Updating Hart Stores Inc., Hartco Income Fund, Transcontinental Inc., and Loblaw Companies Ltd.

Article Excerpt

HART STORES INC. $5.35 (Toronto symbol HIS; Aggressive Growth Portfolio, Consumer sector; SI Rating: Speculative) has successfully expanded into Ontario, and now has 10 junior department stores there. Thanks partly to these new stores, profits in its third fiscal quarter ended October 28, 2006 rose 6.7%, to $0.16 a share from $0.15 a year earlier. Sales grew 10.0%, to $45.0 million from $40.9 million. The company should earn $0.55 a share in its current fiscal year, and the stock trades at 9.7 times that estimate. The $0.10 dividend yields 1.9%. Hart Stores is a buy. HARTCO INCOME FUND $3.10 (Toronto symbol HCI.UN; Aggressive Growth Portfolio, Consumer sector; SI Rating: Extra risk) faces growing competition from bigger retailers and online computer sellers. Ottawa’s move to tax income trusts could also make it difficult for Hartco to maintain its monthly distributions of $0.05 a unit (19.4% yield). Consequently, we’ve cut Hartco’s SI Rating from “Average” to “Extra risk”. Hartco is now looking at selling its retail business…

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