Visa Inc.
CAE INC., $14.29, Toronto symbol CAE, has won new contracts to supply flight simulators and related services and equipment to several military clients, including the German and New Zealand air forces. In all, these deals are worth $110 million, or 5% of CAE’s $2.1 billion of annual revenue. The company’s military-related businesses supply 40% of its revenue, which cuts its reliance on cyclical commercial airlines. CAE is our #1 buy for 2014....
The shift toward online shopping continues to pick up speed: over the next 10 years, e-commerce could account for 40% of all retail sales in developed nations and 30% in emerging markets. We feel the best way to profit from this trend is through shares of companies that process online payments and fulfill orders. Here are two such stocks we cover in our newsletter on U.S. investing, Wall Street Stock Forecaster. VISA INC. (New York symbol V; www.visa.com) operates the world’s largest electronic payments network, through which it processes credit, debit, prepaid and commercial transactions....
Vanguard Financials ETF, $46.65, symbol VFH on New York (Units outstanding: 45.3 million; Market cap: $2.1 billion; www.vanguard.com), holds a number of stocks among its top holdings that we recommend in Wall Street Stock Forecaster, including Wells Fargo, J.P. Morgan Chase and American Express. It also holds some we don’t recommend, including its third-largest holding, Berkshire Hathaway. Unlike many holding companies, Berkshire Hathaway trades at a premium to its net asset value, and we think it is fully valued at today’s share price. What’s more, its chairman and CEO, famous investor Warren Buffett, celebrated his 83rd birthday last August. When he dies or if he becomes incapacitated, the stock is vulnerable to a sudden and severe downturn....
TIM HORTONS $60.17 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 134.3 million; Market cap: $8.1 billion; Dividend yield: 2.1%) operates 3,610 coffee-anddonut shops in Canada, 870 in the U.S. and 44 in the Persian Gulf.
In the quarter ended March 30, 2014, sales rose 4.8%, to $766.4 million from $731.5 million a year ago. The gain was mainly because the company opened 23 outlets in Canada and 11 in the U.S. Samestore sales rose 1.6% at its Canadian locations and 1.9% in the U.S.
Earnings rose 5.5%, to $90.9 million from $86.2 million. In the past nine months, the company has repurchased $1 billion worth of shares. As a result, its earnings per share jumped 17.9%, to $0.66 from $0.56.
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In the quarter ended March 30, 2014, sales rose 4.8%, to $766.4 million from $731.5 million a year ago. The gain was mainly because the company opened 23 outlets in Canada and 11 in the U.S. Samestore sales rose 1.6% at its Canadian locations and 1.9% in the U.S.
Earnings rose 5.5%, to $90.9 million from $86.2 million. In the past nine months, the company has repurchased $1 billion worth of shares. As a result, its earnings per share jumped 17.9%, to $0.66 from $0.56.
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The shift toward online shopping continues to pick up speed: over the next 10 years, e-commerce could account for 40% of all retail sales in developed nations and 30% in emerging markets. We feel the best way to profit from this trend is through shares of companies that process online payments and fulfill orders, like these three. VISA INC. $209 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 628.4 million; Market cap: $131.3 billion; Price-to-sales ratio: 10.9; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest electronic payments network, through which it processes credit, debit, prepaid and commercial transactions....
VISA INC. $209 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 628.4 million; Market cap: $131.3 billion; Price-to-sales ratio: 10.9; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest electronic payments network, through which it processes credit, debit, prepaid and commercial transactions.
Visa gets most of its revenue from fees it charges card issuers and merchants for using its network. It bases its fees on payment volume, transactions processed and other factors. The banks that issue the cards are responsible for evaluating customer creditworthiness and collecting payments, not Visa.
In its fiscal 2014 second quarter, which ended March 31, 2014, Visa’s earnings jumped 25.8%, to $1.6 billion from $1.3 billion a year earlier. Per-share earnings rose 31.3%, to $2.52 from $1.92, on fewer shares outstanding. However, if you exclude a one-time tax benefit in the latest quarter, earnings per share rose 14.6%, to $2.20.
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Visa gets most of its revenue from fees it charges card issuers and merchants for using its network. It bases its fees on payment volume, transactions processed and other factors. The banks that issue the cards are responsible for evaluating customer creditworthiness and collecting payments, not Visa.
In its fiscal 2014 second quarter, which ended March 31, 2014, Visa’s earnings jumped 25.8%, to $1.6 billion from $1.3 billion a year earlier. Per-share earnings rose 31.3%, to $2.52 from $1.92, on fewer shares outstanding. However, if you exclude a one-time tax benefit in the latest quarter, earnings per share rose 14.6%, to $2.20.
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We still think investors will profit most—and with the least risk—by buying shares of well-established, dividend-paying stocks with strong business prospects. These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace. Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects....
Financial Select Sector SPDR Fund ETF, $21.82, symbol XLF on New York (Shares outstanding: 851.4 million; Market cap: $18.6 billion; www.spdrs.com), holds a number of stocks we recommend in Wall Street Stock Forecaster as its top holdings, including Wells Fargo, JP Morgan Chase and American Express. It also holds some stocks we don’t recommend, including its second-largest holding, Berkshire Hathaway. Unlike many holding companies, Berkshire Hathaway trades at a premium to its net asset value. We think the company is fully valued at today’s share price. What’s more, its chairman and CEO, famous investor Warren Buffett, celebrated his 83rd birthday last August. When he dies, or if he becomes incapacitated, the stock is vulnerable to a sudden and severe downturn....
Vanguard Information Technology ETF, $92.36, symbol VGT on New York (Shares outstanding: 54.8 million; Market cap: $5.1 billion; personal.vanguard.com), aims to track the MSCI U.S. Investable Market Information Technology Index, which mainly consists of large U.S. companies in the IT area. The fund’s MER is just 0.14%. The $5.3-billion fund’s top 10 holdings are Apple, Google, Microsoft, IBM, Cisco Systems, Intel, Facebook, Oracle, Qualcomm and Visa. The ETF is broken down by segment as follows: Internet software and services (18.2%), hardware (14.4%), systems software (13.7%), chips (10.4%), data processing and outsourced services (10.2%), communications equipment (8.8%), consulting and other services (8.1%), applications (6.3%), storage and peripherals (3.3%), computer chip equipment (1.8%), components (1.7%), manufacturing services (1.4%), equipment and instruments (1.1%), distributors (0.7%) and home entertainment software (0.6%)....
SPDR DOW JONES INDUSTRIAL AVERAGE ETF $163.35 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average.
The SPDR Dow Jones ETF’s top holdings are Visa, IBM, Goldman Sachs Group, ExxonMobil, Chevron, 3M, McDonald’s, Caterpillar, United Technologies and Boeing. The fund’s expenses are about 0.17% of its assets.
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