stock pickers

SIERRA WIRELESS, $28.66, symbol SW on Toronto, makes modules and software that connect products, including vehicles and smart electricity meters, to the Internet. This is known as machine to machine, or more generally as the Internet of Things (IoT). The company continues to sign up clients for its new IoT Acceleration Platform, which combines cloud computing, hardware and telecommunications networks to monitor machines remotely. For example, Veolia Water Technologies UK, which provides water-treatment plants and systems to companies and municipalities around the world, is now using the IoT Acceleration Platform to help its customers monitor critical data such as flow, pressure and temperature. This cuts its clients’ labour costs and lets them respond to problems as they happen....

SHERRITT INTERNATIONAL, $0.81, symbol S on Toronto, has suspended its $0.01-a-share quarterly dividend to conserve cash. The company had previously cut its payout from $0.043 a quarter to $0.01 in early 2014. Nickel prices have fallen 32%, to $4.50 U.S. a pound, since it made that cut. The elimination of the dividend should save $12 million a year. Sherritt has also said it will cut its 2016 capital spending by as much as 25% to 35%. Earlier this year, it lowered its planned 2015 capital spending to $195 million from $210 million....

Investors often under-estimate the hidden risks of company that acquires growth by acquisition.

A growth by acquisition strategy is inherently risky....

With four producing gold mines and a fifth in the works, we view New Gold as a mining stock with appeal for more aggressive investors.

METRO INC. $35 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 245.5 million; Market cap: $8.6 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.3%; TSINetwork Rating: Average; www.metro.ca) operates 600 grocery stores and 250 drugstores in Quebec and Ontario.

The company is benefiting from the 75% of privately held bakery Première Moisson it bought last year. Metro paid $101.6 million for its stake in this business, which has 23 stores and three plants in Quebec. Rising food prices are also boosting its sales and earnings.

In its fiscal 2015 third quarter, which ended July 4, 2015, Metro’s earnings gained 13.1%, to $163.5 million from $144.5 million a year earlier. It spent $203.0 million on share buybacks in the quarter, causing earnings per share to rise at a faster pace of 18.5%, to $0.64 from $0.54.

Sales rose 6.1%, to $3.8 billion from $3.6 billion. Same store sales gained 4.3%. Metro also owns 5.7% of Alimentation Couche-Tard (Toronto symbol ATD.B), which operates convenience stores in North America, Scandinavia and Eastern Europe and is a recommendation of Stock Pickers Digest, our newsletter for aggressive investing. Due to a special charge, Metro’s share of Couche-Tard’s earnings fell to $8.7 million in the latest quarter from $9.1 million a year earlier.

The company is in a strong position to keep making acquisitions and buying back shares. Its long-term debt of $1.1 billion is a low 13% of its market cap, and it holds cash of $5.1 million. The stock trades at 17.2 times the $2.03 a share Metro will likely earn in fiscal 2015. The $0.47 dividend yields 1.3%.

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: Building on strategic acquisitions and a strong financial position, we see Metro Inc. as a top growth stock among Canada’s consumer giants.

ATLANTIC TELE-NETWORK, $73.32, symbol ATNI on Nasdaq, is raising its quarterly dividend by 10.3% with the October 2015 payment, to $0.32 from $0.29. This is the company’s 17th consecutive annual dividend hike. The shares now yield 1.8%. Atlantic owns wireless and wireline (traditional telephone and Internet) operations in the U.S. Southwest, New England, New York State, Guyana, Bermuda and parts of the Caribbean islands. The company continues to expand its wireless capacity and coverage. That’s paying off as customers use more mobile data for services like music downloads, mobile gaming and e-books....

Heavy equipment dealer Toromont Industries is profiting as strength in construction and power markets offsets weaker demand in mining.

INTACT FINANCIAL CORP., $92.14, symbol IFC on Toronto, has reached a tentative deal to offer insurance to drivers with the Uber ride-sharing service, under which passengers use a smartphone app to hire drivers who use their own personal vehicles. Intact won’t reveal further details until provincial insurance regulators sign off on the plan, but it did say it would offer the insurance under its two main brands: Intact Insurance and belairdirect. Uber says its drivers are covered by a commercial policy for up to $5 million worth of injuries and property damage. However, under Canadian law, commercial drivers must have their own insurance to cover claims incurred while transporting a passenger for profit....

As part of our three-prong approach to investing, we recommend investors spread their money out across the five main economic sectors: Manufacturing, Resources, Consumer Goods, Finance and Utilities. We also advise investing mainly in well-established companies, and downplaying stocks in the broker/media limelight. Due to recent stock market turmoil, investor interest in one of the less-volatile sectors—Consumer Goods—is rising. That includes the three Canadian retailers we analyze below. All are profiting from recent acquisitions, while their upgraded stores are attracting more shoppers. They’re also rolling out effective loyalty programs that spur repeat visits....