stanley

Exchange-traded funds (ETFs) have gained popularity in recent years, mainly because many ETFs offer very low management fees. In addition to low fees, the best ETFs offer well-diversified, highly tax-efficient portfolios. However, quality varies. The investment industry has created all sorts of ETFs. 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 five foreign ETFs we like:...

STANLEY BLACK & DECKER INC. $59 (New York symbol SWK; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 159.4 million; Market cap: $9.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.2%; WSSF Rating: Average) is the new name of The Stanley Works after the company recently completed its all-stock purchase of rival toolmaker Black & Decker Corp. Stanley shareholders own 50.5% of the combined company. Black & Decker investors own the remaining 49.5%. Stanley feels that it can find $350 million in annual savings by the end of the third year following the merger. (In 2009, Stanley earned $215.5 million, or $2.68 a share.) Most of these savings will come from combining plants, distribution networks and purchasing systems. However, big mergers like this often come with hidden risks. Stanley Black & Decker is a hold.

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, but you will quickly make these back because of the low management fees. 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....

TEMPLETON GROWTH FUND $9.39 (CWA Rating: Conservative) (Franklin Templeton Management Limited, 1 Adelaide Street East, Suite 2101, Toronto, ON. M5C 3B8. 1-800-387-0830; Web site: www.templeton.ca. Buy or sell through brokers) tries to continue the approach that paid off so well for so long under its founder and long-time manager, John Templeton. His successors aim to look for bargains, avoid fads and pay close attention to a company’s fundamentals. Templeton Growth Fund holds 38.0% of its assets in the U.S., followed by the U.K. (14.3%), Singapore (6.5%), Germany (6.0%), Switzerland (4.7%), France (4.7%), Spain (4.5%), the Netherlands (3.5%), South Korea (3.2%) and Hong Kong (2.5%). The $2.3-billion fund’s top holdings include Oracle (U.S.: software), Microsoft Corp. (U.S.: software), United Parcel Service (U.S.: package delivery), Vodafone Group (U.K.: wireless), Singapore Telecommunications, Siemens AG (Germany: electronics and electrical engineering), Kingfisher plc (U.K.: home-improvement retailer), DBS Group (Singapore: banking), Accenture plc (U.K.: consulting) and Sanofi-Aventis (Switzerland: pharmaceuticals)....

THE STANLEY WORKS $52 (New York symbol SWK, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 80.4 million; Market cap: $4.2 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.5%; WSSF Rating: Average) makes a wide variety of hand and power tools for consumer and industrial users. Top brands include Stanley, FatMax and Powerlock. Stanley has agreed to buy rival toolmaker Black & Decker Corp. (New York symbol BDK) for $4.5 billion in stock. Assuming both companies’ shareholders approve, the deal should close in the first half of 2010. Stanley shareholders will own 50.5% of the combined company (to be called Stanley Black & Decker). Black & Decker investors will own the remaining 49.5%. This looks like a good move for Stanley. Black & Decker specializes in power tools, so there’s little overlap with Stanley’s hand tools. Moreover, Black & Decker’s security products, which include door locks and keyless-entry systems, are a nice fit with Stanley’s building-security business....

Small caps are companies with a “market cap”(the value of shares they have outstanding) below $2 billion, or some other arbitrary figure. Small-cap stocks are generally more volatile than large-cap stocks. Temporary setbacks, such as a poor quarterly earnings report or the loss of a contract, can quickly cut their share prices. To cut your risk, you should focus on small caps that are market leaders, such as these four industrial companies. They’re also attractive in relation to earnings, and provide above-average dividend yields. GENUINE PARTS CO. $38 (New York symbol GPC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 159.6 million; Market cap: $6.1 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.2%; WSSF Rating: Average) distributes automotive replacement parts to over 4,800 independent stores in North America. It also owns and operates over 1,100 auto-parts stores under the NAPA banner....

THE STANLEY WORKS, $49.19, New York symbol SWK, has agreed to buy rival toolmaker Black & Decker Corp. (New York symbol BDK) for $4.5 billion in stock. That’s 12.5% more than Stanley’s $4-billion market cap. Assuming both companies’ shareholders approve, the deal should close in the first half of 2010. Stanley shareholders will own 50.5% of the combined company (to be called “Stanley Black & Decker”). Black & Decker investors will own the remaining 49.5%. This looks like a good move for Stanley. Black & Decker specializes in power tools, so there’s little overlap with Stanley’s hand tools. Moreover, Black & Decker’s security products, which include door locks and keyless-entry systems, are a nice fit with Stanley’s building-security business....

ISHARES MCSI CANADA INDEX FUND $24.64 (New York symbol EWC; buy or sell through brokers) is like a market-cap-based index fund, but its managers tinker with the index-fund formula in order to try and improve performance. They do this using their proprietary Morgan Stanley Capital International Canada Index. The fund has an MER of 0.52%. If you want to own a Canadian index fund, you should buy the iShares CDN LargeCap 60. You’ll pay about a third of the management fees. We don’t recommend iShares MCSI Canada Index.

While ETFs won’t protect you from the three costliest mistakes an investor can make, they may have a worthwhile place in your portfolio. Unlike many other innovations, ETFs don’t load you up with heavy management fees, or tie you down with heavy redemption charges if you decide to get out of them. Instead, they give you a lower-cost and more flexible and 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 them, but you will quickly make these back because of the low management fees....

There has recently been good news on the U.S. housing front: Single-family home sales jumped 7.2% in July from June. That’s the biggest month-over-month rise that the country has seen in 10 years. Sales had been rising for the previous three months, but July’s result was much higher than expected. Now, investors on both sides of the border are wondering how best to invest in a U.S. housing rebound. Some are looking to U.S. large cap stocks related to the housing sector. [ofie_ad]...