stantec

TIM HORTONS $30.52 (Toronto symbol THI; SI Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 181 million; Market cap: $5.6 billion) has opened a new coffee-and-donut shop at the Fort Knox U.S. Army base in Kentucky. The base is next to the famous gold bullion depository. This is the company’s first store on a U.S. military base; it currently operates outlets on seven Canadian bases, and a restaurant in Kandahar, Afghanistan. In total, Tim Hortons has around 3,000 locations in Canada, and more than 500 in the U.S. The Fort Knox location should help Tim Hortons expand to more U.S. military bases....

RUGGEDCOM INC., $22.98, symbol RCM on Toronto, has purchased Israel-based WiNetworks for $9.0 million U.S. WiNetworks is a privately owned company that designs WiMAX equipment. WiMAX is a telecommunications technology that can provide wireless broadband access at a distance of up to 50 kilometres from fixed stations, and five to 15 kilometres from mobile stations. In contrast, most of today’s Wi-Fi networks are limited to only 30 to 100 metres. RuggedCom makes computer-networking equipment that is used in harsh environments. The company has already developed a line of WiMAX products for use in such places....

STANTEC INC. $28.57 (Toronto symbol STN; SI Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 45.5 million; Market cap: $1.3 billion) sells a range of consulting, project delivery, design/build and technology services to clients in a number of markets. These markets include industry, environment, transportation and construction. The company has over 9,000 employees in 150 North American locations. In the three months ended June 30, 2009, Stantec’s revenue rose 13.0%, to $388.1 million from $343.3 million a year earlier. However, excluding acquisitions and foreign-exchange gains, revenue actually fell by $49.8 million. The company’s earnings rose 1.1%, to $22.4 million, or $0.49 a share, from $22.1 million, or $0.48 a share, a year earlier. Higher costs pushed down Stantec’s profit margins in the quarter....

FirstService and Stantec both continue to expand by acquiring competitors in their fragmented markets. This strategy lets companies grow steadily, but it can also add risk. FIRSTSERVICE CORP. $18.58 (Toronto symbol FSV; SI Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.1 million; Market cap: $522.3 million) operates in the following areas of the real-estate services market: commercial real estate; residential property management; and property services. FirstService has more than 17,000 employees. In the three months ended June 30, 2009, FirstService’s revenue fell 6.5%, to $425.3 million from $454.8 million a year earlier. (All figures except share price in U.S. dollars.) Earnings per share fell 17.9% to $0.46 from $0.56....

FIRSTSERVICE CORP. $11.16 (Toronto symbol FSV; SI Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.1 million; Market cap: $313.3 million) operates in the following areas of the real estate services market: commercial real estate; residential property management; and property improvement. FirstService has more than 17,000 employees worldwide. In the three months ended December 31, 2008, FirstService’s revenue fell 6.7%, to $417.9 million from $447.6 million a year earlier. (All figures except share price in U.S. dollars.) Excluding one-time items, the company lost $0.18 a share, compared to a profit of $0.49. Cash flow per share was positive, at $0.68, although it was down 38.1% from $1.10 a year earlier. A 28% drop in revenue at FirstService’s commercial real estate division held back overall revenue. However, that was partially offset by revenue gains of 15% at its residential property management division, and 35% at its property-improvement division....

MASTERS ENERGY, $1.65, Toronto symbol MSY on Toronto, jumped over 40% this week after it received a friendly $41.4-million takeover offer from ZARGON ENERGY TRUST, $13.54, symbol ZAR.UN on Toronto. To fund the purchase, Zargon plans to pay out a maximum of $5.7 million in cash. It will also issue up to 1.49 million trust units. Zargon is offering Masters shareholders a cash option and a units-plus-cash option. Under the cash option, Zargon will pay $1.83 for each Masters common share tendered until it reaches its maximum cash payout. Any remainder will be paid in Zargon units. Under the second option, each Masters common share may be exchanged for 0.12 of a Zargon unit. This option will also be pro-rated according to Zargon’s unit and cash maximums....

STANTEC INC. $25.25 (Toronto symbol STN; SI Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 45.4 million; Market cap: $1.1 billion) has signed a letter of intent to design the new terminal expansion at Edmonton International Airport. The project will increase capacity by about 50%.The expansion will add 13 new gates, additional retail, food and beverage space, while enhancing passenger flow. Airports are one of Stantec’s areas of specialization. Stantec will provide full design services, including the architectural, mechanical, electrical, structural and Leadership in Energy and Environmental Design (LEED) consulting services for the 40,000 square meters of new floor space....

CALIAN TECHNOLOGIES, $8.50, symbol CTY on Toronto, operates in two areas. The BTS division (Business and Technology Services) provides engineering, healthcare and other skilled professional personnel to clients on a contract basis. The SED division (Systems Engineering) offers a full range of hardware and software systems for testing, operating and managing satellite and other communications systems. In the three months ended September 30, 2008, Calian’s earnings rose 27.1%, to $2.7 million $0.33 a share from $2.1 million or $0.26 a share a year earlier. Cash flow per share rose 15.2%, to $0.38 from $0.33. Revenues rose 7%, to $48.9 million from $45.7 million. In the latest quarter, Business and Technology Services revenues rose 7.4%, to $33.7 million from $35.3 million. Systems Engineering revenues rose 6.1%, to $15.2 million from $14.3 million. Stronger demand for Calian’s products and services combined with more efficient project...

As I’ve said several times in the past few weeks, you can only spot a market bottom (a reversal in a falling trend in stock prices) in hindsight. Then too, a market can hit bottom, put on a healthy bounce, then go back down to the bottom once again before going on to a lasting rise. But I do feel that a lot of the risk of further decline is now out of the market. My view is that stocks are likely to move substantially higher in the next 6 months to a year, if not sooner. GOODYEAR TIRE & RUBBER CO., $7.14, symbol GT on New York, jumped earlier this week after it reported profits in the latest quarter that exceeded consensus expectations. However, the shares have since moved lower. Earnings excluding one-time items fell 43.4%, to $0.43 a share from $0.76 a share in the three months ended September 30, 2008. However, that beat the consensus expectations of $0.33 a share. Sales rose 2.1%, to $5.2 billion from $5.1 billion a year earlier....

FIRSTSERVICE CORP. $14.21 (Toronto symbol FSV; SI Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 27.9 million; Market cap: $396.5 million) operates in the expanding real estate services market, providing services in the following areas: commercial real estate; residential property management; and property improvement. The company has more than 17,000 employees. FirstService continues to expand profitably through acquisitions and internal growth. Both avenues still offer lots of potential for expansion in the fragmented service sector. Revenues rose 23.5% in the three months ended June 30, 2008, to $457.8 million from $370.5 million a year earlier. (All figures except share price in U.S. dollars.) Excluding one-time items, earnings per share rose 6.3%, to $0.51 from $0.48. Cash flow per share rose 8.2%, to $1.06 from $0.98....