transcontinental
Toronto symbol TCL.A, provides direct marketing services, commercial printing services, and publishes magazines and newspapers, primarily in eastern Canada.
SUNCOR ENERGY INC., $40.52, Toronto symbol SU, plans to spend between $7.2 billion and $7.8 billion to expand and upgrade its operations in 2015. To put these figures in context, the company’s cash flow was $7.6 billion in the first nine months of 2014. Suncor will invest 55% of the 2015 estimate, or $4.3 billion, in its oil sands and other growth projects. The remaining 45% will go to refineries and conventional oil and gas properties. The midpoint of the 2015 range is 10.3% higher than the $6.8 billion the company expects to spend this year—even though oil prices have fallen by more than 20% in the past six months. Suncor feels its new oil sands projects can still generate positive cash flow at today’s prices....
TRANSCONTINENTAL INC. $16 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.0%; TSINetwork Rating: Average; www.tctranscontinental.com) is Canada’s leading printer of flyers, magazines, newspapers and books. It also publishes magazines and newspapers.
In May 2014, the company paid $133 million U.S. for Missouri-based Capri Packaging, which makes plastic bags and pouches for cheese and yogurt producers. Transcontinental feels it can use its printing expertise to make Capri more efficient. The purchase will add $72 million U.S. to its annual revenue of $2.1 billion (Canadian).
The company also recently agreed to pay $75 million for 74 community newspapers in Quebec, along with their websites. The seller is Sun Media, a subsidiary of Quebecor (Toronto symbol QBR.B).
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In May 2014, the company paid $133 million U.S. for Missouri-based Capri Packaging, which makes plastic bags and pouches for cheese and yogurt producers. Transcontinental feels it can use its printing expertise to make Capri more efficient. The purchase will add $72 million U.S. to its annual revenue of $2.1 billion (Canadian).
The company also recently agreed to pay $75 million for 74 community newspapers in Quebec, along with their websites. The seller is Sun Media, a subsidiary of Quebecor (Toronto symbol QBR.B).
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ENCANA CORP., $24.89, Toronto symbol ECA, announced this week that it will sell its remaining 54% stake in PriarieSky Royalty Ltd. (Toronto symbol PSK) to a group of underwriters. The company recently set up PrairieSky as a new firm to hold its Clearwater properties in southern Alberta. PriarieSky owns the oil and natural gas rights to 5.2 million acres. It does not drill wells or explore for new reserves. Instead, it collects royalties from other oil and gas producers. Encana will receive $2.6 billion when it completes the sale later this month. That’s equal to 14% of its $18.6-billion market cap....
Expanding by acquisition always adds risk. That’s because new businesses can come with hidden problems that delay or offset the extra revenue and savings they bring. Particularly severe problems could force the buyer to write down the value of the acquired assets. Buying companies in foreign markets adds even more risk, because it exposes the buyer to unpredictable currency moves and political uncertainty. However, when done right, foreign acquisitions can pay off for years to come, as the five companies below demonstrate....
BOMBARDIER INC., Toronto symbols BBD.A $3.70 and BBD.B $3.63, has fallen 5% in the past two weeks on concern about further setbacks for its new CSeries passenger jet. In late May 2014, an engine problem forced the company to suspend testing. The engine’s manufacturer has since investigated and feels it has fixed the fault. Bombardier is now testing the modified engines at its Montreal plant and plans to resume test flights by the end of this month. These problems have prompted Sweden’s Braathens Aviation to withdraw as the CSeries’ first customer. Braathens has not cancelled its order for 10 planes, but it will postpone delivery from the second half of 2015 to 2016 or later....
TRANSCONTINENTAL INC. $16 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.0%; TSINetwork Rating: Average; www.tctranscontinental.com) earned $36.8 million in its fiscal 2014 second quarter, which ended April 30, 2014. That’s up 12.9% from $32.6 million a year earlier. Earnings per share rose 11.9%, to $0.47 from $0.42, on more shares outstanding.
These gains are mainly due to cost savings from a restructuring plan that mostly consisted of job cuts. Revenue fell 3.8% in the latest quarter, to $498.2 million from $517.8 million, as the slow economy hurt advertising sales at the company’s newspapers and flyer-printing businesses.
These results do not include Missouri-based Capri Packaging, which Transcontinental bought for $146.1 million in May 2014. Capri, which makes plastic food containers, should add $72 million U.S. to Transcontinental’s annual revenue.
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These gains are mainly due to cost savings from a restructuring plan that mostly consisted of job cuts. Revenue fell 3.8% in the latest quarter, to $498.2 million from $517.8 million, as the slow economy hurt advertising sales at the company’s newspapers and flyer-printing businesses.
These results do not include Missouri-based Capri Packaging, which Transcontinental bought for $146.1 million in May 2014. Capri, which makes plastic food containers, should add $72 million U.S. to Transcontinental’s annual revenue.
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TRANSCONTINENTAL INC. $16 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.0%; TSINetwork Rating: Average; www.tctranscontinental.com) earned $36.8 million in its fiscal 2014 second quarter, which ended April 30, 2014....
BANK OF NOVA SCOTIA, $69.63, Toronto symbol BNS, reported better-than-expected earnings this week, as gains at its Canadian banking, wealth management and securities-trading operations offset weaker earnings growth overseas. In the quarter ended April 30, 2014, the bank’s earnings rose 13.9%, to $1.8 billion, or $1.39 a share, beating the consensus estimate of $1.32. A year earlier, Bank of Nova Scotia earned $1.6 billion, or $1.22 a share. Revenue rose 9.8%, to $5.7 billion from $5.2 billion. Earnings at the Canadian banking division (which supplies 32% of the bank’s total) rose 11.4%. The gain is partly due ING Direct (now called Tangerine), which Bank of Nova Scotia bought for $3.1 billion in November 2012. Higher credit card balances and steady mortgage and car loan demand also contributed....
TRANSCONTINENTAL INC. $15 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.3%; TSINetwork Rating: Average; www. tctranscontinental.com) aims to cut its reliance on cyclical print advertising with a new deal to buy Missouri-based Capri Packaging, which makes plastic packaging for food. The company will pay $133 million U.S. when the deal closes later this year.
Capri’s two plants generate $72 million U.S. of annual revenue. Transcontinental feels its commercial printing expertise will help it make Capri more efficient.
Acquisitions always expose the buyer to hidden risks. However, Transcontinental has signed a 10-year deal to supply packaging to dairy producer Schreiber Foods, Capri’s parent company. Schreiber accounts for 75% of Capri’s revenue, so this acquisition is safer than it looks.
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Capri’s two plants generate $72 million U.S. of annual revenue. Transcontinental feels its commercial printing expertise will help it make Capri more efficient.
Acquisitions always expose the buyer to hidden risks. However, Transcontinental has signed a 10-year deal to supply packaging to dairy producer Schreiber Foods, Capri’s parent company. Schreiber accounts for 75% of Capri’s revenue, so this acquisition is safer than it looks.
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TRANSCONTINENTAL INC. $15 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.3%; TSINetwork Rating: Average; www. tctranscontinental.com) aims to cut its reliance on cyclical print advertising with a new deal to buy Missouri-based Capri Packaging, which makes plastic packaging for food....