snc lavalin

Watch Pat McKeough’s June 20 interview on the Business News Network “Market Call” program with Michael Hainsworth. Click here to see the interview. Or, go to www.bnn.ca and you’ll find the link on the lower right side of the page. BCE INC. $34.60, Toronto symbol BCE, should move higher next week now that the Supreme Court of Canada has ruled against a lawsuit launched by the company’s bondholders. The bondholders claimed that the takeover of BCE by a consortium headed by the Ontario Teachers’ Pension Plan would reduce the security of their investments. While this latest ruling greatly improves the chances the $42.75-a-share takeover will go through, problems in the debt markets could still prompt some of the consortium members to back out. That could force the buyers to delay, reprice or scrap the deal. If so, the stock will probably fall, but it is likely to stay above its pre-takeover level of around $30 a share....

SNC-LAVALIN INC. $58 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $8.8 billion; SI Rating: Average) earned $0.47 a share (total $70.9 million) in the first quarter of 2008, compared to a loss of $0.69 a share ($103.9 million) a year earlier. However, the year-earlier quarter included a pre-tax loss of $179.0 million stemming from the bankruptcy of a key supplier to SNC’s electrical power business. Revenue grew 38.5%, to $1.8 billion from $1.3 billion. The stock has gained 50% since January, and now trades at 36.7 times the $1.58 a share it will likely earn in 2008. That’s high considering SNC relies on public works projects, often in politically unstable areas of Africa and Asia, for much of its growth. Our high dollar also hurts the value of some of its overseas earnings. SNC-Lavalin is a hold.

SNC-Lavalin Group Inc. $46 (Toronto symbol SNC Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $6.9 billion; SI Rating: Average) earned $0.45 a share (total $69.1 million) in 2007, down 49.4% from $0.89 a share ($136.6 million) in 2006. The 2007 results included a $267.3 million pre-tax operating loss at its power division due to delays in constructing a new power plant in Brampton, Ont. Revenue rose 28.8% to $6.7 billion from $5.2 billion. SNC has also increased its quarterly dividend by a third, from $0.09 a share to $0.12. The new annual rate of $0.48 yields 1.0%. However, the stock is expensive at 29.1 times its forecast 2008 earnings of $1.58 a share, particularly for a cyclical company. SNC-Lavalin is a hold.

ARBOR MEMORIAL SERVICES INC. $34 (Toronto symbol ABO.A) earned $1.94 a share from continuing operations in the fiscal year ended October 31, 2007, up 6.6% from $1.82 in the prior year. Revenue grew 7.4%, to $229.3 million from $213.5 million. Hold. NORTEL NETWORKS CORP. $13 (Toronto symbol NT) has settled a dispute with Vonage, a U.S.-based Internet phone company. Both companies accused each other of patent infringement. The deal does not include cash payments, but the two will share certain patents. Hold. SNC-LAVALIN GROUP INC. $45 (Toronto symbol SNC) has won a contract to design a liquefied natural gas (LNG) facility in Poland. The $10.6 million value of this deal is small next to SNC’s annual revenue of over $6 billion, but could lead to more contracts as interest in LNG grows. However, at over 30 times its projected 2007 earnings, SNC is still expensive in relation to its prospects. Hold....

SNC-LAVALIN GROUP INC. $49 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $7.4 billion; SI Rating: Average) designs and builds a variety of large-scale projects, such as roads, bridges and electrical power systems. The company also has a long history of building conventional and heavy oil processing plants, as well as systems to produce difficult-to-extract heavy oil. Petroleum and chemical processing account for about 20% of SNC’s total revenue. Oil sands operators currently use natural gas to generate the steam needed to pump heavy oil to the surface. Gas accounts for up to 60% of a well’s operating costs, so many project operators are looking into alternative forms of energy such as nuclear power. SNC has plenty of experience building nuclear power stations, so it would likely participate in any future construction. SNC’s stock has gained about 80% in the past year to a new high of $49. But at 45.0 times its projected 2007 profit of $1.09 a share, it’s expensive in relation to its immediate prospects. The $0.36 dividend yields 0.7%....

The Alberta government is studying proposals to raise royalties on oil and gas developments. That could slow the expansion of the oil sands. However, at current production rates, oil sands reserves should last 200 years, so it’s unlikely higher royalties will scare off developers. As well, further increases in oil prices may more than offset higher royalties. Finning and SNC-Lavalin should continue to profit from various oil sands projects. But only one is a buy right now. FINNING INTERNATIONAL INC. $32 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 179.6 million; Market cap: $5.7 billion; SI Rating: Above average) sells and rents Caterpillar brand tractors, bulldozers and trucks....

CANADIAN IMPERIAL BANK OF COMMERCE $96 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 334.6 million; Market cap: $32.1 billion; SI Rating: Above average) earned $2.42 a share in its third fiscal quarter ended July 31, 2007, up 25.4% from $1.93 a year earlier. These figures exclude unusual items, including a $0.56 a share writedown of mortgage-backed securities in the most recent quarter. Revenue grew 7.1%, to $3.0 billion from $2.8 billion, thanks to strong growth at its retail banking and investment operations. The bank has raised its quarterly dividend 13.0%, from $0.77 a share to $0.87. The new annual rate of $3.48 yields 3.6%. CIBC is a buy....

AGRIUM INC. $46 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 134.0 million; Market cap: $6.2 billion; SI Rating: Average) owns half of a nitrogen facility in Argentina that has had to suspend operations lately due to natural gas shortages. This plant accounts for less than 10% of Agrium’s revenue, so the shutdown’s effect will be small. But costlier natural gas could hurt its profit this year. Agrium is a hold. TRANSCONTINENTAL INC. $21 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 85.4 million; Market cap: $1.8 billion; SI Rating: Average) has paid an undisclosed sum for The Oxbow Herald, a weekly newspaper in southeast Saskatchewan. It now publishes nine newspapers in Saskatchewan, reaching 65,000 households in 140 communities....

SNC-LAVALIN GROUP INC. $33 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $5.0 billion; SI Rating: Average) is a leading Canadian engineering and construction company. SNC specializes in large-scale public works projects, such as roads, bridges, transit systems and water treatment systems. It also builds chemical plants and electrical power systems. In the past few years, SNC has expanded into concessions. These are public facilities that it builds and runs on behalf of governments. SNC’s biggest concession project is its 16.77% interest in Highway 407, a toll highway just north of Toronto. Concessions give SNC predictable revenue streams, which cuts its reliance on new projects for growth. In 2006, SNC earned $0.89 a share (total $136.6 million) from continuing operations, up 29.0% from $0.69 a share ($105.6 million) a year earlier. Revenue grew 50.7%, to $5.2 billion from...

Our approach to investing focuses on high-quality companies with long histories of rising sales and earnings. From there, we classify stocks as “Conservative” or “Aggressive” depending on a variety of factors, such as the prospects of the industry it operates in and its ability to retain customers and attract new ones. We also take into account its exposure to certain regions and currencies. Here are three manufacturing companies from our Aggressive Growth Portfolio, although only two are buys right now. These stocks are still suitable for conservative investors, but we advise all investors to limit stocks like these to no more than a third of your portfolio. GENNUM CORP. $12 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.8 million; Market cap: $429.6 million; SI Rating: Above average) makes chips and other equipment that let broadcasters store, manipulate and transport video signals without losing picture quality....