snc lavalin

RIOCAN REAL ESTATE INVESTMENT TRUST $27(www.riocan.com) is raising its monthly distribution by 2.2% with the January 2013 payment, to $0.1175 a unit from $0.115. The new annual rate of $1.41 yields 5.2%. This is the first increase since 2008. Buy.

SNC-LAVALIN GROUP INC....

SNC-LAVALIN GROUP INC., $39.40, Toronto symbol SNC, fell 5% this week in response to the arrest of Pierre Duhaime, the company’s former chief executive officer. The charges relate to possible illegal payments that SNC may have paid to secure a contract to build the new McGill University Health Centre in Montreal. The company and its partners won this deal in April 2010 under a public-private partnership with the Quebec government. It’s unclear if these payments are related to the $56 million U.S. in unusual payments to agents that SNC discovered in March 2012. To put that in context, SNC earned $378.8 million (Canadian), or $2.49 a share, in 2011. This situation prompted Mr. Duhaime to step down as CEO and a director of the company. SNC also fired other executives....

TELUS CORP., Toronto symbols T $62.71 and T.A $61.52, has paid an undisclosed sum for KinLogix. This Quebec-based private company makes software that lets medical professionals store patient records on remote server computers. KinLogix already serves over 200 clinics and accounts for 36% of Quebec’s electronic medical records market. Telus’s health care-related operations are much smaller than its main wireless and regular telephone divisions. However, demand for reliable electronic record storage is growing steadily. Telus’s strong reputation should help KinLogix attract more clients....

CAE INC. $10 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.7 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.0%; TSINetwork Rating: Average; www.cae.com) recently sold six flight simulators and related equipment. In all, these deals are worth $85 million, or 5% of CAE’s annual revenue of $1.8 billion. The company has now sold 16 simulators in its 2013 fiscal year, which began on April 1, 2012. CAE sold 37 simulators in all of fiscal 2012. CAE is a buy. IGM FINANCIAL INC. $37 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares out- standing: 255.1 million; Market cap: $9.4 billion; Price-to-sales ratio: 3.6; Dividend yield: 5.8%; TSINetwork Rating: Above Average; www.igmfinancial.com) reports that it had $119.7 billion of assets under management, including mutual fund assets, as of September 30, 2012. That’s an increase of 2.5% from $116.7 billion a year earlier....

SNC-LAVALIN GROUP INC. $38 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $5.7 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.snclavalin.com) is facing a class-action lawsuit over $56 million U.S. in unusual payments to agents it hired to secure certain construction contracts. The stock fell nearly 20% when the company disclosed these payments in March 2012. The news also prompted SNC’s chief executive officer to quit.

These payments are small next to the $378.8 million (Canadian), or $2.49 a share, that SNC earned in 2011. But even so, the lawsuit is seeking $1 billion in damages. However, lawsuits like this are difficult to prove. Moreover, it would probably take years for the case to come to court.

The matter has had little impact on SNC’s ability to win new contracts. For example, the B.C. government has selected a consortium headed by SNC to design and build an 11-kilometre light-rail rapid transit line near Vancouver.

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RESEARCH IN MOTION LTD., $7.52, Toronto symbol RIM, jumped 20% this week, mainly because the company reported a lower-than-expected loss in its latest quarter. Its revenue was also higher than the consensus estimate. In its fiscal 2013 second quarter, which ended September 1, 2012, RIM lost $235 million, or $0.45 a share (all amounts except share price in U.S. dollars). The latest results include a $93-million (after-tax) charge related to RIM’s restructuring plan, which includes laying off 30% of its workforce and simplifying its product lines. Without these costs, the company would have lost $0.27 a share in the latest quarter. That’s much better that consensus estimate of a $0.47-a-share loss. A year earlier, RIM earned $329 million, or $0.63 a share....

SNC-Lavalin, $35.89, symbol SNC on Toronto (Shares outstanding: 151.0 million; Market cap: $5.4 billion; www.snclavalin.com), has come under pressure in the past few months over $56 million U.S. in unusual payments. The company paid these funds to agents it hired to secure certain construction contracts. However, these payments are small next to SNC’s profits: the company earned $378.8 million (Canadian), or $2.49 a share, in 2011. Moreover, this matter has had little impact on SNC’s ability to win new engineering contracts. For example, the company recently signed a deal with Norway’s Statoil ASA to design part of the underwater structure for a new offshore oil project in the North Sea. SNC didn’t say how much this contract is worth. However, its expertise should help it secure similar agreements in this region....

SNC-LAVALIN GROUP INC. $37 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $5.6 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.4%; TSINetwork Rating: Average; www.snclavalin.com) earned $32.5 million, or $0.21 a share, in the three months ended June 30, 2012. That’s down 68.2%, from $102.2 million, or $0.67 a share, a year earlier. The company spent $50 million more than it expected on a power plant in Tunisia and a petrochemical plant in Russia. That was the main reason for the lower earnings.

The stock has also come under pressure in the past few months over $56 million U.S. in unusual payments that the company made to agents it hired to secure certain construction contracts. However, this matter has had little impact on SNC’s ability to win new engineering deals: revenue rose 14.2% in the quarter, to $1.9 billion from $1.7 billion.

SNC-Lavalin is a buy.

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AGRIUM INC., $98.86, Toronto symbol AGU, rose 2% this week on news that activist investment firm Jana Partners LLC now owns roughly 4% of Agrium’s stock. This is the same company that pressured McGraw-Hill (New York symbol MHP) to split itself into two new firms: one that will produce financial-information products and one that will publish textbooks for colleges and schools. McGraw-Hill is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks. Jana now wants Agrium to spin off its retail division as a separate company. These stores sell seed, fertilizer and other products to farmers. They also supply two-thirds of Agrium’s revenue and half of its earnings....

SNC-LAVALIN GROUP INC. $37 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $5.6 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.4%; TSINetwork Rating: Average; www.snclavalin.com) earned $32.5 million, or $0.21 a share, in the three months ended June 30, 2012. That’s down 68.2%, from $102.2 million, or $0.67 a share, a year earlier. The company spent $50 million more than it expected on a power plant in Tunisia and a petrochemical plant in Russia. That was the main reason for the lower earnings. The stock has also come under pressure in the past few months over $56 million U.S. in unusual payments that the company made to agents it hired to secure certain construction contracts. However, this matter has had little impact on SNC’s ability to win new engineering deals: revenue rose 14.2% in the quarter, to $1.9 billion from $1.7 billion. SNC-Lavalin is a buy.