Thomson Reuters Corp.
Toronto symbol TRI, divides its operations into two divisions: Markets, which provides financial information products to banks and other financial institutions; and Professional, which sells specialized information to professionals in the legal, accounting, scientific and healthcare fields.
CANADIAN PACIFIC RAILWAY LTD. $53 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 168.1 million; Market cap: $8.9 billion; Price-to-sales ratio: 1.4; SI Rating: Above Average)...
AIC DIVERSIFIED CANADA FUND $34.89 (CWA Rating: Conservative) mainly holds shares of Canadian companies of average or above-average quality. It also holds some U.S. stocks. The $1.0-billion fund’s 10 largest holdings are TD Bank, Shoppers Drug Mart, Power Financial, Canadian Oil Sands Trust, First Capital Realty, Thomson Reuters Corporation, Brookfield Asset Management, Royal Bank of Canada, C.I. Financial Corp. and EnCana Corporation. AIC Diversified Canada holds just 21 stocks. The fund holds 43.9% of its assets in financial-services stocks. The rest of the portfolio breaks down as follows: energy, 15.2%; consumer staples, 10.6%; consumer discretionary, 8.0%; health care, 7.4%; and information technology, 3.6%....
These two AIC funds hold much of their portfolios in finance stocks. This sector has risen lately on better-than-expected profits and an improved outlook for the economy as a whole. We prefer diversified funds. But if you must focus on a particular sector, finance still offers sound long-term prospects. If you invest in these funds, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector. AIC AMERICAN ADVANTAGE FUND $4.04 (CWA Rating: Aggressive) (AIC Group of Funds, 1375 Kerns Road, Burlington, Ont., L7R 4X8, 1-800-263-2144; Web site: www.aicfunds.com. Buy or sell through brokers) invests mostly in U.S. stocks. It holds 99% of its assets in the financial-services area....
UNIVERSAL CANADIAN GROWTH FUND $17.65 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor St. West, Toronto, Ontario, M5S 3B5. Web site: www.mackenziefinancial.com. Tel: 1-800-387-0780; Load fund: available from brokers) holds companies that its managers believe have strong management and sound business prospects. The fund holds fewer than 40 stocks. Universal Canadian’s top holdings include Thomson Reuters, Rogers Communications, Becton Dickinson, ShawCor, John Wiley & Sons, Dun & Bradstreet, Shoppers Drug Mart, Martinrea International, Waters Corp. and Enerflex Systems. The $823.1-million fund’s breakdown by economic sector is as follows: consumer discretionary (26%), energy (16.4%), industrials (12.1%), health care (8.8%), consumer staples (6.2%), telecommunications services (5.8%), information technology (5.2%), and metals and minerals (1.3%)....
The recession is driving down advertising revenue for many newspaper publishers and information providers. As well, more people are turning to the Internet as their main source of information. We feel these three information providers will overcome the current downturn. As market leaders, their well-known brands and strong reputations will continue to attract customers and advertisers. As well, all three are aggressively cutting their costs. THOMSON REUTERS CORP. $32 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 828.6 million; Market cap: $26.5 billion; Price-to-sales ratio: 2.0; SI Rating: Above Average) divides its operations into two divisions: Markets accounts for 60% of the company’s revenue and sells financial-information products to banks and other financial institutions. Professional (40% of revenue) sells specialized information to professionals in the legal, accounting, scientific and health-care fields. Thomson Reuters gets about 60% of its revenue from the Americas, followed by Europe (30%) and Asia (10%)....
THOMSON REUTERS CORP. $32 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 828.6 million; Market cap: $26.5 billion; Price-to-sales ratio: 2.0; SI Rating: Above Average) divides its operations into two divisions: Markets accounts for 60% of the company’s revenue and sells financial-information products to banks and other financial institutions. Professional (40% of revenue) sells specialized information to professionals in the legal, accounting, scientific and health-care fields. Thomson Reuters gets about 60% of its revenue from the Americas, followed by Europe (30%) and Asia (10%). Thomson Reuters took its present form when the Ontario-based Thomson Corp. bought the U.K.-based Reuters news agency in April 2008 for $17 billion in cash and shares (all amounts except share price and market cap in U.S. dollars). In the three months ended March 31, 2009, Thomson Reuters’ revenue soared 70.3%, to $3.1 billion from $1.8 billion. However, if you assume that Thomson bought Reuters at the start of 2007, sales would have declined 3.3%. The drop was due to the negative impact of the higher U.S. dollar, which hurts the value of the company’s overseas sales. If you disregard exchange rates, revenue would have risen 3%....
POTASH CORP. OF SASKATCHEWAN, $107.66, Toronto symbol POT, fell slightly on Friday after it lowered its second-quarter earnings forecast. Potash now expects to report earnings of $0.70 a share (all amounts except share price in U.S. dollars). That’s 46.2% below the midpoint of its earlier range of $1.10 to $1.50. Lower prices for crops, such as corn and wheat, continue to dampen fertilizer demand and prices. Plus, sales have been hurt by unusually dry conditions in the Canadian prairies and cool, wet weather in the U.S. Potash Corp. and other fertilizer makers, such as Agrium (see below), have cut their production in an effort to lower global inventories and push up prices. However, it will probably take several months before demand starts rising again....
ARBOR MEMORIAL SERVICES INC. $17 (Toronto symbol ABO.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 10.7 million; Market cap: $181.9 million; Price-to-sales ratio: 0.7; SI Rating: Average) owns 41 cemeteries, 26 crematoria, four reception centres and 87 funeral homes in eight provinces. In its second quarter, which ended April 26, 2009, earnings fell 7.6%, to $4.9 million, or $0.45 a share. Arbor earned $5.3 million, or $0.49 a share, a year earlier. Revenue rose 3.3%, to $60 million from $58.1 million. The company performed 2.9% fewer funeral services in the quarter, but earned higher fees per service. Demand for funerals could stagnate or drop in the next few years. Many people born in the 1920s have already died, and birthrates were lower in the 1930s and 1940s due to the Great Depression and World War II. The post-war baby boomers have not yet reached their years of highest mortality. But boomers will likely spend more on funerals than their parents. Arbor is a buy....
IVY GROWTH AND INCOME FUND $17.86 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor Street West, Toronto, Ontario M5S 3B5. 1-800-387-0780; Web site: www.mackenziefinancial.com. Load fund — available from brokers) is a balanced fund. As such, it holds a mix of stocks, bonds and cash. Ivy Growth and Income Fund has returned 2.9% annually for the 10 years ended April 30, 2009. Over the last year, the fund lost 16.6%. Its MER is 2.08%. The fund’s top stock holdings are: Thomson Reuters Corp., Shoppers Drug Mart, Imperial Oil, Tim Hortons, Bank of Nova Scotia, Becton Dickinson, Colgate-Palmolive, McDonald’s Corporation, Nestle SA and Reckitt Benckiser Group plc. The $1.8-billion Ivy Growth and Income Fund holds 25% of its assets in bonds. In Canada, interest rates on bonds are between 2% and 4% annually. That’s the total return that a bond can provide from today until the day it matures. However, bonds leave investors at the mercy of inflation, which shrinks the purchasing power of all fixed-return investments. In fact, an upsurge in inflation could wipe out all returns on bonds, as well as some of their principal....
IVY CANADIAN FUND $20.80 (CWA Rating: Conservative) invests in high-quality, large-capitalization stocks. The $1.8-billion fund’s top holdings include: Thomson Reuters, Shoppers Drug Mart, Imperial Oil, Tim Hortons, Becton Dickinson & Co., McDonald’s, Colgate-Palmolive, Nestle SA, Bank of Nova Scotia and Reckitt Benckiser Group plc. Ivy Canadian’s breakdown by industry includes: consumer staples, 35.4%; consumer discretionary, 18.9%; energy, 9.2%; financials, 8.6%; health care, 6.2%; and industrials, 6.2%....