stock pickers

There is a history of Canadian consumer stocks trying, and failing, to establish a presence in the United States. But there are several outstanding success stories, such as Alimentation Couche-Tard (Toronto symbol ATD.B) our #1 Stock for 2012, which has profited extensively from its convenience stores and gas bars in the U.S. A new partnership initiative in the U.S. by Reitmans is on a more modest scale than Couche-Tard’s operations, but the women’s wear retailer is looking for a welcome boost in sales. REITMANS (CANADA) LTD. (Toronto symbol RET.A; www.reitmans.com) owns 925 women’s clothing stores across Canada. The chain consists of 364 Reitmans, 154 Penningtons, 153 Smart Set, 114 Addition Elle, 74 Thyme Maternity and 66 RW & Co. stores....

AASTRA TECHNOLOGIES, $16.56, symbol AAH on Toronto, develops and markets products and systems for accessing communication networks, including the Internet. Its technology is centred around business telephone systems and includes products that integrate land lines and mobile phones. In the three months ended June 30, 2012, the company’s sales fell 15.5%, to $147.1 million from $174.1 million a year earlier. Sales declined in all regions, including Western Europe, where Aastra gets the majority of its revenue. The lower sales caused the company’s earnings to fall sharply, to $1.9 million, or $0.15 a share, from $6.1 million, or $0.43 a share. Cash flow per share fell 43.8%, to $0.45 from $0.80....

ALIMENTATION COUCHE-TARD, $48.20, symbol ATD.B on Toronto, reported sharply higher sales and earnings in the latest quarter. The company is the largest convenience store operator in Canada, with over 2,000 outlets. It also has nearly 3,700 U.S. stores. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. In the three months ended April 29, 2012, Couche-Tard’s earnings jumped 82.6%, to $117.8 million from $64.2 million a year earlier (all figures except share price in U.S. dollars). Earnings per share rose 88.6%, to $0.66 from $0.35, on fewer shares outstanding....

Next year, U.S. retailing giant Target Corp. (New York symbol TGT) will open around 130 stores in Canada. That could put pressure on Canadian supermarket operators like Metro. However, Target stores will mainly focus on clothing and household goods, not food. Moreover, Metro has a long history of successfully competing with other big American chains, such as Wal-Mart and Costco. METRO INC. $53 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 98.9 million; Market cap: $5.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.metro.ca) is Canada’s third-largest supermarket operator, after Loblaw and Sobeys. The company has about 600 supermarkets in Quebec and Ontario. It also operates 260 drugstores under the Brunet, The Pharmacy and Drug Basics banners....

NEW GOLD INC., $9.95, symbol NGD on Toronto, has three operating mines: the Mesquite mine in the U.S., the Cerro San Pedro mine in Mexico and the Peak mine in Australia. It also owns 30% of the El Morro copper/gold project in Chile (Goldcorp owns the other 70%) and 100% of the Blackwater gold project in B.C. New Gold is now starting up its fourth mine. The $765-million New Afton gold mine in B.C. processed the first ore through its mill on June 28, 2012. New Gold’s target for commercial production at New Afton, defined as 30 days of operation at 60% capacity (or 6,600 tonnes per day) remains August 2012. The company expects New Afton to produce an average of 85,000 ounces of gold and 75 million pounds of copper annually over its 12-year life. There is still room to expand the mine’s reserves and increase production through exploration drilling....

ENCANA $20.75 (Toronto symbol ECA; Shares outstanding: 735.4 million; Market cap: $15.3 billion; TSINetwork Rating: Average; Dividend yield: 3.9%; www.encana.com) has come under fire over media reports that the company colluded with U.S.-based Chesapeake Energy Corp. (New York symbol CHK) with regard to various land deals in Michigan in 2009 and 2010. The companies are alleged to have agreed to avoid bidding against each other in order to keep prices of this land low. Now, recent discoveries of shale gas in Michigan have spurred strong demand for these properties for exploration purposes. (Chesapeake Energy is a recommendation of Stock Pickers Digest, our newsletter that focuses on aggressive investing.) Encana is now investigating these allegations, which are also likely to spur a number of class-action lawsuits. However, anti-competitive lawsuits are often difficult to prove....

GOOGLE INC., $580.07, Nasdaq symbol GOOG, will soon launch the Nexus 7, a new tablet computer that features a 7-inch touch-screen display and the latest version of the company’s Android operating system for mobile devices. The new tablet will cost $199. That should help Google complete with similar-sized tablets, including Amazon.com’s popular Kindle Fire. (Amazon.com is a recommendation of Stock Pickers Digest, our newsletter that focuses on aggressive investing.) Google will also launch the Nexus Q, a ball-shaped device that lets users stream music and video from the Internet to a TV set or stereo system. This device will cost $299....

CANADIAN PACIFIC RAILWAY LTD., $74.72, Toronto symbol CP, has appointed Hunter Harrison as a director and its new chief executive officer. Mr. Harrison is the former CEO of Canadian National Railway Co. (Toronto symbol CNR). CP feels Mr. Harrison will duplicate his success at CN, which included improving efficiency and speeding up deliveries. New trains and the recent drop in oil prices should also boost CP’s profitability....

MART RESOURCES, $1.36, symbol MMT on Toronto, jumped over 28% this week after the company declared a special dividend of $0.10 a share, payable on August 8, 2012. Mart will then begin paying quarterly dividends of $0.05 a share starting in September 2012. The stock is now up 288.6% since we first recommended it in our May 2010 issue at $0.35. Mart is focused on developing, producing and drilling for oil at its properties in Africa. The company is currently producing oil at its 50%-held Umusadege field in Nigeria....

Gold prices have moved down from their peak of $1,918 an ounce in August 2011 to the current price of $1,571. Gold could well regain its highs and move up even further over the longer term, although it will likely remain volatile. Higher prices would arise from investor fears that inflation or global political and economic instability will weaken key currencies, such as the euro or the U.S. dollar. If you do hold gold stocks, we recommend that you keep them to a reasonable part of the resources component of a well-balanced portfolio. YAMANA GOLD (Toronto symbol YRI; www.yamana.com) owns seven operating gold mines in Mexico, Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina, and has three other properties in advanced stages of development....