stock pickers

ALIMENTATION COUCHE-TARD INC., $44.47, symbol ATD.B on Toronto, has succeeded in its bid to buy Norway’s Statoil Fuel & Retail ASA for $2.7 billion. Couche-Tard says that 94.1% of Statoil Fuel’s shareholders have tendered to its offer. It also bought an additional 2.7% stake in Statoil Fuel on the stock market. That raises its total ownership to 96.8%. Under Norwegian law, Couche-Tard can now compel the remaining investors to tender their stock. Statoil Fuel has over 1,700 gas stations in Scandinavia and over 550 in Central and Eastern Europe. The company accounts for over 30% of convenience store sales in Norway, Sweden, Denmark, Latvia and Estonia, and is among the top five in both Lithuania and Poland....

We first recommended WAJAX CORP. $47.35 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.6 million; Market cap: $786.0 million; Dividend yield: 6.8%) in the May 2012 Stock Pickers Digest. We thought the company had considerable hidden value. It’s not a household name, but its 117 dealerships across Canada sell to a range of customers in growing markets like mining, oil sands, pipelines and public infrastructure. Wajax also trades at a low price-to-earnings ratio of 11.5, based on this year’s forecast profits, and its recent 35% dividend increase gives it a high 6.8% yield....

AEROPOSTALE INC., $16.73, symbol ARO on New York, is a mall-based retailer of casual clothing and accessories. The company has 919 Aeropostale stores in the U.S. and 70 in Canada and Puerto Rico. It mainly sells its clothing to 14-to17-year-olds. In addition, its 87 P.S. from Aeropostale stores in the U.S. are aimed at seven-to-12-year-old elementary-school children. Today, Aeropostale opened its first store in Quebec, at the Place du Royaume mall in the city of Saguenay. The company will open six more stores in the province through the rest of 2012. Additional locations include Place Laurier in Quebec City, Fairview Pointe Claire in Point-Claire, Promenades St. Bruno in St. Bruno De Montarville, Galleria D’Anjou in Anjou, Mail Champlain in Brossard and Les Galeries de la Capitale in Quebec City....

Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. 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 one of the highlights from these Q&A sessions. This week we respond to a question from an Inner Circle member asking about one of the Canadian stocks with important interests in a nation that has been living through a period of upheaval, Libya. Pat notes that this infrastructure and engineering specialist also does a lot of business in North America, and assesses its outlook. ...

SARA LEE CORP., $20.13, New York symbol SLE, will break itself into two publicly traded companies on June 28, 2012. Under this plan, Sara Lee will hand out shares of one of these new companies, D.E. Master Blenders 1753 N.V., to its own shareholders. D.E. Master Blenders will consist of Sara Lee’s international coffee and tea businesses. It will be based in the Netherlands, and its shares will trade on the Amsterdam Stock Exchange under the DE symbol. Investors will receive one share of D.E. Master Blenders for each Sara Lee common share they hold. This is a tax-deferred distribution, so investors will only be liable for capital-gains taxes on their new shares when they sell them. Shareholders will also receive a special cash dividend of $3.00 a share....

TEMPUR-PEDIC, $25.54, symbol TPX on New York, has cut its revenue and earnings forecasts for this year. That caused the stock to fall almost 42% this week. The company manufactures and distributes therapeutic mattresses and pillows made from its Tempur material. Tempur-Pedic now expects to report 2012 earnings of $2.70 a share on revenue of $1.43 billion. That’s down from its previous forecast of $3.80 to $3.95 a share in earnings on $1.6 billion to $1.65 billion of revenue. The consensus estimate was for full-year earnings of $3.93 a share on revenue of $1.64 billion....

We first recommended WAJAX CORP. $47.35 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.6 million; Market cap: $786.0 million; Dividend yield: 6.8%) in the May 2012 Stock Pickers Digest.

We thought the company had considerable hidden value. It’s not a household name, but its 117 dealerships across Canada sell to a range of customers in growing markets like mining, oil sands, pipelines and public infrastructure.

Wajax also trades at a low price-to-earnings ratio of 11.5, based on this year’s forecast profits, and its recent 35% dividend increase gives it a high 6.8% yield.

...

CHESAPEAKE ENERGY CORP., $15.58, symbol CHK on New York, has attracted the interest of activist investor Carl Icahn, who has purchased 7.6% of the natural gas producer. Mr. Icahn now aims to replace four of Chesapeake’s nine directors with his own nominees. The stock is down nearly 50% in the past year. That’s largely because rising production of shale gas and record-warm winter temperatures have increased gas supplies and depressed prices. The stock has also suffered in the past month on allegations that Aubrey K. McClendon, the company’s co-founder, CEO and chairman, took out loans that could put him in a conflict of interest. In response, Chesapeake’s board of directors has removed McClendon from his position and will soon replace him with an independent chairman....

BANK OF MONTREAL, $54.50, Toronto symbol BMO, reported higher-than-expected earnings for its latest quarter. In the bank’s fiscal 2012 second quarter, which ended April 30, 2012, its earnings rose 27.5%, to $982 million from $770 million a year earlier. That mainly reflects the contribution from U.S. banking firm Marshall & Ilsley Corp., which Bank of Montreal bought for $4.0 billion in stock in July 2011. Because of the extra shares the bank issued to pay for Marshall & Ilsley, its earnings per share rose at a slower pace of 15.2%, to $1.44 from $1.25. These figures exclude unusual items, such as costs to integrate the new acquisition. On this basis, the latest earnings beat the consensus forecast of $1.36 a share....

ALIMENTATION COUCHE-TARD INC., $40.67, symbol ATD.B on Toronto, recently agreed to buy Norway’s Statoil Fuel & Retail ASA for $2.8 billion U.S. That’s equal to 39% of Couche-Tard’s $7.3-billion market cap. Statoil Fuel has over 1,700 gas stations in Scandinavia and over 550 in Central and Eastern Europe. The company accounts for over 30% of convenience store sales in Norway, Sweden, Denmark, Latvia and Estonia, and is among the top five in both Lithuania and Poland. Norway’s largest North Sea oil producer, government-controlled Statoil ASA, owns 54% of publicly traded Statoil Fuel....