stock pickers

Every Monday we feature “A Stock to Sell” as our daily post. With every stock we recommend as a sell, we give you a full explanation of why we advise against investing in the stock at this time. ZARGON OIL & GAS (Toronto symbol ZAR; www.zargon.ca) produces natural gas and oil in Alberta, Manitoba, Saskatchewan and North Dakota. Its output is 62% oil and 38% gas....

MITEL NETWORKS, $9.49, symbol MNW on Toronto, has offered to buy ShoreTel Inc. (symbol SHOR on Nasdaq) for $540 million U.S. in cash. However, ShoreTel has rejected the $8.10 U.S.-a-share bid. Ottawa-based Mitel provides business phone systems and communications-focused software, while Sunnyvale, California-based ShoreTel makes phone and contact centre systems and software. The acquisition would be a good fit for Mitel, because ShoreTel does more than 90% of its business in the U.S. That would let Mitel quickly expand its phone and contact centre systems business in that market. As well, Mitel aims to move increasingly toward cloud-based products. This is where software and services are sold through subscriptions accessed over the Internet rather than as one-time sales. ShoreTel is well advanced in this area....

METRO INC. $75 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 85.1 million; Market cap: $6.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.6%; TSINetwork Rating: Average; www.metro.ca) operates 600 grocery stores and 250 drugstores in Quebec and Ontario.

In its fiscal 2014 third quarter, which ended July 5, 2014, Metro earned $144.5 million, unchanged from a year earlier. The company spent $147.2 million on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share gained 9.4%, to $1.63 from $1.49. Sales rose 1.4%, to $3.62 billion from $3.57 billion. Same-store sales gained 1.0%.

The company continues to benefit from the recent reorganization of its Ontario operations, including converting certain Metro outlets to the discount Food Basics banner.

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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.

BCE is facing regulatory hurdles, but the company is improving its services while keeping its operating costs down. That should let it maintain its high dividend yield.

BCE INC. (Toronto symbol BCE; www.bce.ca ) is Canada’s largest provider of telephone services, with 5.0 million customers in Ontario and Quebec. It also has 2.2 million high-speed Internet customers and 2.3 million TV subscribers.

BCE also sells wireless services to 7.8 million customers across Canada, and its Bell Media segment owns CTV Television, specialty channels and radio stations.

The company recently offered to buy the 56% of Bell Aliant (Toronto symbol BA) that it doesn’t already own. Bell Aliant sells phone and Internet services to 2.3 million clients in Atlantic Canada and rural Ontario and Quebec. It also provides wireless services through an alliance with BCE.

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DOMINO’S PIZZA INC., $84.84, symbol DPZ on New York, shot up over 12% this week after reporting strong quarterly results. The company operates the world’s largest chain of pizza stores that offer takeout and delivery. It has 10,900 outlets in the U.S. and over 70 other countries. Franchisees run most of them. In the three months ended September 7, 2014, the company’s earnings per share jumped 18.9%, to $0.63 from $0.53 a year earlier, beating the consensus estimate of $0.61....

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.

CGI GROUP INC. (Toronto symbol GIB.A; www.cgi.com)is Canada’s largest provider ofcomputer outsourcing services. CGI helps its clients automate routine functions, like accounting andbuying supplies. That makes them more efficientand lets them focus on their main businesses.

CGI follows what it calls a “Build and Buy” strategy. The “Build” part refers to expanding relationships with existing clients and attracting new ones. The company’s long-term outsourcing contracts give it steady, predictable revenue streams. They also let CGI sell these clients other services.

The “Buy” part of the strategy involves making acquisitions. CGI tempers the risk of buying other companies to fuel its growth by targeting firms that enhance its expertise or geographic presence.

For example, in August 2012, CGI completed the largest purchase in its history when it paid $2.7 billion for U.K.-based outsourcing firm Logica plc. As a result, Europe now accounts for 35% of CGI’s revenue, followed by the U.S. (25%), South America (20%), Canada (15%) and Asia (5%).

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SYMANTEC CORP., $21.94, symbol SYMC on Nasdaq, plans to break itself into two publicly traded companies. One will keep the Symantec name and focus on antivirus and security software and services. This business had $4.2 billion of revenue in Symantec’s 2014 fiscal year, which ended March 28, 2014. The other company will consist of Symantec’s information management (IM) operations, which include data backup and recovery software. It had $2.5 billion of revenue in fiscal 2014....

METRO INC. $75 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 85.1 million; Market cap: $6.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.6%; TSINetwork Rating: Average; www.metro.ca) operates 600 grocery stores and 250 drugstores in Quebec and Ontario. In its fiscal 2014 third quarter, which ended July 5, 2014, Metro earned $144.5 million, unchanged from a year earlier. The company spent $147.2 million on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share gained 9.4%, to $1.63 from $1.49. Sales rose 1.4%, to $3.62 billion from $3.57 billion. Same-store sales gained 1.0%. The company continues to benefit from the recent reorganization of its Ontario operations, including converting certain Metro outlets to the discount Food Basics banner....

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. VERESEN (Toronto symbol VSN; www.vereseninc.com) owns pipelines, power plants and gas-processing facilities across North America. A major holding is 50% of the Alliance gas line, which runs 3,000 kilometres between Chicago and Fort St. John, B.C. Veresen also owns the Alberta Ethane Gathering System, 42.7% of the Aux Sable NGL plant, and the Hythe/Steeprock natural gas gathering and processing complex in the Cutbank Ridge region of Alberta and B.C....

ATLANTIC TELE-NETWORK, $55.15, symbol ATNI on Nasdaq, is raising its quarterly dividend by 7.4%, to $0.29 a share from $0.27, with the October 10, 2014, payment. The stock now yields 2.1%. Atlantic closed the sale of its Alltel wireless business to AT&T (symbol T on New York) late last year. It now holds cash of $407.6 million, or $24.64 a share, and has paid off its $271.1 million of debt. The company could use its high cash balance to make acquisitions or expand its remaining operations. It could also make further dividend increases or pay special dividends. Meanwhile, the stock trades at a high 26.3 times the $2.10 a share that Atlantic is forecast to earn this year....