stock pickers
TIM HORTONS INC., $96.97, symbol THI on Toronto, shareholders will vote on the friendly takeover offer from BURGER KING WORLDWIDE, $34.81, symbol BKW on New York, on Tuesday, December 9, 2014. If the deal is approved, Tim Hortons investors will have a number of options: They can sell their shares on the Toronto exchange and receive the current trading price of $96.97 (less brokerage commissions). If they don’t do that, they can opt for one of the three choices below by notifying their brokers no later than 5:00 p.m. on Tuesday, December 9, 2014....
Pat McKeough responds to many requests from members of his Inner Circle for specific tips on trading stocks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week we offer you a report on one of the stocks profiled in these Q&A sessions. We give you Pat’s buy-hold-sell recommendation as well as his analysis of the stock. This is part of the specific buy, hold and sell advice we offer you in our daily posts. Every week you get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday, and “U.S. Stock Picks” on Thursday.
This week an Inner Circle member asked us about Canadian engineering firm WPS Group. This firm’s growth strategy centres on the steady acquisition of smaller firms. This approach (similar to that of Edmonton-based engineering firm Stantec, a stock we follow in Stock Pickers Digest) has been producing profitable results for WPS. Pat examines all four of the company’s 2014 acquisitions and assesses the risk that comes with the acquisition and integration of new firms.
Q: Dear Pat: I would like to have your opinion on WSP Global. Thank you very much.
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This week an Inner Circle member asked us about Canadian engineering firm WPS Group. This firm’s growth strategy centres on the steady acquisition of smaller firms. This approach (similar to that of Edmonton-based engineering firm Stantec, a stock we follow in Stock Pickers Digest) has been producing profitable results for WPS. Pat examines all four of the company’s 2014 acquisitions and assesses the risk that comes with the acquisition and integration of new firms.
Q: Dear Pat: I would like to have your opinion on WSP Global. Thank you very much.
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WSP Global, $33.70, symbol WSP on Toronto (Shares outstanding: 62.3 million; Market cap: $2.1 billion; www.wspgroup.com), consults on engineering projects for public and private sector clients around the world. It employs about 17,500 people, mainly engineers, technicians, scientists, environmental experts and architects, in more than 300 offices across 30 countries. In the three months ended September 27, 2014, WSP’s revenue jumped 31.8%, to $537.4 million from $407.6 million a year earlier. Earnings per share gained 9.3%, to $0.46 from $0.43. WSP continues to grow rapidly by acquisition. The latest is its $1.35-billion purchase of Parsons Brinckerhoff, U.K.-based Balfour Beatty plc’s professional service business....
Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendation 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.
SHERRITT INTERNATIONAL (Toronto symbol S; www.sherritt.com) sold off all of its coal interests for $793 million in cash in April 2014.
The company is now focused on nickel production, with operations in Cuba and Canada. As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba.
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SHERRITT INTERNATIONAL (Toronto symbol S; www.sherritt.com) sold off all of its coal interests for $793 million in cash in April 2014.
The company is now focused on nickel production, with operations in Cuba and Canada. As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba.
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REITMANS (CANADA) LTD., $5.94, symbol RET.A on Toronto, is shutting down its underperforming Smart Set chain. Over the next 18 months, it will close 31 locations and convert the other 76 to other banners, including Reitmans or Penningtons (plus-sizes). The closures will result in a $2.2-million charge in the current quarter. To put that in perspective, Reitmans earned $9.6 million, or $0.15 a share, in the three months ended August 2, 2014. That was down 5.9% from $10.2 million, or $0.16, a year earlier. Reitmans had tried rebranding Smart Set, which was selling lower-priced, fashionable clothing to young women, but its efforts were unsuccessful. Its plan involved shifting the stores toward women in their late 20s and early 30s, as well as raising prices....
Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendation 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.
CANADIAN TIRE CORP. (Toronto symbol CTC.A; www.canadiantire.ca)operates 492 Canadian Tire stores, which specialize in automotive, household and sporting goods. It also owns other retail chains, such as Mark’s (casual clothing) and SportChek.
The company continues to add new locations and renovate older stores. It’s also benefiting from its 2011 purchase of the Forzani Group of sporting goods stores, including the popular SportChek banner. These moves are helping it compete with U.S.-based retailers like Wal-Mart.
Earlier this year Canadian Tire agreed to sell 20% of its credit card operations to Bank of Nova Scotia for $500 million. The company has an option to sell an additional 29% to the bank over the next 10 years.
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CANADIAN TIRE CORP. (Toronto symbol CTC.A; www.canadiantire.ca)operates 492 Canadian Tire stores, which specialize in automotive, household and sporting goods. It also owns other retail chains, such as Mark’s (casual clothing) and SportChek.
The company continues to add new locations and renovate older stores. It’s also benefiting from its 2011 purchase of the Forzani Group of sporting goods stores, including the popular SportChek banner. These moves are helping it compete with U.S.-based retailers like Wal-Mart.
Earlier this year Canadian Tire agreed to sell 20% of its credit card operations to Bank of Nova Scotia for $500 million. The company has an option to sell an additional 29% to the bank over the next 10 years.
SUNCOR ENERGY INC., $40.52, Toronto symbol SU, plans to spend between $7.2 billion and $7.8 billion to expand and upgrade its operations in 2015. To put these figures in context, the company’s cash flow was $7.6 billion in the first nine months of 2014. Suncor will invest 55% of the 2015 estimate, or $4.3 billion, in its oil sands and other growth projects. The remaining 45% will go to refineries and conventional oil and gas properties. The midpoint of the 2015 range is 10.3% higher than the $6.8 billion the company expects to spend this year—even though oil prices have fallen by more than 20% in the past six months. Suncor feels its new oil sands projects can still generate positive cash flow at today’s prices....
BMTC GROUP, $16.00, symbol GBT.A on Toronto, is one of Quebec’s largest retailers of furniture, electronic goods and household appliances, with 36 stores. In March 2012, BMTC introduced a new banner, Economax, which offers lower-priced products. The company rebranded four outlets that had been Brault & Martineau liquidation centres. In 2013, BMTC opened four more EconoMax stores. It added another, in Joliette, in March 2014, and an additional one, in LaSalle, on October 24, 2014. BMTC is now considering purchasing land in Drummondville for a new store that would open in late 2015....
MITEL NETWORKS $11.35 (Toronto symbol MNW; TSINetwork Rating: Extra Risk) (613-592-2122; www.mitel.ca; Shares outstanding: 99.9 million; Market cap: $1.1 billion; No dividends paid) has reported its third quarter of results that include Aastra Technologies, a Stock Pickers Digest recommendation that Mitel acquired in a friendly takeover on January 31, 2014. In the latest quarter, Mitel’s revenue jumped 101.2%, to $272.4 million from $135.0 million a year ago (all figures except share price in U.S. dollars). Most of the increase came from Aastra. Without one-time items, earnings gained 134.6%, to $19.0 million from $8.1 million. However, earnings per share rose just 28.6%, to $0.18 from $0.14, as the company issued new shares to pay for Aastra....
Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendation 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.
Maple Leaf Foods is nearing the end of its multi-year plan to unload less profitable businesses and modernize its meat-processing plants. The plan’s costs have depressed the company’s current earnings, but it greatly improves its longer-term prospects.
MAPLE LEAF FOODS INC. (Toronto symbol MFI; www.mapleleaf.ca) is Canada’s largest foodprocessing company. It mainly sells its products, including fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands.
In May 2014, the company sold its 90.0% stake in Canada Bread, Canada’s second-largest producer of baked goods after Weston Bakery. It received $1.66 billion for this holding.
Meanwhile, Maple Leaf continues to make progress with a major restructuring of its meat-processing operations, which mainly involves closing older plants and shifting their operations to newer facilities. The company expects to complete the plan by the end of 2015.
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Maple Leaf Foods is nearing the end of its multi-year plan to unload less profitable businesses and modernize its meat-processing plants. The plan’s costs have depressed the company’s current earnings, but it greatly improves its longer-term prospects.
MAPLE LEAF FOODS INC. (Toronto symbol MFI; www.mapleleaf.ca) is Canada’s largest foodprocessing company. It mainly sells its products, including fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands.
In May 2014, the company sold its 90.0% stake in Canada Bread, Canada’s second-largest producer of baked goods after Weston Bakery. It received $1.66 billion for this holding.
Meanwhile, Maple Leaf continues to make progress with a major restructuring of its meat-processing operations, which mainly involves closing older plants and shifting their operations to newer facilities. The company expects to complete the plan by the end of 2015.
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