stanley

TEMPLETON GROWTH FUND $12.94 (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) is invested 33.5% in the U.S., 14.4% in the UK, 8% in the Netherlands, 7% in Japan, 5.4% in Spain, 3.8% in Singapore, 3.8% in Switzerland, 3.1% in Germany and 2.8% in Hong Kong. The fund’s top holdings include Banco Santander Central Hispano SA (Spanish bank), Royal Dutch Shell (Netherlands oil & gas), Koninklijke Philips Electronics NV (Netherlands consumer electronic & electrical products), Cheung Kong Holdings (Hong Kong conglomerate), GlaxoSmithKline plc (UK pharmaceutical), Repsol YPF SA (Spanish oil & gas), Unilever NV (global packaged consumer goods), Merck & Co. Inc. (U.S. pharmaceuticals), ING Groep NV (Dutch financial services) and DBS Group Holdings (Singapore-based banking). The fund made 19.4% over the last year, compared to a gain of 20.5% for the benchmark Morgan Stanley Index. The fund’s MER is 2.35%....

AIC AMERICAN ADVANTAGE FUND $8.21 (CWA Rating: Aggressive) (AIC Group of Funds, 1375 Kerns Road, Burlington, Ont., L7R 4X8, 1-800-263-2144; Web site: www.aicfunds.com. Buy or sell through brokers) invests mostly in U.S. stocks, with over 99% of assets in the financial services area. This segment breaks down as follows: Investment banking & brokerage, 14.2%; Multi-line insurance, 13.5%; Property & casualty insurance companies, 12.9%; Life & health insurance, 12.6%; Diversified banks, 10.4%; Insurance brokers, 8.0%; Regional banks, 7.9%; Diversified financials, 7.3%; Wealth management, 6.1%; Consumer finance, 2.8%; Thrifts & mortgage finance, 2.3%; and Conglomerates, 1.2%. The $119.3 million AIC American Advantage’s top 10 holdings are Progressive Corp., ING Canada, AFLAC, Morgan Stanley, Hartford Financial Services, TD Bank, Northern Trust, Merrill Lynch, JP Morgan Chase and Willis Group Holdings. This fund holds just 18 stocks....

These two AIC funds hold much of their portfolios in financial services stocks. We prefer diversified funds. But if you must focus on something, finance is a relatively stable sector. If you do invest in these funds, be sure to adjust the rest of your portfolio so they won’t overly concentrate your stock and mutual fund holdings in the financial sector. AIC AMERICAN ADVANTAGE FUND $8.21 (CWA Rating: Aggressive) (AIC Group of Funds, 1375 Kerns Road, Burlington, Ont., L7R 4X8, 1-800-263-2144; Web site: www.aicfunds.com. Buy or sell through brokers) invests mostly in U.S. stocks, with over 99% of assets in the financial services area....

THE STANLEY WORKS $50 (New York symbol SWK; Conservative Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) makes a wide variety of hand and power tools for professionals and consumers. In the past four years, Stanley has shifted its focus away from cyclical consumer products to industrial products and building security systems, which have steadier revenue streams. Consumer products now account for about 30% of its revenue and profit, down from 40% four years earlier. Focusing on industrial products also cuts Stanley’s reliance on big retail chains such as Home Depot....

These three well-managed industrial companies have come under pressure in the past few months, as rising costs for fuel, metals, plastics and labor have slowed their earnings growth. But they own some of the best-known brands in their fields, and they are all doing a good job cutting costs. Some like Stanley Works are taking advantage of the recent weakness in the manufacturing sector to make acquisitions. We like the long-term prospects of all three, but see only one as a buy right now....

TEMPLETON GROWTH FUND $11.36 (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) is invested 28.4% in the U.S., 14.2% in the UK, 9.5% in Japan, 9.3% in the Netherlands, 4.8% in Spain, 3.8% in Switzerland, 3.7% in Canada and 3.4% in Germany. The fund’s top holdings include Royal Dutch Shell (Netherlands oil & gas), Koninklijke Philips Electronics NV (Netherlands consumer electronic & electrical products), Cheung Kong Holdings (Hong Kong conglomerate), Sony Corp. (Japanese electronics), Akzo Nobel (healthcare & chemicals), BP plc (UK oil & gas and chemicals), and ING Groep NV (Dutch financial services). The fund made 6.2% over the last year, compared to a gain of 5.4% for the benchmark Morgan Stanley Index. The fund’s MER is 2.35%....

FORD MOTOR CO. $8 is taking steps to survive today’s disastrous car market. It cut its dividend in half (but it still yields 2.5%), and it is cutting production by 20%. Ford could raise cash by selling assets such as its luxury brands. When the car market improves, Ford’s high sales (now around $95 a share) provide a lot of leverage for improved earnings. That’s why we see it as a hold. H.J. HEINZ CO. $41 seems to have fended off a proxy challenge from billionaire investor Nelson Peltz. That will make it easier for Heinz to implement its own restructuring plan, but ongoing pressure from Peltz should continue to push the stock higher. Buy. BANK OF AMERICA $52 has raised its dividend 12.0%, from $2.00 a share to $2.24. It now yields 4.3%. Best Buy....

BARNES & NOBLE INC. $34 (New York symbol BKS; Aggressive Growth Portfolio, Consumer sector; WSSF Rating: Average) fell 5% after an investor sued it, alleging the company improperly issued stock options to its top executives. The SEC is now conducting an informal probe into Barnes & Noble’s stock options policy and procedures. We’ll have more to say as information becomes available. For now, we see the stock as a buy. INTEL CORP. $18 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Above average) plans to invest $600 million in Clearwire Corp., which specializes in high-speed wireless data networks. The price is equal to 68% of the $885 million or $0.15 a share that Intel earned in the second quarter of 2006....

IVY EUROPEAN FUND $11.72 (CWA Rating: Aggressive) holds mostly good quality stocks, although it has underperformed the benchmark Morgan Stanley indexes. We don’t see any reason to hold a mutual fund that concentrates in Europe. If you want European exposure, consider Ivy Foreign Equity Fund, or the closed-end European Equity Fund....

IVY FOREIGN EQUITY FUND $26.03 (CWA Rating: Conservative) outperformed the Morgan Stanley benchmark international index over the last 10 years. The fund gained 8.0%, and that was better than the Morgan Stanley benchmark’s gain of 5.7%. Ivy Foreign Equity Fund made 5.1% over the last year. The fund invests in companies based outside of Canada, but cuts risk by avoiding direct investment in emerging markets. Ivy Foreign Equity is one of our top foreign fund recommendations. Still, we think non-U.S. international funds should make up at most perhaps 10% of the holdings of a conservative investor. The fund’s top 10 holdings are Reckitt Benckister plc (UK household & healthcare products), Brown & Brown (U.S. insurance), Danaher Corp. (U.S. control products and tools), Essilor International SA (corrective eyewear), Henry Schein Inc., (U.S. healthcare), PepsiCo (U.S. food & beverage), William Demant (hearing health products), Omnicom (U.S. media services), Diageo plc (UK alcoholic drinks) and Ecolab Inc. (U.S. maintenance & cleaning products)....