stock pickers

On January 15, Stock Picker’s Digest, our newsletter for aggressive investing, will unveil a stock that’s well positioned for explosive profits in 2010 — and if you hold it for a couple of years, there’s a great chance that it could skyrocket even further. In fact, we think this company’s prospects are so bright we’ve named it Stock Picker’s Digest’s #1 stock pick for the coming year. This Canadian firm has staked out a strong position in its industry. Plus, its low cost structure puts it in a strong position to profit as the economy recovers. And these advantages are only the beginning. The company has recently made a big investment in improving its computer systems. And it has a great reputation for customer service — an often underappreciated factor in attracting and retaining clients....

Next week, Stock Pickers Digest, our newsletter for aggressive investors, will reveal its #1 pick for 2010. Don’t miss this unique opportunity to profit. If you’re not already a Stock Pickers Digest subscriber, click here to learn how you can get one month free when you subscribe today. KRAFT FOODS INC., $28.93, New York symbol KFT, is selling its North American frozen pizza business to Switzerland-based food company Nestle S.A. This business sells frozen pizzas under the DiGiorno, Tombstone and Jack’s brands in the U.S., and the Delissio brand in Canada. It accounts for about 4% of Kraft’s sales. Nestle will pay Kraft $3.7 billion when the sale closes later this year. That’s equal to 1.3 times Kraft’s 2008 earnings of $2.8 billion, or $1.88 a share....

CGI GROUP INC., $14.50, Toronto symbol GIB.A, is our Stock of the Year for 2010. Next week, Stock Pickers Digest, our newsletter for aggressive investors, will reveal its #1 pick for 2010. Don’t miss this unique opportunity to profit. If you’re not already a Stock Pickers Digest subscriber, click here to learn how you can get one month free when you subscribe today. CGI is Canada’s largest provider of computer-outsourcing services. These help its customers automate certain routine functions, such as accounting and purchasing supplies. That lets CGI’s clients focus on their main businesses, and improve their efficiency. The company’s outsourcing contracts typically last 5 to 10 years. That gives it steady, predictable revenue streams. Long-term contracts also give CGI a chance to build customer loyalty, and sell more services to its existing clients....

Grocery retailer Metro Inc. (symbol MRU.A on Toronto) is a good example of a stock that has graduated from Stock Pickers Digest, our newsletter for aggressive investors, to The Successful Investor, which focuses on more conservative selections. Stock Pickers Digest is where we analyze stocks that are attractive but not yet suitable for The Successful Investor’s conservative investing focus. Ideally, many of our Stock Pickers buys will one day mature into investments that we can recommend in The Successful Investor. We first added Metro to the stocks we analyze in Stock Pickers Digest in June 1998. At the time, it was trading at around $10. In December 2007, when we moved it to The Successful Investor, it was trading at about $32, for a 220% gain....

We’ve analyzed junior gold and mineral stocks for many years in Stock Pickers Digest, our newsletter for more aggressive investors. Many of our picks have shot up during the recent rise in gold from around $700 U.S. an ounce in the fall of 2008 to a recent peak of above $1,200 U.S. Gold has since dropped by about $100. But we think that’s a temporary fluctuation.

Use caution when investing in Canadian gold stocks

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NEW GOLD, $3.77, symbol NGD on Toronto, is reopening its Cerro San Pedro mine in Mexico after a Mexican court granted an injunction against a mining-suspension order from the Mexican environmental protection agency. The mine accounts for about one-third of New Gold’s 290,000 ounces per year of gold production. Cerro San Pedro has long been the subject of disputes with local groups and environmentalists, who claim it is harming a historically important area. They also argue that the operation threatens local watersheds....

Many Stock Pickers Digest recommendations pay no dividends. But some do provide significant income, along with capital-gains possibilities. In fact, dividends may generate up to a third of your long-term return. That’s why we now post the dividend yield (dividend rate divided by share price) in the basic information we present for each company we analyze. We’ll also tell you if a stock has never paid a dividend. (If it formerly paid dividends, we’ll tell you when it quit.)...

METRO INC. $37 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 108.5 million; Market cap: $4.0 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.5%; SI Rating: Average) is Canada’s third-largest supermarket operator, after Loblaw and Sobeys. Metro operates roughly 660 grocery stores in Quebec and Ontario. Its major banners include Metro, Super C and Food Basics. The company also operates or supplies around 270 drug stores. Eighty-one of these are located inside its supermarkets. Aside from its grocery business, Metro owns roughly 23% of Alimentation Couche-Tard Inc. (Toronto symbol ATD.B). Couche-Tard has more than 3,500 convenience stores in the U.S., and is the largest convenience-store operator in Canada, with over 2,000 outlets. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. Based on Alimentation Couche-Tard’s current stock price, this investment accounts for 23% of Metro’s market cap. Couche-Tard is a recommendation of Stock Pickers Digest, our publication for aggressive investors....

The rebounding global economy has pushed up commodity prices in recent months. But with the exception of gold, which has recently hit record highs, most commodities remain below their 2008 peaks. Still, resource demand should continue to improve with the global economy. Here are two profit-killing strategies to avoid when buying commodity investments. (We’ve also included our preferred approach, which you can read about below.) 1. Futures trading. Rising resource prices will likely tempt more investors to trade commodity futures. These include metals and minerals, fertilizers and agricultural products....

For most of its 62-year history, grocery-store operator Metro focused solely on its home province of Quebec. In 2005, it successfully expanded to Ontario with its acquisition of the A&P chain. This purchase gave Metro the size it needed to compete with other supermarket chains, such as Loblaw, and with non-traditional food sellers, such as Wal-Mart. The company now aims to build on its recent success with several new initiatives. These include lowering its marketing costs by consolidating its banners and private-label brands. The company is also launching a new customer-loyalty program through a joint venture with a leading marketing firm. That should help it drive long-term sales growth. These initiatives will help Metro thrive in a fiercely competitive industry. Moreover, its stake in convenience-store operator Alimentation Couche-Tard is an overlooked asset....