transcontinental

BOMBARDIER INC. $6.51 (www.bombardier.com) may close its train plant in the U.K. That’s because the company lost a $2.2-billion contract to supply 1,200 passenger cars to a rail system near London (all amounts except share price in U.S. dollars). Even so, Bombardier’s rail division has an order backlog of $33.5 billion. That’s twice the company’s overall revenue of $17.7 billion in the fiscal year ended January 31, 2011. Best Buy. TRANSCONTINENTAL INC. $16 (www.transcontinental.com) will become the exclusive Canadian seller of advertising on About.com and its related web sites, Netplaces.com (general information) and CalorieCount.com (dieting information). These web sites receive 5.8 million unique Canadian visitors a month, so this new deal should help Transcontinental profit as advertisers spend more on Internet advertising. Buy. PRECISION DRILLING CORP. $14 (www.precisiondrilling.com) plans to build 28 new drilling rigs in 2011, including 16 of its Super Series models, which use horizontal drilling techniques to extract oil from hard-to-reach deposits. The company already has longterm contracts for 17 of these rigs, and expects to sign contracts for the remaining 11 in the next few weeks. Buy.

Transcontinental Inc., Toronto symbol TCL.A, is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines. Transcontinental is one of the income investing stocks we analyze in our flagship newsletter, The Successful Investor. Transcontinental also has over 300 web sites. These web sites will become more important to the company’s growth in the next few years, as advertisers spend more on the Internet than on print products....

TRANSCONTINENTAL INC., $14.65, Toronto symbol TCL.A, is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines, and has over 300 web sites. The stock rose 3% after the company reported better-than-expected earnings this week. Transcontinental also raised its dividend for the second time in the past six months. In its 2011 second quarter, which ended April 30, 2011, Transcontinental’s revenue rose 0.9%, to $514.7 million from $510.0 a year earlier. Excluding unusual items, earnings rose 17.6%, to $40.1 million from $34.1 million a year earlier. Earnings per share rose 16.7%, to $0.49 from $0.42, on more shares outstanding. That beat the consensus estimate of $0.44 a share....

TRANSCONTINENTAL INC. $15 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 81.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.9%; TSINetwork Rating: Average; www.transcontinental.com) is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines. Transcontinental also has over 250 web sites. These web sites will become more important to its growth in the next few years, as advertisers spend more on the Internet than print products. In the first quarter of fiscal 2011, which ended January 31, 2011, Transcontinental earned $29.9 million, or $0.37 a share. That’s up 10.3% from $27.1 million, or $0.34 a share, a year earlier. These figures exclude writedowns and other non-recurring items. Revenue rose 3.6%, to $530.1 million from $511.6 million....

PLEASE NOTE: Our next Hotline will go out on Thursday, April 21, 2011. ARBOR MEMORIAL SERVICES INC., $25.00, Toronto symbol ABO.A, owns 85 funeral homes, 41 cemeteries, 26 crematoria, seven reception centres for memorial services. The company operates in eight provinces. The stock has gained nearly 70% since it fell to $15 in June 2009. That’s partly because Arbor is a thin trader, so it only takes a few trades to move the share price. That makes the stock highly volatile, and adds to its risk....

Torstar and Transcontinental should continue to benefit from rising advertising revenue as the economy improves. As well, both companies have bought new, efficient presses that have lowered their operating costs. Moreover, both are cheap in relation to their earnings. TORSTAR CORP. $15 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.1 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.torstar.com) publishes The Toronto Star, which is Canada’s largest daily newspaper by circulation. The company also publishes three other daily newspapers and over 100 weeklies, mainly in southern Ontario. Newspapers account for about 70% of Torstar’s revenue, and 60% of its earnings. The company’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading publisher of romance novels....

Transcontinental Inc., symbol TCL.A on Toronto, is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines. Transcontinental also has over 250 web sites. These web sites will become more important to the Canadian stock’s growth in the next few years, as advertisers spend more on the Internet than print products. In the three months ended January 31, 2011, Transcontinental earned $29.9 million, or $0.37 a share. That’s up 10.3% from $27.1 million, or $0.34 a share, a year earlier. These figures exclude writedowns and other non-recurring items. On this basis, the Canadian stock’s latest earnings beat the consensus estimate of $0.36 a share. Revenue rose 3.6%, to $530.1 million from $511.6 million....

BANK OF NOVA SCOTIA, $57.66, Toronto symbol BNS, reported record earnings this week. That prompted the bank to raise its dividend. In its 2011 first quarter, which ended January 31, 2011, Bank of Nova Scotia earned a record $1.2 billion. That’s up 18.8% from $988 million a year earlier. Earnings per share rose 17.6%, to $1.07 from $0.91, on more shares outstanding. That beat the consensus earnings estimate of $1.06 a share. Revenue rose 5.6%, to $4.1 billion from $3.9 billion. The bank continues to set aside less money to cover bad loans because of the improving economy; that was the main reason for the higher earnings. In the latest quarter, loan-loss provisions fell 27.5%, to $269 million from $371 million a year earlier....

BANK OF MONTREAL, $61.74, Toronto symbol BMO, rose 4% this week after it reported earnings that matched the consensus estimate. In its 2010 fiscal year, which ended October 31, 2010, the bank earned $2.8 billion. That’s up 57.2% from $1.8 billion a year earlier. Earnings per share rose 54.2%, to $4.75 from $3.08, on more shares outstanding. Unusual items, such as severance costs and writedowns of securities the bank holds, depressed its fiscal 2009 earnings. If you exclude these items, earnings per share would have risen 19.9%. Earnings at Bank of Montreal’s main retail-banking division rose 7%, while its wealth-management business’s earnings gained 31%. However, earnings at its capital-markets division fell 6%. That’s because volatile stock markets and concerns over European sovereign debt hurt trading volumes. Revenue rose 10.4%, to $12.2 billion from $11.1 billion....

Transcontinental Inc. (symbol TCL.A on Toronto) is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. This business provides 65% of its revenue and earnings. The company also publishes newspapers and magazines (30% of revenue and earnings). The remaining 5% comes from its marketing-communications division, which designs advertising campaigns, including direct mail, and analyzes customer-purchasing data. Transcontinental is one of the stock market picks we analyze in our Successful Investor newsletter. Transcontinental also has over 150 web sites. Business from the Internet accounts for just 1% of the company’s overall revenue. Still, these web sites will become more important to Transcontinental’s growth in the next few years, as advertisers spend more on the Internet than print products....