SAP

CANADIAN PACIFIC RAILWAY LTD., $73.54, Toronto symbol CP, has resumed normal operations now that Ottawa has ended an eight-day strike by its locomotive engineers, conductors and yard workers. The strike probably cut CP’s earnings per share by around $0.20 in the second quarter of 2012. The company earned $0.82 a share in the first quarter. At CP’s recent annual meeting, U.S.-based activist investment firm Pershing Square Capital Management, which owns 14.2% of the company, succeeded in replacing seven of CP’s 16 directors with its own nominees....

SAPUTO INC. $44 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 199.2 million; Market cap: $8.8 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products, including milk, butter and cheese. It also makes snack cakes and tarts. The company operates in the U.S., Argentina and Europe.

In its fiscal 2012 third quarter, which ended December 31, 2011, Saputo’s earnings rose 15.8%, to $129.8 million from $112.1 million a year earlier. Earnings per share rose 18.5%, to $0.64 from $0.54, on fewer shares outstanding. Sales rose 17.1%, to $1.8 billion from $1.5 billion.

These gains mainly reflect the contribution of DCI Cheese, a specialty cheese distributor in the U.S., which Saputo bought for $270.5 million in March 2011. Higher selling prices for cheese in Canada and Argentina also contributed to the sales increase. However, the milk pricing formula in California recently changed; that’s hurting profit margins at Saputo’s U.S. operations.

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SAPUTO INC. $44 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 199.2 million; Market cap: $8.8 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products, including milk, butter and cheese. It also makes snack cakes and tarts. The company operates in the U.S., Argentina and Europe. In its fiscal 2012 third quarter, which ended December 31, 2011, Saputo’s earnings rose 15.8%, to $129.8 million from $112.1 million a year earlier. Earnings per share rose 18.5%, to $0.64 from $0.54, on fewer shares outstanding. Sales rose 17.1%, to $1.8 billion from $1.5 billion. These gains mainly reflect the contribution of DCI Cheese, a specialty cheese distributor in the U.S., which Saputo bought for $270.5 million in March 2011. Higher selling prices for cheese in Canada and Argentina also contributed to the sales increase. However, the milk pricing formula in California recently changed; that’s hurting profit margins at Saputo’s U.S. operations....

ISHARES MSCI GERMANY FUND $22.95 (New York Exchange symbol EWG; buy or sell through brokers) is an ETF that aims to track 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.

The fund’s top holdings are Siemens AG (engineering conglomerate), 9.2%; BASF (chemicals), 8.9%; SAP (software), 6.9%; Bayer (diversified chemicals), 6.4%; Daimler AG (automobiles), 6.4%; Allianz (insurance), 6.2%; Deutsche Bank AG, 4.9%; E.ON (energy), 4.6%; Deutsche Telekom, 3.7%; and BMW AG (automobiles), 3.5%.

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Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice on a wide range of topics, including the best strategies to use in international stock markets. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “There are 3 convenient ways to invest in foreign growth without getting out of your comfort zone.”...

Exchange-traded funds (ETFs) offer very low management fees. As well, the best ETFs offer well-diversified, tax-efficient portfolios of high-quality stocks. We think conservative investors could hold up to, say, 10% of their portfolios in foreign stocks. You need to be highly selective with your ETF selections, but they’re a great way to hold those stocks. Here are six foreign ETFs we like:...

CANADIAN TIRE CORP., $65.95, Toronto symbol CTC.A, rose 3% this week after the retailer reported better-than-expected earnings. In 2011, the company earned $467.0 million, or $5.71 a share. That beat the consensus estimate of $5.43 a share. The latest earnings are also up 5.2% from $444.2 million, or $5.42 a share, in 2010. Sales in 2011 rose 12.7%, to $10.4 billion from $9.2 billion in 2010. That’s largely due to the company’s August 2011 purchase of The Forzani Group Ltd., which sells sporting goods through over 500 stores in Canada, including SportChek and Athlete’s World. If you exclude the cash held by Forzani, Canadian Tire paid $739.9 million for this acquisition....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific advice and insights, such as how we select our top stock picks. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Use our TSINetwork rating system to pick winning stocks.”...

SAPUTO INC. $39 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 200.6 million; Market cap: $7.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.9%; TSINetwork Rating: Average; www.saputo.com) earned $127.1 million in its 2012 second quarter, which ended September 30, 2011. That’s up 1.0% from $125.8 million a year earlier. Earnings per share rose 1.7%, to $0.61 from $0.60, on fewer shares outstanding.

Sales rose 15.5%, to $1.8 billion from $1.55 billion. That mainly reflects the contribution of DCI Cheese Co. Inc., which Saputo bought for $270.5 million in March 2011. DCI distributes specialty cheeses in the U.S. However, Saputo’s Canadian sales volumes are falling. As well, new regulations will force the company to use more full-fat milk in its Canadian cheese products instead of milk solids. That will increase its costs.

Saputo is a hold.

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SAPUTO INC. $39 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 200.6 million; Market cap: $7.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.9%; TSINetwork Rating: Average; www.saputo.com) earned $127.1 million in its 2012 second quarter, which ended September 30, 2011. That’s up 1.0% from $125.8 million a year earlier. Earnings per share rose 1.7%, to $0.61 from $0.60, on fewer shares outstanding. Sales rose 15.5%, to $1.8 billion from $1.55 billion. That mainly reflects the contribution of DCI Cheese Co. Inc., which Saputo bought for $270.5 million in March 2011. DCI distributes specialty cheeses in the U.S. However, Saputo’s Canadian sales volumes are falling. As well, new regulations will force the company to use more full-fat milk in its Canadian cheese products instead of milk solids. That will increase its costs. Saputo is a hold.