GARMIN $32.31, symbol GRMN on Nasdaq, rose as much as 26% this week, to $34, before slipping back to today’s price. The jump was caused by quarterly results that beat consensus estimates. In the three months ended June 30, 2009, Garmin’s earnings per share, excluding one-time items, fell 30.3%, to $0.83 from $1.19 a year earlier. Despite the drop, this was much higher than the $0.51 that analysts were expecting. Sales fell 27%, to $669.1 million from $911.7 million, but this was still better than the $657.1 million that was predicted. Garmin is a dominant maker of navigation devices that use the global-positioning system (GPS). It makes 80% of its sales from consumer products, like hand-held GPS receivers, portable navigation devices for use in cars, and fixed-mount GPS systems that are used in cars and boats. The company gets the other 20% of its sales from GPS- and VHF-enabled receivers that are used in aircraft....

INTERNATIONAL BUSINESS MACHINES CORP., $117.93, New York symbol IBM, announced this week that it will buy SPSS Inc. (Nasdaq symbol SPSS). Chicago-based SPSS makes software that analyzes sales and other data. This helps its clients predict how their customers will react to such things as price changes and new advertising campaigns. IBM will pay $1.2 billion for SPSS when the deal closes later this year. To put the purchase price in context, IBM earned $3.1 billion, or $2.32 a share, in the three months ended June 30, 2009. That’s up 12.2% from $2.8 billion, or $1.97 a share, a year earlier. Revenue fell 13.3%, to $23.25 billion from $26.8 billion. IBM gets 65% of its revenue from overseas markets, and the high U.S. dollar hurts the value of their contribution. However, IBM gets roughly 80% of its revenue from selling computer services and software. These generate higher profit margins than computer hardware. That’s why its earnings rose despite the lower revenue....

RDM CORP., $1.05, symbol RC on Toronto, reports that its revenue rose 13.4% in the three months ended June 30, 2009, to $5.9 million from $5.2 million a year earlier. The company earned $175,000, or $0.01 a share, compared to a loss of $298,000, or $0.01 a share. RDM sells software and hardware for electronic-payment processing, mainly in the United States. Its Image & Transaction Management System lets banks scan all types of cheques, and then route them to any location for immediate processing. The company benefits from the recurring nature of its payment-processing-services revenue. In the latest quarter, this jumped 47%, to $2.5 million from $1.7 million a year earlier. Transaction volumes for RDM’s Image & Transaction Management System averaged 3.8 million items per week, up 36% from 2.8 million....

H&R Block’s tax-preparation business has seen less traffic as more tax filers switch to do-it-yourself software. While the company’s own software is selling well, it generates fewer profits than serving clients directly. That’s partly why the stock is down 40% from the $28 it reached in September 2008. However, tax software works best for those with simple tax situations, and upcoming changes to the U.S. tax code should prompt more people to seek professional advice. As well, the company recently sold its mortgage and brokerage businesses. This lowers its volatility. H&R BLOCK INC. $17 (New York symbol HRB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 334.1 million; Market cap: $5.7 billion; Price-to-sales ratio: 1.4; WSSF Rating: Above Average) is the world’s largest provider of income-tax-preparation services. It operates 12,923 offices in the U.S., as well as 1,193 in Canada and 378 in Australia. Franchisees own 34% of H&R Block’s U.S. tax-preparation offices. The tax-services division accounts for 74% of the company’s revenue. The company gets 22% of its revenue by selling tax-consulting and accounting services to businesses though subsidiary RSM McGladrey Inc. The remaining 4% comes from banking services, including chequing accounts, loans and credit cards that H&R Block issues to its tax-preparation clients....

Growth by acquisition is a risky strategy, but wisely chosen takeovers can bring big gains. Here are two that make sense to us. INTERNATIONAL BUSINESS MACHINES CORP. $117 (New York symbol IBM; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.3 billion; Market cap: $152.1 billion; Price-to-sales ratio: 1.6; WSSF Rating: Above Average) will buy SPSS Inc. (Nasdaq symbol SPSS), whose software helps companies predict changes in customer buying habits and other trends. The price is $1.2 billion, or about 39% of IBM’s second quarter 2009 earnings. IBM is a buy....

The proposed “cap-and-trade” bill making its way through the U.S. Congress aims to limit the amount of greenhouse gases (particularly carbon dioxide) that companies can emit. This will almost certainly drive up their costs. However, many businesses stand to profit as consumers look for ways to cut their energy use. We’ve examined three below. While all are leaders in “green” technologies, only two are buys right now. TOYOTA MOTOR CO. ADRs $83 (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.6 billion; Market cap: $132.8 billion; Price-to-sales ratio: 0.6; WSSF Rating: Above Average) recently overtook General Motors as the world’s largest carmaker. That was partly due to its success with gasoline-electric hybrid cars. Toyota started selling its Prius mid-sized hybrid car in 1997, and now dominates this market. Besides the Prius, the company has launched hybrid versions of its larger cars and trucks. Hybrids account for less than 10% of Toyota’s sales, but they generate much higher profit margins than its gasoline-powered cars. The company owns patents on over 2,000 hybrid-engine parts. That makes it difficult for other carmakers to develop their own hybrids. As a result, many have licensed the technology from Toyota. This generates royalty income for the company....

NEWMONT MINING CORP. $39 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 490 million; Market cap: $19.1 billion; Price-to-sales ratio: 3.4; WSSF Rating: Average) earned $213 million, or $0.43 a share, in the three months ended June 30, 2009. That’s down 3.6% from the $221 million, or $0.50 a share, it earned the previous year. The latest figures exclude one-time costs related to Newmont’s purchase of the remaining one-third interest in Australia’s Boddington gold mine. Revenue rose 6.6%, to $1.6 billion from $1.5 billion. Gold sales (86% of revenue), rose 4%, as Newmont’s realized gold price climbed 1.7%. Copper sales (14% of revenue) rose 25% as higher production offset a 39% drop in prices. Newmont’s revenue should continue to rise in the second half of 2009, as Boddington reaches full production. (The mine officially opened on July 23.) The company is also doing a good job of lowering its production costs. Newmont is a buy.

WAL-MART STORES INC. $49 (New York symbol WMT; Conservative Growth Portfolio; Consumer sector; Shares outstanding: 3.9 billion; Market cap: $191.1 billion; Price-to-sales ratio: 0.5; WSSF Rating: Above Average) uses its clout as the world’s largest retailer to pry big price discounts from its suppliers. The company is also putting pressure on its suppliers to help it pursue several “green” initiatives aimed at improving its image and sales. For example, Wal-Mart now wants its suppliers to put an “eco-rating”on all groceries it sells. These would make it easier for consumers to compare the environmental impact of various products. Like nutritional labels, Wal-Mart hopes these ratings will become an industry standard. The plan will add to suppliers’ costs, which means they will likely resist, at least at first. But most will probably comply rather than risk losing Wal-Mart as a customer. Wal-Mart is a buy.

Most power plants are located near big cities to keep transmission costs down. However, wind farms tend to be in remote areas with steady winds. Growth in wind power will force utilities to expand their electrical-power grids. That should lead to higher sales for transmission-equipment suppliers, such as General Electric and ABB. GENERAL ELECTRIC CO. $12 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.6 billion; Market cap: $127.2 billion; Price-to-sales ratio: 0.8; WSSF Rating: Above Average) is one of the world’s largest makers of industrial equipment. Products include aircraft engines, medical-imaging scanners and locomotives. GE is also a major supplier of electrical infrastructure equipment, such as turbines, voltage regulators and fuses. These accounted for 21% of its 2008 revenue, and 23% of its profit. Moreover, as a leading maker of windmills and nuclear-power plants, GE is in a good position to profit from new environmental rules that limit greenhouse-gas emissions....

AMERICAN EXPRESS CO. $28 (New York symbol AXP; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $33.6 billion; Price-to-sales ratio: 1.2; WSSF Rating: Average) reports that 4.4% of its U.S. cardholders were behind in their payments in the second quarter of 2009....