stanley

CGI GROUP INC. $20 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.9 million; Market cap: $5.2 billion; Price-to-sales ratio: 1.2; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) is Canada’s largest provider of computer outsourcing services. It also operates in 15 other countries. Canada and the U.S. each accounted for 47% of its revenue in the latest fiscal year; Europe and Asia supplied the remaining 6%.

The company often uses acquisitions to fuel its growth. It cuts the risk of this strategy by focusing on smaller companies that enhance its products or expand its geographic reach.

Big purchase starting to pay off

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CGI GROUP INC. (Toronto symbol GIB.A; www.cgi.com) is Canada’s largest provider of computer outsourcing services. It also operates in 15 other countries. Canada and the U.S. each accounted for 47% of its revenue in the latest fiscal year; Europe and Asia supplied the remaining 6%. The company often uses acquisitions to fuel its growth. CGI’s most important purchase in the past few years was its $932.2-million acquisition of Stanley Inc. in September 2010. Stanley provides computer outsourcing services to military and civilian agencies of the U.S. government....

CGI GROUP INC. $20 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.9 million; Market cap: $5.2 billion; Price-to-sales ratio: 1.2; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) is Canada’s largest provider of computer outsourcing services. It also operates in 15 other countries. Canada and the U.S. each accounted for 47% of its revenue in the latest fiscal year; Europe and Asia supplied the remaining 6%. The company often uses acquisitions to fuel its growth. It cuts the risk of this strategy by focusing on smaller companies that enhance its products or expand its geographic reach.

Big purchase starting to pay off

...

Our view is that virtually all Canadian investors should have 20% to 30% of their portfolios in U.S. stocks, like the ones we recommend in Wall Street Stock Forecaster. We feel now is a good time to hold high-quality U.S. stocks, and we see U.S. dollar exposure as a plus—a valuable form of diversification. Another option is to add some foreign exchange traded funds (ETFs), such as those we recommend in Canadian Wealth Advisor, to your portfolio in reasonable quantities, perhaps 10% of your holdings if you are a conservative investor (including 5% or so in higher-risk funds, such as emerging market ETFs)....

Exchange traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders....

Stanley Black & Decker, $62.13, symbol SWK on New York (Shares outstanding: 168.9 million; Market cap: $10.5 billion; www.stanleyblackanddecker.com), is a recommendation of our Wall Street Stock Forecaster newsletter. Stanley Black & Decker is one of the world’s largest makers of hand and power tools for consumers. The company mainly sells its tools through home-improvement retailers like Home Depot. Its top-selling brands include Stanley, Black & Decker, FatMax and Powerlock. The company’s building-security division makes locks, automatic doors and gates. It also monitors properties for its clients, typically by closed-circuit audio and TV systems. In addition, Stanley sells specialized tools to industrial users, such as auto mechanics and construction firms....

TRANSCANADA CORP., $40.81, Toronto symbol TRP, fell 4% this week after the U.S. State Department said it wants the company to re-route its proposed Keystone XL oil pipeline around underground water tables in Nebraska. Keystone XL will pump oil from oil-sands projects in Alberta through Oklahoma to refineries on the U.S. Gulf Coast. TransCanada had hoped to receive final approval for the project by the end of 2011, but finding an acceptable new route will take around 18 months. These delays would add to Keystone XL’s $7-billion U.S. cost, and might prompt oil shippers and refineries to cancel their commitments....

Exchange-traded funds (ETFs) offer very low management fees. As well, the best ETFs offer well-diversified, tax-efficient portfolios of high-quality stocks. However, the quality of ETFs varies widely. All too many exist to tap into popular, but risky, themes and fads. So you need to be highly selective with your ETF holdings. Here are six foreign ETFs we like:...

INTERNATIONAL BUSINESS MACHINES CORP., $181.63, New York symbol IBM, reported higher-than-expected earnings for the latest quarter. However, the computer maker’s revenue fell short of expectations. That caused the stock to fall 5% this week. In the three months ended September 30, 2011, IBM earned $3.8 billion. That’s up 7.0% from $3.6 billion a year earlier. The company spent $3.4 billion on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share rose 13.1%, to $3.19 from $2.82. If you exclude unusual items, mainly costs to integrate acquisitions, IBM’s earnings per share would have risen 15.1%, to $3.28 from $2.85. On this basis, the latest earnings beat the consensus estimate of $3.22 a share. Revenue rose 7.8%, to $26.2 billion from $24.3 billion. That was less than the consensus estimate of $26.3 billion. If you exclude the positive impact of foreign-exchange rates, revenue would have risen 3%....

Exchange-traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital-gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders. Below, we update our advice on six ETFs — five buys and one we don’t recommend....