stock pickers

A reputation for friendlier service, lower fuel costs and 41 consecutive profitable quarters help make WestJet one of our top value stocks.

ALIMENTATION COUCHE-TARD INC., $59.94, symbol ATD.B on Toronto, hit a new all-time high this week after reporting improved profits in the latest quarter. Couche-Tard operates 7,987 convenience stores throughout North America. The Canadian outlets operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. In Europe, the company operates 2,229 stores across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic states (Estonia, Latvia and Lithuania) and Russia....

With other properties sold off, IAMGold is focused solely on its gold mines, which we think enhances its prospects for aggressive investors.

Today, we look at a value stock that has the potential for a strong rebound when oil and gas prices recover. Enerflex, an independent company since it was spun off by Toromont Industries (Toronto symbol TIH) in 2011, is a major supplier of equipment to the natural gas industry. A timely U.S. acquisition in 2014 has helped Enerflex generate positive earnings despite a decline in orders, and also enhances the company’s international growth prospects. And the dividend, which yields 3.2%, appears safe.

ENERFLEX LTD. (Toronto symbol EFX; www.enerflex.com) rents and sells equipment and services for natural gas production, including compression and processing plants, refrigeration gear and power generators.

On June 30, 2014, the company closed its $431- million U.S. acquisition of two businesses owned by privately held Axip Energy Services: an international contract compression and processing subsidiary and a division that provides aftermarket services.

In the three months ended June 30, 2015, Enerflex’s revenue fell 8.3%, to $389.7 million from $424.9 million a year earlier. But earnings per share more than doubled, to $0.34 from $0.15. International contributions from the Axip businesses pushed up earnings and almost offset weaker revenue in the U.S. and Canada. However, falling oil and gas prices are now hurting the company’s orders.

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NEW GOLD INC., $3.00, symbol NGD on Toronto, has four mines: Mesquite in the U.S., Cerro San Pedro in Mexico, the Peak mine in Australia and the New Afton mine in B.C. The company also owns 30% of the El Morro copper/gold project in Chile, 100% of the Blackwater property in B.C. and 100% of Ontario’s Rainy River project. New Gold has just agreed to sell its El Morro stake to Goldcorp (Toronto symbol G) for $90 million in cash, 4% of El Morro’s gold production when a mine is built, and the cancellation of a $93-million loan from Goldcorp....

Mitel Networks strengthens its niche market with more telecom products in the cloud

SIERRA WIRELESS, $27.31, symbol SW on Toronto, makes modules and software that connect products—including smart electricity meters and vehicles—to the Internet. This is known as machine to machine, or more generally as the Internet of Things. In the three months ended June 30, 2015, the company’s revenue rose 17.0%, to a record $158.0 million from $135.0 million a year earlier (all figures except share price in U.S. dollars). Sierra continues to add new clients. Excluding one-time items, the company earned $8.6 million, or $0.26 a share, compared to just $2.6 million, or $0.08, a year earlier. Sierra sold more high-margin cloud-based services to large customers during the latest quarter. It also cut costs....

BROADRIDGE FINANCIAL SOLUTIONS INC., $56.31, symbol BR on New York, hit a new all-time high this week after reporting strong quarterly results. The company serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. It processes 90% of all proxy votes in the U.S. and Canada. Without one-time items, the company earned $171.5 million in its fiscal 2015 fourth quarter, which ended June 30, 2015. That’s up 18.6% from $144.6 million a year earlier. Earnings per share rose 20.7%, to $1.40 from $1.16, on fewer shares outstanding, beating the consensus estimate of $1.38....

Both are growth stocks, but we see Sierra Wireless growing with the Internet of Things while Adobe Systems merits a hold right now.

WESTJET AIRLINES LTD., $24.07, symbol WJA on Toronto, has announced that its pilots have rejected plans to form a union, with 55% voting against and 45% in favour. The result follows a June 2015 vote in which 82% of the company’s almost 3,000 flight attendants approved a new five-year work agreement. That deal was important because it ended a unionization drive some flight attendants started more than a year ago. The company has a great hidden asset in its non-union workforce, as many flyers find that it provides friendlier service than they get from unionized airlines. WestJet also benefits from the fact that most of its employees are shareholders....