gas (LNG) terminal in Kitimat, B.C., in a series of transactions. The deal includes related pipelines and gas properties in the province. The company will purchase the 30% stakes held by ENCANA CORP. $20.40, New York symbol ECA, and EOG Resources Canada Inc. Following these deals, Chevron will sell 10% to APACHE CORP., $83.20, New York symbol APA. As a result, Chevron and Apache will each own 50%....

Stella-Jones Inc., $78.15, symbol SJ on Toronto (Shares outstanding: 17.2 million; Market cap: $1.3 billion; www.stella-jones.com), makes pressure-treated wood products, including railway ties (59% of sales), utility poles (27%), lumber for industrial uses, such as construction timbers and highway guardrails (8%), and treated lumber products for the residential market (6%). The company gets most of its utility poles from timberlands it leases in Quebec, B.C. and Alberta. It also buys wood for railway ties and other products from sawmills in Canada and the U.S. Stella-Jones continues to expand in the U.S., which now provides two-thirds of its sales. In April 2010, it purchased Tangent Rail Corp. for $170 million U.S. Tangent makes railway ties at plants in Alabama, Indiana, Louisiana and Pennsylvania....

PLEASE NOTE: This is our last Hotline for 2012. Our next Hotline will go out on Friday, January 4, 2013. GOOGLE INC., $715.63, Nasdaq symbol GOOG, is selling its Motorola Home division, which makes TV set-top boxes and modems for cable companies. The company acquired this business as part of its $12.5-billion purchase of cellphone maker Motorola Mobility Holdings in May 2012. The buyer is Georgia-based Arris Group Ltd. (Nasdaq symbol ARRS). When the deal closes in the first half of 2013, Google will receive $2.05 billion in cash plus $300 million of Arris’s common shares. That will give it a 15.7% stake in Arris....

AT&T INC., $33.54, New York symbol T, plans to spend $14 billion over the next three years on upgrades to its wireless and wireline networks. That’s equal to 7% of its $190.5-billion market cap. These upgrades will expand the company’s high-speed fibre optic service to 75% of its home and business customers by the end of 2015. Replacing copper wire with fibre optic cable will also make AT&T’s high-speed Internet service faster and more reliable, and help it sign up more customers for its U-verse digital TV service. In addition, the company now says it will expand its 4G long-term evolution (LTE) wireless service to cover 300 million people in the U.S. by the end of 2014. That’s up from its current plan to reach 250 million by that time. LTE networks are up to five times faster than those in use today....

WESTJET AIRLINES LTD., $18.17, symbol WJA on Toronto, reports that its revenue rose 11.8% in the three months ended September 30, 2012, to $866.5 million from $775.3 million a year earlier. Demand for the company’s flights remains high, and it has entered into new partnerships with other airlines; these were the main reasons for the increase. WestJet’s load factor rose to a record 84.6%. Load factor is the percentage of available seats that are occupied by paying passengers. More important, the rise came despite the fact that the company increased its capacity by 2% to meet higher demand....

Cequence Energy, $1.77, symbol CQE on Toronto (Shares outstanding: 191.8 million; Market cap: $339.5 million; www.cequence-energy.com), explores for and produces oil and natural gas in Alberta and B.C. Gas makes up 87% of its daily output; the remaining 13% is oil. In the three months ended June 30, 2012, Cequence’s average daily output fell 5.1%, to 8,660 barrels of oil equivalent (including gas) from 9,125 barrels a year earlier. The company slowed production by 600 barrels per day due to low gas prices, and temporary disruptions cut its output by a further 1,300 barrels per day. The production drop and lower natural gas prices pushed down Cequence’s cash flow to $0.03 a share from $0.08....

Government Properties Income Trust, $23.64, symbol GOV on New York (Units outstanding: 47.1 million; Market cap: $1.1 billion; www.govreit.com), is a real estate investment trust (REIT) that gets about two-thirds of its revenue by leasing office space to the U.S. federal government. State governments rent another 20% of its offices, and the United Nations leases 5%. Most of the REIT’s properties are in California, Maryland, New York, Georgia, Massachusetts and Washington, D.C. In the three months ended June 30, 2012, Government Properties’ revenue rose 19.4%, to $50.3 million from $42.1 million a year earlier. Cash flow rose 15.8%, to $24.4 million from $21.0 million. Cash flow per unit was unchanged from $0.52 because the REIT issued more units to pay for recent acquisitions. These acquisitions included: two office properties located in Everett, Washington leased to the State of Washington and occupied by the Department of Social and Health Services for $20.4 million; and an office property in Albany, New York leased to the State of New York and occupied by the Department of Agriculture for $8.5 million....