SAP

We think conservative investors could hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus. The best ETFs offer very low management fees and well-diversified, tax-efficient portfolios of high-quality stocks. Here a look at six global ETFs:...

PLEASE NOTE: Our next Hotline will go out on Friday, April 25, 2014. POTASH CORP. OF SASKATCHEWAN, $38.45, Toronto symbol POT, rose 5% this week on speculation that BHP Billiton (New York symbol BHP) may launch a second takeover offer for the company. (BHP is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks.) In 2010, BHP offered to buy Potash Corp. for $43.33 U.S. a share (adjusted for a 3-for-1 stock split in February 2011). However, Ottawa ultimately blocked the takeover, as it did not provide a “net benefit” to Canada under the Investment Canada Act....

SAPUTO INC. $56 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 194.8 million; Market cap: $10.9 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) now owns 87.92% of Warrnambool Cheese and Butter Factory, an Australian producer of milk, cheese, butter and other dairy products. Saputo recently launched a takeover offer for 100% of this company, but Japanese beverage maker Kirin Holdings decided to hang on to its 10% stake.

Meanwhile, Warrnambool reported that its earnings jumped 102.0% in the first half of its current fiscal year from the same period a year earlier. That’s mainly because China is importing more dairy products to meet rising domestic demand.

Saputo trades at a somewhat high 18.8 times the $2.98 a share it will probably earn in the year ending March 31, 2014.
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PRECISION DRILLING CORP., $12.89, Toronto symbol PD, announced two new contracts this week. The first is a multi-year deal with a client in the Middle East to build a Super Triple drilling rig, which can reach deeper pockets of oil and natural gas than Precision’s regular rigs. The company will deliver this rig in the fourth quarter of 2014. The second is a multi-year contract to supply six rigs to a project in Mexico....

SAPUTO INC. $56 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 194.8 million; Market cap: $10.9 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) now owns 87.92% of Warrnambool Cheese and Butter Factory, an Australian producer of milk, cheese, butter and other dairy products....

SAPUTO INC. $53 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 194.3 million; Market cap: $10.3 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.6%; TSINetwork Rating: Average; www.saputo.com) now owns 78.9% of Warrnambool Cheese and Butter Factory, an Australian producer of milk, cheese, butter and other dairy products....

ISHARES MSCI GERMANY FUND $30.82 (New York Exchange symbol EWG; buy or sell through brokers) tracks the stocks in the MSCI Germany Index.

This index aims to replicate 85% of the total market capitalization of the German stock market. The remaining 15% is unavailable for investment, partly due to limitations on foreign ownership.

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PLEASE NOTE: One week from today, on January 24, 2014, shortly after the stock market closes at 4:00 p.m. Toronto time, we will reveal our #1 Aggressive Stock of 2014 to subscribers of Stock Pickers Digest. You can be among the first to hear about our #1 pick for 2014. Because you’re a loyal subscriber, we are happy to offer you a bargain-priced, no-risk introduction to Stock Pickers Digest. It gives you the first month—and the 2014 Stock of the Year—FREE. But you must act now. Click here. CAE INC., $14.10, Toronto symbol CAE, is our Stock of the Year for 2014. This is CAE’s third time as our #1 pick. It was our Stock of the Year in 2000, when it gained 130.0% for us. We picked it again for 2002, but 9/11 hurt air travel much more than we expected. Fuel prices also moved up, the economy weakened, and CAE dropped 54.2% that year....

We think conservative investors could hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus.

The best ETFs offer very low management fees and well-diversified, tax-efficient portfolios of highquality stocks.

Here are six international ETFs we like:

ISHARES MSCI JAPAN INDEX FUND $12.04 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an exchange traded fund that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.

The ETF’s top holdings include Toyota, 6.1%; Mitsubishi UFJ Financial, 3.1%; Softbank Corp., 3.0%; Honda Motor, 2.5%; Sumitomo Mitsui Financial, 2.4%; Mizuho Financial Group, 1.8%; Hitachi, 1.4%; Takeda Pharmaceutical, 1.3%; Canon, 1.3%; and Mitsubishi Estate Co., 1.3%.

The fund’s industry breakdown is as follows: Financials, 21.5%; Consumer Discretionary, 20.9%; Industrials, 19.3%; Information Technology, 10.4%; Consumer Staples, 6.3%; Health Care, 6.0%; Materials, 5.9%; Telecommunication Services, 5.8%; Utilities, 2.5%; and Energy, 1.2%.

iShares MSCI Japan Index Fund was launched on March 12, 1996....

CGI GROUP INC., $34.96, Toronto symbol GIB.A, is Canada’s largest provider of computer outsourcing services. It 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. The company is the lead contractor for the Healthcare.gov website, which lets Americans shop for health insurance plans under the Affordable Care Act (or Obamacare). Since the site began operating on October 1, 2013, visitors have had trouble logging on and evaluating the various health plans. As a result, fewer users than expected have signed up. These problems have prompted Massachusetts and Vermont to withhold scheduled payments to CGI. Other states may do the same or demand refunds. That’s mainly why the stock is down 7% in the past week....