stock pickers

Despite pessimistic media forecasts, Canada’s banks remain strong and international exposure helps make Scotiabank a best buy.

Every Monday we feature “A Stock to Sell” as our daily post. With every stock or investment we recommend as a sell, we give you a full explanation of why we advise against investing in it at this time.

North American Palladium (symbol PDL on Toronto; www.napalladium.com) owns the Lac des Iles palladium mine near Thunder Bay. It also owns the Vezza gold project in Quebec’s Abitibi region.

Palladium is mainly used in catalytic converters for automobiles, as well as in jewellery.

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ALIMENTATION COUCHE-TARD INC., $49.29, symbol ATD.B on Toronto, operates 6,314 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, Couche-Tard operates 2,233 stores across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic States (Estonia, Latvia and Lithuania) and Russia. In the three months ended February 1, 2015, Couche-Tard’s sales rose just 1.7%, to $2.33 billion from $2.29 billion a year earlier (all figures except share price in U.S. dollars). The higher U.S. dollar cut the revenue contribution from the company’s European operations....

In the next few weeks, we will unveil a major upgrade to our website, TSI Network (www.tsinetwork.ca). We launched the current website in 2009 to host our four newsletters (Canadian Wealth Advisor, Stock Pickers Digest, The Successful Investor and Wall Street Stock Forecaster), our Inner Circle service and over 2,000 articles on individual investments. The current site served its purpose, but it’s time to move ahead with an advanced redesign....

TORONTO-DOMINION BANK $54 (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $97.2 billion; Price-to-sales ratio: 3.4; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.td.com) gets 65% of its revenue and earnings from its Canadian retail banking division, which serves 15 million customers through 1,164 branches.

In the U.S., the bank operates 1,301 branches along the east coast from Maine to Florida. This business supplies 25% of its revenue and earnings. The remaining 10% comes from TD’s wholesale banking division, which offers securities trading and investmentbanking services, such as stock underwriting.

TD’s revenue jumped 53.1%, from $19.6 billion in 2010 to $30.0 billion in 2014 (fiscal years end October 31).

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Building on the strong performance of its shopping mall empire, RioCan REIT unlocks more property value in a deal with Hudson’s Bay.

SASOL LTD. (ADR), $32.04, symbol SSL on New York, has developed a technology to convert coal and natural gas into motor fuels. The company is the world’s largest producer of fuel from coal at its Secunda, South Africa, facility. It also makes synthetic fuels from natural gas at plants in Qatar and Nigeria. As well, Sasol produces chemicals, oil and gas in Africa. It’s also South Africa’s third-largest coal producer. In its fiscal 2015 first half, which ended December 31, 2014, Sasol’s revenue rose 1.6%, to 99.8 billion South African rand (1 rand = $0.1099 U.S.) from 98.2 billion rand a year earlier. Earnings per ADR gained 6.0%, to 32.00 rand from 30.19 rand. The U.S. dollar rose against the rand, increasing the value of Sasol’s sales outside South Africa. That offset a 19% decline in realized oil prices....

Canada’s big five banks have fallen out of favour in the past few weeks, for two main reasons. First, the Bank of Canada unexpectedly cut its benchmark interest rate. While lower rates should spur loan demand, banks will earn less interest income on these new loans. Moreover, the banks may have to increase the rate they pay to attract depositors, which would squeeze their profit margins. In addition, investors fear that lower oil prices could force oil producers to default on their loans. Layoffs in the sector could also lead to higher credit losses in Alberta....

In the next few weeks, we will unveil a major upgrade to our website, TSI Network (www.tsinetwork.ca). We launched the current website in 2009 to host our four newsletters (Canadian Wealth Advisor, Stock Pickers Digest, The Successful Investor and Wall Street Stock Forecaster), as well as over 2,000 articles on individual investments. The current site served its purpose, but it’s time to move ahead with an advanced redesign. So we are building a new site with significant upgrades for our subscribers....

Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendations on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves you should know about, from coverage in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor.

We continue to recommend that investors aim to own two or more of Canada’s big five banks. But we also feel that conservative investors should further diversify their Finance-sector holdings with stocks like Great-West Lifeco.

GREAT-WEST LIFECO (Toronto symbol GWO; www.greatwestlifeco.com) has reported strong results in its latest quarter and raised its dividend.

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