stock pickers
Focus on investment quality, and favour growth over momentum, and you’ll improve your chances of success with aggressive stock investing.
AEROPOSTALE INC., $9.90, symbol ARO on New York, moved up over 15% this week on news that Sycamore Partners has taken a nearly 8% stake in the company. Sycamore is a New York-based private equity firm that specializes in consumer and retail investments. It has over $1 billion in capital under management. Earlier this year, Sycamore paid $600 million for Hot Topic, a U.S. teen retailer with over 800 mall-based stores; in December 2012, it made an unsuccessful $555-million bid for Billabong, the Australian surf wear company; and in early 2012, it bought Talbots, a struggling women’s wear chain, for about $400 million....
BLACKBERRY LTD., $9.08, Toronto symbol BB, fell 16% on Friday after the company announced that it will cut 40% of its workforce due to slow demand for its new BlackBerry 10 smartphones. In its fiscal 2014 second quarter, which ended August 31, 2013, BlackBerry sold 3.7 million phones. That’s down from 7.4 million phones a year earlier. BlackBerry will also write down the value of its unsold phones. As a result, it expects to report a loss of between $950 million, or $1.81 a share, and $995 million, or $1.90 a share, in the second quarter (all amounts except share price in U.S. dollars). If you exclude unusual items, it will still lose between $0.47 and $0.51 a share....
MAJOR DRILLING GROUP INTERNATIONAL INC., $7.28, symbol MDI on Toronto, is a large contract drilling firm that mainly serves the mining industry. In the three months ended July 31, 2013, Major’s revenue fell 54.4%, to $108.2 million from a record $237.6 million a year earlier. Earnings also declined sharply, to $1.5 million, or $0.02 a share, from $31.9 million, or $0.40. The latest earnings included $2.0 million of one-time pre-tax restructuring charges, such as costs related to layoffs. The company has cut its staff by 45%, or 2,300 workers, over the past year. Many of Major’s large- and medium-sized mining customers slowed their drilling activity in the latest quarter, and orders from junior miners dropped sharply. That’s because juniors are having a lot of difficulty raising funds in today’s uncertain resource markets....
METRO INC. $67 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 93.1 million; Market cap: $6.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.metro.ca) operates about 600 supermarkets in Quebec and Ontario....
DOMINO’S PIZZA (New York symbol DPZ; www.dominos.com) is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 10,440 outlets in the U.S. and over 70 other countries. Franchisees run most of these stores....
CARFINCO FINANCIAL GROUP INC., $10.20, symbol CFN on Toronto, provides car loans to consumers who don’t meet the criteria of traditional lenders, like banks. Carfinco has now expanded into the U.S. through its $9.5-million purchase of Persian Acceptance Corp., an automotive lender that also caters to less affluent borrowers. Persian operates in Massachusetts, New Hampshire, Maine, Connecticut and Vermont. It works with about 362 car dealers who use the company to get loans for their customers. Persian currently has $42.7 million U.S. in outstanding loans. To put that in perspective, Carfinco has $195.0 million of loans....
ALIMENTATION COUCHE-TARD, $60.74, symbol ATD.B on Toronto, rose almost 5% today after reporting its latest quarterly results. In the three months ended July 21, 2013, Couche-Tard’s sales jumped 48.0%, to $8.9 billion from $6.0 billion a year earlier. The gain mostly came from Norway’s Statoil Fuel & Retail ASA, which Couche-Tard bought for $2.7 billion in June 2012 (all figures except share price in U.S. dollars). The company also benefited from higher fuel volumes and merchandise sales. Couche-Tard gets about 30% of its revenue by selling merchandise. Excluding one-time items, earnings rose 20.9%, to $220.0 million from $182.0 million. Earnings per share rose 16.0%, to $1.16 from $1.00, on more shares outstanding. The latest earnings beat the consensus estimate of $0.95 a share....
HECLA MINING COMPANY (New York symbol HL; www.hecla-mining.com) explores for, mines and processes silver and gold in the U.S. and Mexico. Most of its silver output comes from its Greens Creek mine in Alaska and its Lucky Friday mine in Idaho. In the three months ended June 30, 2013, Hecla’s revenue rose 27.3%, to $85.3 million from $67.0 million a year earlier. The company lost $0.03 a share, compared to a profit of $0.01. The loss mostly came from lower silver prices and costs related to its recent acquisition of Aurizon Mines....
DOREL INDUSTRIES, $35.45, symbol DII.B on Toronto, has agreed to buy 70% of Caloi, Brazil’s largest bicycle company, for an undisclosed sum. Established in 1898, Caloi is one of the world’s oldest bicycle makers. It is also Latin America’s top-selling bicycle brand and the leader in the Brazilian market. Caloi has a plant in Brazilian city of Manaus that is the largest bicycle manufacturing facility outside Southeast Asia, producing more than 700,000 units a year....