Toronto-Dominion Bank continues to gain from an improving U.S. economy, while the weak Canadian dollar enhances earnings from that market.
The bank has expanded its position in the U.S., with more branches there than in Canada. TD’s U.S. business also helps to offset higher loan losses because of the slowdown in Canada’s oil industry. Its shares are now close to all-time highs—and we think they will move even higher.
TD BANK (Toronto symbol TD; www.td.com) is Canada’s largest bank, with $1.1 trillion in assets. It operates 1,265 branches in the U.S.—compared to 1,152 in Canada—and owns 41.01% of TD Ameritrade (New York symbol AMTD), a leading online brokerage.
Canada’s true blue chip stocks
To profit most with the least risk, buy blue chip stocks, says Pat McKeough. His new report shows how you how and where to find the blue chips that make the strongest contribution to a growing portfolio. And he identifies 7 of his top blue chip recommendations.
TD’s revenue stood at $8.3 billion for the second quarter ended April 30, 2016. That’s a 6.4% increase from the $7.8 billion a year earlier. Earnings per share rose 5.3%, to $1.20 from $1.14.
Earnings from U.S. banking (30% of the total) jumped 21.0% thanks to the higher U.S. dollar and stronger loan demand. Partly offsetting that was the $584 million TD set aside to cover any future loan losses. It was up 55.7% from $375 million a year ago.
Blue Chip Stocks: Oil and gas producers less than 1% of portfolio
Low oil and gas prices could hurt the ability of energy producers to repay their loans. However, those borrowers now represent less than 1% of TD’s overall loan portfolio.
The stock trades at 11.7 times the bank’s forecast earnings of $4.90 a share for fiscal 2016. It yields 3.8%
We think conservative investors can hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus.
The best ETFs offer very low management fees and well-diversified, tax-efficient portfolios of high quality stocks.
Here’s a look at two international ETFs we see as buys:
ISHARES MSCI EMERGING MARKETS INDEX FUND (New York symbol EEM; buy or sell through brokers) aims to track the MSCI Emerging Markets Index.
The simple secret to success in ETFs
Here’s the secret to making the most of ETFs in your portfolio. Know the difference between the original, easy-to-understand ETFs and complex hybrids created for the greater profit of the investment industry. Pat McKeough explains it all in this new report and recommends 11 ETFs for a stronger portfolio.
The fund’s geographic breakdown includes China, 24.0%; South Korea, 15.3%; Taiwan, 12.8%; India, 8.0%; South Africa, 6.4%; Brazil, 5.7%; Mexico, 4.6%; Russia, 3.7%; Malaysia, 3.5%; Indonesia, 3.0%; Thailand, 2.3%; and Turkey, 1.5%.
Its top holdings are Samsung Electronics (South Korea), 3.4%; Taiwan Semiconductor (computer chips), 3.4%; Tencent Holdings (China: Internet), 3.2%; China Mobile, 2.0%; Naspers (South Africa: media and Internet), 1.6%; China Construction Bank, 1.5%; Industrial & Commercial Bank of China, 1.1%; and Hon Hai Precision (Taiwan), 1.0%.
iShares launched the ETF on April 7, 2003. Its expense ratio is 0.70%.
Emerging markets are still more volatile and vulnerable to economic downturns than developed nations. But this fund’s broad diversification among these 12 countries tones down its risk.
Recommendation in Canadian Wealth Advisor: BUY for aggressive investors.
ISHARES MSCI AUSTRALIA ETF (New York symbol EWA; buy or sell through brokers) is an ETF that holds 73 major Australian stocks.
The fund’s top holdings include Commonwealth Bank of Australia, 11.3%; Westpac Banking Corp., 8.6%; Australia and New Zealand Banking Group, 6.3%; National Australia Bank, 6.0%; BHP Billiton, 5.2%; CSL Ltd., 4.5%; Wesfarmers, 3.9%; Woolworths Ltd., 2.4%; Scentre Group, 2.1%; and Telstra Corp., 2.0%.
The ETF’s industry breakdown consists of Financials, 52.2%; Mining, 12.8%; Consumer Staples, 7.8%; Health Care, 6.6%; Industrials, 6.6%; Energy, 4.8%; Utilities, 2.7%; Telecommunications, 2.7%; and Consumer Discretionary, 2.4%.
The iShares MSCI Australia ETF was launched on March 12, 1996. It has a 0.48% expense ratio.
Australia benefits from its stable banking and political systems. It is also rich in natural resources. While low commodity prices have hurt the country’s economy, its proximity to Asian markets, including India and China, gives it strong long-term prospects.
BSM Technologies doubled its sales in the last quarter through its purchase of software company Webtech. At the same time, the GPS service provider expanded research spending to better retain its clients—the biggest transportation companies in North America.
BSM TECHNOLOGIES INC. (GPS on Toronto, www.bsmwireless.com) makes equipment and software that helps owners of truck, train and other fleets monitor those vehicles using global positioning system (GPS) technology.
Customers typically purchase the hardware for an upfront payment, and then enter into a long-term contract for software updates and monitoring services. Recurring revenue from servicing contracts provide two-thirds of BSM’s total revenue.
Spectacular gains with the right penny stock
You can hit spectacular gains with the right penny stock—but it’s going to be one among many that fail. Pat McKeough shows you to reap the rewards by reducing your risks. Your free complete guide to investing in Canadian penny stocks is ready to read now.
The U.S. accounts for 54% of its sales, followed by Canada (44%) and other countries (2%).
BSM’s revenue fell 4.4%, from $14.5 million in 2011 to $13.8 million in 2012 (fiscal years end September 30). Thanks to more subscribers and acquisitions, revenue improved to $19.2 million in 2013, and jumped to $30.7 million in 2015.
Earnings soared from $578,000 in 2011 to $1.5 million in 2012. The company sold shares to fund its expansion, and as a result, earnings per share fell from $0.24 to $0.05. Earnings then jumped to $0.29 a share (or a total of $9.5 million) in 2013. Writedowns and restructuring costs then cut BSM’s earnings to nil per share (or $17,000) in 2015.
On September 30, 2015, the company acquired Webtech Wireless for $49.9 million in cash and stock. Webtech makes software that compiles and analyzes GPS data. This helps fleet managers comply with transport regulations and improve the fuel efficiency and driver safety record of their operations.
BSM shareholders now own 51% of the merged company; Webtech investors hold the remaining 49%.
Thanks to this purchase, the company’s revenue in the quarter ended March 31, 2016, jumped 99.3%, to $15.2 million from $7.6 million a year earlier. Due to the cost of integrating Webtech and higher marketing expenses, BSM lost $858,000, or $0.01 a share. A year earlier, it earned $843,000, or $0.02.
Research costs in the quarter also jumped, 45.7%, to $2.1 million (or 13.6% of revenue) from $1.4 million (18.7%).
The company can afford to keep investing in its operations. As of March 31, 2016, it held cash of $22.4 million, or $0.28 a share. Its long-term debt of $6.7 million is a low 8% of its market cap.
BSM will probably lose $0.01 a share in fiscal 2016. However, its earnings could rise to $0.03 a share in 2017. The stock trades at 37.7 times that forecast.
The company has some speculative appeal. Demand for GPS monitoring services is growing fast as the technology helps businesses cut their costs. Moreover, many of BSM’s clients are reluctant to switch providers due to the difficulty of transferring their data to a new platform. That should allow the company to hold on to its current customers while adding new ones. BSM’s clients now include six of the seven North American class I railroads (such as CN Rail, CP Rail and Norfolk Southern) and dozens of class II and class III railroads.
BSM Technologies is okay to hold for aggressive investors.
TSI Network recommendation: HOLD for aggressive investors
Revenue from the purchase of a Colombian utility should help this ‘green’ power generator sustain—or increase—its shareholder payouts.
BROOKFIELD RENEWABLE PARTNERS L.P. (Toronto symbol BEP.UN; www.brookfieldrenewable.com) owns 207 hydroelectric generating stations, 37 wind farms and five natural gas-fired plants. In all, it has over 7,284 megawatts of generating capacity.
Roughly 24% of that power is in Canada, with another 53% in the U.S., 15% in Latin America and 8% in Europe.
How to succeed with energy stocks today
Even with a partial recovery in oil prices, do energy stocks belong in your portfolio? Absolutely, says Pat McKeough, and he tells you why in his new free report. Plus you get a survey of all energy stocks, including power generation, alternative and nuclear energy. You’ll find some surprising conclusions—don’t miss this recently-released report.
In the three months ended March 31, 2016, Brookfield’s cash flow per share rose 21.4%, to $0.68 U.S from $0.56 a year earlier. Above-normal rainfall pushed up its hydroelectric output.
Energy Stocks: Brookfield to pay $625 million for Isagen stake
The company is part of the consortium this is buying Isagen SA from the Colombian government. Isagen owns six hydroelectric plants and is Colombia’s third-largest power generator. Brookfield will end up with a 25% stake for $625 million U.S.
Investing in Latin America entails above-average political and currency risk. But it lets the company buy high-quality assets at distressed prices.
Brookfield trades at 12.0 times its forecast 2016 cash flow of $2.43 U.S. a share. It yields 6.1%.
Pat McKeough recently replied to a member of his Inner Circle asking for an opinion on Northland Power Inc.The ‘green’ energy supplier is expanding its capacity with wind farms and help from government contracts, says Pat.
Q: Pat: I am interested in your views on Northland Power. Regards.
A: NORTHLAND POWER INC. (symbol NPI on Toronto; www.northlandpower.ca) develops, builds, owns and operates natural gas-fired power plants, wind farms, solar projects and hydroelectric facilities.
The company converted to a corporation from an income trust on January 1, 2011.
Northland owns or has stakes in 1,338 megawatts of generating capacity, with an additional 692 megawatts under construction.
Must reading for your financial well-being
Whether you look after your own investments or have someone else do it, this new report is essential reading. Four decades of first-hand experience have gone into Pat McKeough’s comprehensive new report “Wealth Management and Retirement Planning”. It’s ready to for you to read now.
One of these developments is Project Gemini, in which the company holds a 60% stake (purchased in May 2014). The operation is a $4.1 billion wind farm in the North Sea, off the coast of the Netherlands. It should generate 600 megawatts (360 megawatts net to Northland) when it starts up in 2017.
Gemini has a 15-year deal to sell its power to the Dutch government. That cuts the investment’s risk.
As well, Northland owns 85% of the Nordsee wind project, also in the North Sea—40 kilometres off the German coast. RWE AG, a leading utility company, owns the remaining 15%.
This project’s first phase, Nordsee One, is a 332-megawatt (282 megawatts net to Northland) wind farm. It will cost $1.8 billion to build, and has a 10-year deal to sell its power under Germany’s feed-in tariff program. Operations should begin by the end of 2017.
Northland plans to build two additional phases over the next decade, Nordsee Two and Nordsee Three, when it wins subsidies from the German government. Together, these last two projects would produce 670 megawatts.
The long-term outlook for all three phases is positive. Germany wants to reduce its use of nuclear power and expects to get 35% of its electricity from renewable sources by 2020. The goal is to raise that to 85% by 2050.
Thanks to new power projects and acquisitions, Northland’s revenue rose 104.5%, from $356.1 million in 2011 to $728.1 million in 2015.
Cash flow soared 232.1%, from $54.9 million in 2011 to $182.2 million in 2015. The company sold shares to finance its construction projects. As a result, cash flow per share fell 22.5%, from $0.71 in 2011 to $0.55 in 2012. Cash flow per share then improved to $1.05 in 2013, and rose to $1.10 in 2014. It dropped to $0.99 in 2015.
In the three months ended March 31, 2016, Northland’s revenue fell 11.6%, to $178.1 million from $201.6 million a year earlier. Cash flow declined 10.7%, to $44.9 million from $50.2 million; cash flow per share fell 21.2%, to $0.26 from $0.33, on more shares outstanding.
Northland needs to successfully complete its new projects to increase its revenue and cash flow. Still, its operations are spread across four separate regulatory areas, which limits its risk. Its long-term contracts also give it stability.
The company pays monthly dividends of $0.09 a share, for a 4.9% annualized yield. In the latest quarter, dividends accounted for 103% of its cash flow, up from 81% a year earlier. However, under the company’s dividend reinvestment plan, some investors choose shares instead of dividends so its cash payout ratio for the quarter was a more-reasonable 81%.
The stock trades at 21.5 times this year’s forecast cash flow per share of $1.02.
The low Canadian dollar boosted revenue for Chemtrade Logistics Income Fund in the last quarter and should help to keep cash flow and unitholder payouts steady.
CHEMTRADE LOGISTICS INCOME FUND (Toronto symbol CHE.UN; www.chemtradelogistics.com)is one of North America’s largest providers of removal services for oil refineries, base metal processors and other firms creating by-products such as acids and sulphur. Chemtrade converts these substances to useful chemicals like sulphuric acid. It then sells these to customers in a variety of industries.
The accelerating power of dividends
Dividends can turn an average portfolio into a strong, fast-growing one. Over the years, Pat McKeough has shown how to use high quality dividend stocks to add tremendous earning power. Now, Pat shows you how to make it work for you in his complete guide to dividend investing. It’s ready to download and read now.
In the three months ended March 31, 2016, the trust’s revenue rose 3.1%, to $336.1 million from $326.0 million a year earlier. The gain mainly came from the lower Canadian dollar, which increased the value of Chemtrade’s sales in the U.S.
Cash flow fell 6.8%, to $42.3 million, or $0.61 a share, from $45.4 million, or $0.66 a share. Temporary problems at two of the company’s suppliers pushed up production costs for its chemicals.
Dividend Stocks: Cash flow supports monthly $0.10 distribution
Chemtrade’s long-term debt is a high $805.6 million, or 67% of its $1.2 billion market cap. Most of that stems from its $900 million all-cash purchase of General Chemical in January 2014.
General makes a range of chemicals, including aluminum sulphate, aluminum chlorohydrate and ferric sulphate (all of which are used in water treatment). It also produces ingredients for prescription drugs and nutritional supplements. Even though its debt is high, Chemtrade’s steady cash flow will help to pay it down. Cash flow should also keep the trust’s distribution safe: its monthly payout is $0.10 a unit, for a high 6.8% yield.
A simplified menu and plans to lower operating costs will allow the fast-food giant to increase both buybacks and dividends.
The fast-food industry faces several long-term challenges. These include the consumer shift to more nutritious foods and new laws to increase minimum wage rates.
McDonald’s has a history of adapting to changing trends. The new plan is to increase sales through better food and customer service. It’s already paying off. The company is also cutting its costs by transferring more of its outlets to franchisees.
The best of Canada’s blue chip stocks
Build your portfolio with blue chip stocks and you can profit most, with the least risk. But which blue chips? Pat McKeough’s new report shows how to find the true blue chips that make the longest and strongest contribution to a growing portfolio. And he identifies 7 of his top blue chip recommendations.
McDonald’s will use most of the savings for share buybacks and dividends. That should continue to push the stock higher.
MCDONALD’S CORP. (New York symbol MCD; www.mcdonalds.com) is the world’s largest operator of fast-food restaurants, with 36,500 outlets in 120 countries. It serves a wide variety of food, but is best known for its hamburgers and french fries.
The company’s sales rose 4.1%, from $27.0 billion in 2011 to $28.1 billion in 2013. Sales then fell to $27.4 billion in 2014, and to $25.4 billion in 2015.
The recent decline was mainly due to stronger competition from from new fast food chains such as Chipotle and Shake Shack. The higher U.S. dollar has also hurt the contribution of McDonald’s international outlets. They supply two-thirds of total sales.
Earnings fell 0.7%, from $5.50 billion in 2011 to $5.46 billion in 2012. The company is an aggressive buyer of its own shares, so per-share earnings rose 1.7%, from $5.27 to $5.36. Earnings improved to $5.55 a share (or a total of $5.6 billion) in 2013. However, earnings then fell to $4.82 a share (or $4.8 billion) in 2014, and to $4.80 a share (or $4.5 billion) in 2015.
In response to slowing sales, McDonald’s has simplified its menus. That has helped speed up service, particularly at its popular drive-through locations. The company has also launched successful new products, such as premium coffees.
In addition, McDonald’s is improving the quality of its foods. This includes a complete switch to cage-free eggs in the U.S. and Canada by 2025. The company purchases about two billion eggs in the U.S. annually for its Egg McMuffins and other products, and its Canadian business buys roughly 120 million.
McDonald’s also plans to sell 4,000 company owned outlets to franchisees. As a result, those partners will operate 95% of the chain’s restaurants by 2018, up from 80% today. This will lower the company’s operating expenses, and free it from maintaining and upgrading these outlets.
Another part of the growth strategy involves cutting $500 million a year in administrative costs starting in 2017. That’s $200 million more than McDonald’s earlier goal. These initiatives are starting to work. In the three months ended March 31, 2016, the company’s sales fell 0.9%, to $5.9 billion from $6.0 billion. However, excluding exchange rates, sales gained 3%. Overall same-store sales rose 6.2%.
In the U.S., same-store sales improved 5.4%. That’s mainly due to the success of new all-day breakfast offerings and the McPick 2 value menu.
Same-store sales also gained 5.2% at McDonald’s International Lead markets (developed countries such as Canada, Australia, the U.K., France and Germany).
As well, same-store sales at its High Growth Markets (including China, Italy, Korea, Poland, Russia, Spain, Switzerland and the Netherlands) rose 3.6%.
Earnings in the quarter rose 35.4%, to $1.1 billion from $811.5 million a year earlier. Earnings per share gained 46.4%, to $1.23 from $0.84, on fewer shares outstanding. If you exclude unusual items, earnings per share rose 26%. The company plans to add 500 new restaurants in 2016. Including upgrades to existing locations, it expects to spend $2.0 billion on these projects.
Over the next five years, McDonald’s also plans to open 1,500 new restaurants in China, Hong Kong and South Korea. It currently has 2,800 outlets in these markets.
The new restaurants will allow the company to profit from Asia’s population growth. Moreover, people in the region are moving to bigger cities.
McDonald’s sound balance sheet will support its expansion plans. Its long-term debt of $23.4 billion (as of March 31, 2016) is a moderate 22% of its market cap. It also held cash of $3.3 billion, or $3.77 a share.
The company’s $3.56 a share dividend yields 2.9%. McDonald’s has increased the payout each year since it began paying dividends in 1976.
Rising dividends are part of McDonald’s plan to spend $30 billion on dividends and share buybacks between 2014 and 2016. It has already spent $20.3 billion as of March 31, 2016.
In the U.S., the company expects its ingredient costs will fall 3.5% to 4.5% this year. That will help offset the negative impact of currency exchange rates.
As a result, McDonald’s earnings for all of 2016 should rise to $5.45 a share. The stock trades at 22.6 times that estimate. That’s an acceptable multiple in light of McDonald’s new growth plan and well-known brands. The stock also trades at a more reasonable 20.3 times its projected 2017 earnings of $6.05 a share.
Recommendation in Wall Street Stock Forecaster: BUY
Amerigo Resources will nearly double its copper output this year at the same time it dramatically cuts its production costs.
AMERIGO RESOURCES (Toronto symbol ARG; www.amerigoresources.com) processes copper and molybdenum from the waste rock of the El Teniente mine in Chile; that’s the world’s largest copper operation.
In the quarter ended March 31, 2016, Amerigo’s copper production jumped 45.0%, to 12.86 million pounds, at a cost of $1.82 per pound. A year earlier, output was 8.86 million, at a cost of $2.33 a pound.
Cash flow rose 21.7%, to $1.4 million, or $0.008 a share, from $1.2 million, or $0.007 a share. The gains came because the company started processing tailings from its new Cauquenes deposit in late 2015.
Finding the few hidden gems in penny stocks
You can hit spectacular gains with the right penny stock—but it will be one among many that fail. Pat McKeough shows you how to reduce the risks in order to reap the rewards. Your complete guide to investing in Canadian penny stocks is ready to download now.
Penny Stocks: Cauquenes expansion will cost $140 million
Cauquenes is a big growth project: Amerigo expects it to help double its production in 2016, to 90 million pounds of copper. Phase 1 is now in operation at a rate of 30,000 tonnes per day, and Amerigo expects that to rise to 60,000 by the end of this year, bringing the company’s overall output to over 70 million pounds of copper annually.
The Cauquenes expansion will cost $140 million in total. However, Amerigo has used its cash flow to pay off all of its debt over the last few years, and it currently holds cash of $18.3 million. This gave it the flexibility to arrange bank financing in Chile for Cauquenes.
Copper prices have fallen from over $4.50 U.S. a pound at the start of 2011 to just $2.09 today. In the near term, the metal’s outlook is uncertain. But longer term, an improving global economy and unsteady supply should push copper prices higher.
Recommendation in Stock Pickers Digest: BUY for aggressive investors.
Weak oil prices increased earnings for Buckeye Partners as oil producers looked to store their crude and wait for a rebound. The pipeline company is also bucking an industry trend by raising its quarterly distribution.
BUCKEYE PARTNERS L.P. (New York symbol BPL; www.buckeye.com)operates 9,700 kilometres of pipelines in the northeastern and Midwestern U.S. Its network pumps gasoline, jet fuel and other petroleum products.
In the past few years, Buckeye has steadily expanded its oil storage operations. It now has 117 terminals in the U.S. with a total capacity of 55.6 million barrels.
NEW! How to get ahead in energy stocks today
Even with oil prices rising, do energy stocks belong in your portfolio? Absolutely, says Pat McKeough, and he tells you why in his new free report. Plus you get a complete survey of all energy stock, including alternative and nuclear energy. You’ll find some surprising conclusions—don’t miss this just-released report.
The company also owns seven marine storage terminals that serve ocean-going oil tankers in New York City, Corpus Christi, Texas, Puerto Rico, St. Lucia and The Bahamas. These facilities have a combined capacity of 62.3 million barrels.
Due to the recent weakness in oil prices, many producers are opting to store their crude while they wait for prices to recover.
As a result, Buckeye’s marine terminals operated at 99% capacity in the three months ended March 31, 2016. That helped push up its revenue from storage and transportation services (51% of total revenue) by 13.8% from a year earlier. However, weaker volumes and prices cut revenue from the sale of oil products (49%) by 48.0%. That caused Buckeye’s overall sales in the quarter to decline 28.3%, to $780.6 million from $1.1 billion.
Thanks to higher margins from the storage operations, earnings jumped 17.5%, to $131.1 million from $111.6 million. Earnings per unit gained 14.8%, to $1.01 from $0.88, on more units outstanding.
Buckeye recently increased its quarterly distribution by 1.1%, to $1.20 a unit from $1.1875. The new annual rate of $4.80 yields 6.6%. Distributions accounted for 87.9% of its cash flow in the latest quarter.
The partnership’s sound balance sheet will let it continue to keep raising its distributions and investing in its operations. As of March 31, 2016, its long-term debt of $3.7 billion is a manageable 39% of its market cap. It also held cash of $5.7 million.
Buckeye trades at a reasonable 17.9 times the $4.08 a unit that it will probably earn in 2016.
Recommendation in Wall Street Stock Forecaster: BUY
Pat McKeough recently replied to a member of his Inner Circleasking for an opinion on Stella-Jones Inc. The niche lumber specialist has seen its sales, earnings and share price jump over the last four years. But acquisitions have driven that growth, says Pat.
Q: Pat: Could I please have your recommendation on Stella-Jones? Thank you.
A: STELLA-JONES INC. (symbol SJ on Toronto; www.stella-jones.com) makes pressure-treated wood products. They include: railway ties (45% of sales); utility poles (34%); treated lumber products for the residential market (12%); lumber for industrial uses such as construction timbers and highway guardrails (6%); and logs and lumber (3%).
NEW: The key to success in ETFs
Our new report holds the key to making the most of ETFs in your portfolio. The secret: know the difference between the original, easy-to-understand ETFs and complex hybrids created for the greater profit of the investment industry. Pat McKeough explains it all in this just-released report and recommends 11 ETFs for a stronger portfolio.
The company gets most of its utility poles from timberlands that it leases in Quebec and B.C. It also buys wood for railway ties and other products from sawmills in the U.S. and Canada.
The U.S. also provides 82% of its sales, while Canada supplies the remaining 18%.
Stella-Jones’s sales jumped 139.3%, from $651.6 million in 2011 to $1.6 billion in 2015. Earnings soared 153.9%, from $55.7 million to $141.4 million. Due to more shares outstanding, earnings per share rose at the slower pace of 134.5%, from $0.87 to $2.04 (all per-share amounts adjusted for a 4-for-1 stock split in October 2013).
The gains are mainly due to acquisitions. In 2015, Stella-Jones spent over $62.6 million buying related businesses. The biggest was its $44.9-million purchase of Ram Forest Group Inc. and Ramfor Lumber Inc. Together, they operate wood treatment facilities in Ontario. The purchases expanded the company’s presence in the residential lumber market.
In the three months ended March 31, 2016, Stella-Jones’ sales jumped 23.6%, to $421.0 million from $340.7 million a year earlier. The Ram Forest purchase contributed $9.3 million to those recent sales. Overall earnings gained 16.3%, to $35.0 million from $30.1 million; fewer shares outstanding meant per-share earnings rose 18.6%, to $0.51 from $0.43.
Even after its recent acquisitions, the company’s balance sheet remains sound. It has no cash, but its long-term debt of $571.4 million is a moderate 17% of its market cap.
A growth-by-acquisition strategy adds risk for Stella-Jones. However, it’s an established leader in the niche markets of utility poles and railway ties. The company also stands to gain as North American power companies upgrade their transmission and distribution grids.
The shares are up almost 400% over the last five years. They trade at 19.1 times the company’s forecast 2016 earnings of $2.56 a share. The $0.40 dividend yields 0.8%.
Stella-Jones is okay to hold, but only for aggressive investors.
Inner Circle recommendation: HOLD for aggressive investors
Learn everything you need to know in
'How to Find the Best Growth Stocks'FREE Special Report from The Successful Investor.
Canadian Growth Stocks:
CGI Group, CAE Inc., Fortis Inc. Stock and more.
Get Your FREE Report Now:
How to Find the Best Growth Stocks
X No, thanks. I don’t want to make big profits from growth stocks.
Privacy Policy and Terms of Use
The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
This privacy policy is applicable to all TSI Network Visitors, Clients, Employees, Suppliers, Web sites, Management, and all other interested parties. Any links to or from our site are not covered by this policy. We encourage you to read the privacy policies of every site that you visit.
The privacy of the site/store visitor is very important to TSI Network, and is respected at all times. The information we receive from customers helps us to personalize and continually improve your online experience at TSI Network.
We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
We store subscriber and password files containing personal information securely. These files are stored in secure areas that are not accessible to the general public. We are always working to ensure the security of your personal information.
We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
Automatic Information: We receive and store certain types of information whenever you interact with us. For example, like many websites, we use "cookies," and we obtain certain types of information when your web browser accesses TSI Network.
Information from Other Sources: For reasons such as improving personalization of our service (for example, providing better product recommendations or special offers that we think will interest you), we might receive information about you from other sources and add it to our account information. We also sometimes receive updated delivery and address information from our shippers or other sources so that we can correct our records and deliver your next purchase or communication more easily.
We do reserve the right, however, to collect and perform statistical analyses of the internet traffic to our website for our internal use. However, information collected does not allow us to identify any individual, and will not collect any personal information of the visitor. Furthermore, we do not sell, rent or loan to any outside parties the information collected and analyzed.
Although you may be able to access some of our websites without being required to register or provide personal information, certain websites and sections of our websites may require registration. In addition, if you choose to contact us to ask a question, we will collect your personal information so that we can respond to your question.
To make the visitor’s experience on our website easier, we may use per-session “cookies” (session identifiers) to track the state of the visitor session. This “cookie” is destroyed when your session with our website is over.
Cookies are alphanumeric identifiers that we transfer to your computer's hard drive through your web browser to enable our systems to recognize your browser and to provide features like "Remember Me" for our paying subscribers. Cookies are also used during the ordering process to help ensure your order is handled correctly. We do not extract any information about individual users or their computers as a part of this process.
The "Help" portion of the toolbar on most browsers will tell you how to prevent your browser from accepting new cookies, how to have the browser notify you when you receive a new cookie, or how to disable cookies altogether. However, cookies allow you to take full advantage of some of TSI Network's most useful features, and may be required to access certain areas of our website.
Internet Protocol (or IP) addresses are collected for all visitors to this site. This information is used for the purposes of traffic analysis.
Does TSI Network Use the Information It Receives?
"Contact Us" and Comment Features: TSI Network encourages visitors to its websites to contact us with questions and comments. Email addresses and other information of persons using these features may be collected in order to facilitate our responses to those inquiries.
Purchases of Merchandise: TSI Network websites may offer individuals the opportunity to purchase branded or other merchandise online. In connection with those purchases, customers may be asked to submit personal information, such as shipping addresses and credit card information, which is required to complete the transaction. TSI Network may also offer a Membership program, through which purchasers of its products may receive discounts on their online purchases. Membership registration may involve the submission of personal information to TSI Network and assignment of a user ID and password.
Agents: We employ other companies and individuals to perform functions on our behalf. Examples include fulfilling orders, delivering packages, sending postal mail and email, removing repetitive information from customer lists, analyzing data, providing marketing assistance, processing credit card payments and providing customer service. They have access to personal information needed to perform their functions, but may not use it for other purposes.
Promotional Offers: We may make our postal mailing list available to organizations offering products or services that might interest you. If you prefer NOT to receive these offers, please send an email with your name and address to service@tsinetwork.ca with "Do Not Rent Name" in the subject line. We do NOT make our email list available outside our organization.
Protection of TSI Network and Others: We release account and other personal information when we believe release is appropriate to comply with law; enforce the terms of the Legal notices that accompany this policy; or protect the rights, property or safety of TSI Network, our users or others. This includes exchanging information with other companies and organizations for fraud protection and credit risk reduction.
In addition to these limited disclosures of personal information, TSI Network may provide its affiliates or unaffiliated third parties with aggregate information about visitors to our sites. For example, we might disclose the median ages of visitors to our websites, or the numbers of visitors to our websites that come from different geographic areas. Such aggregate information will not include information of any individual visitors to our websites.
TSI Network may provide personal and other information to a purchaser or successor entity in connection with the sale of TSI Network, a subsidiary or line of business associated with TSI Network, or substantially all of the assets of TSI Network or one of its subsidiaries, affiliates or lines of business.
With Your Consent: Other than as set out above, you will receive notice when information about you might go to third parties, and you will have an opportunity to choose not to share the information.
Except as provided herein, TSI Network will not sell or rent personal information about you to unaffiliated third parties.
We may disclose personal information you have provided through our websites, for the above purposes, to persons or companies that we retain to carry out and other activities for which you have registered or in which you have otherwise asked to participate. In particular, we may for these purposes transfer information to any country (including the USA and other countries which may not offer the same level of data protection as Canada). We also will disclose personal information if required by law, including compliance with warrants, subpoenas or other legal processes.
TSI Network requires persons and companies to which it discloses personal information to restrict their use of such information to the purposes for which it has been provided by TSI Network, to adequately protect the information, and not to disclose that information to others. TSI Network cannot be responsible, however, for any damages caused by the failure of unaffiliated third parties to honour their privacy obligations to TSI Network. Similarly, TSI Network is not responsible for the privacy policies and practices of other websites that are linked to our websites.
COMMENTS: TERMS OF USE
We’re always happy to receive feedback, comments and ideas from TSI Network visitors, and we encourage you to add your perspective to any issue by leaving your comments on the site.
To make sure users get the most out of the site’s comments function, we’ve provided a few guidelines:
Do not post threatening, harassing, defamatory, or libelous material.
Do not intentionally make false or misleading statements.
Do not offer to sell or buy any product or service.
Do not post material that infringes copyright.
Do not post information that you know to be confidential or sensitive or otherwise in breach of the law.
TSI Network will not accept responsibility for information posted in the comments.
Please note that we reserve the right to delete or edit all comments. As well, we may close posts to further comments at our discretion. If a user repeatedly abuses our comment policy, we may also revoke that user’s access to our comments section.
By commenting on TSI Network, you agree that you retain all ownership rights in what you post on the site, and that you will relieve us from any and all liability that may result from those postings.
Special Note for Parents
TSI Network does not sell products for purchase by children. If you are under 18, you may use TSI Network's site only with involvement of a parent or guardian
How do we protect your personal information?
TSI Network does everything possible to prevent unauthorized intrusion to its websites and the alteration, acquisition or misuse of personal information by unauthorized persons. Notably passwords submitted by users of our websites are encrypted using encryption mechanisms. However, TSI Network cautions visitors to its websites that no network, including the Internet, is entirely secure. Accordingly, we cannot be responsible for loss, corruption or unauthorized acquisition of personal information provided to our websites, or for any damages resulting from such loss, corruption or unauthorized acquisition.
How do we maintain the integrity of your personal information?
TSI Network has procedures in place to keep your personal information accurate, complete and current for the purposes for which it is collected and used. You may review the information that you have provided to us and where appropriate you may request that it be corrected. If you wish to review your personal information please send a request to: service@tsinetwork.ca.
How do I withdraw my consent to use Personal Information? Access, Correction, Inquiries and Complaints
If you wish to request access to, or correction of, your personal information in our custody or control, or find out how we've used or disclosed that information, please make your request in writing to us. We may need to verify your identity before searching for or providing you with personal information. In some circumstances, we may not be able to provide access to your personal information, for example if it contains the personal information of other persons, if it constitutes confidential commercial information, or if it is protected by solicitor-client privilege. If we deny your request for access to, or refuse a request to correct, your personal information, we will advise you of the reasons for this refusal.
If you do not want to receive promotional offers, please notify TSI Network by sending an email to service@tsinetwork.ca.
How can you ask questions about our Privacy Policy and access your personal information?
The provision of information by you is entirely voluntary and you have the right not to provide information. Subject to applicable law, you may have the right to receive certain information as to whether or not personal information relating to you is held by TSI Network and to obtain a copy of such information that is sought. You may also have the right to require information, where appropriate, to be erased, blocked or made anonymous or to have data updated or corrected. If you do not wish TSI Network to hold information about you or if you wish to have access to information, modify information, or object to any processing of information or if you have questions please contact us.
What Choices Do I Have?
As discussed, you can always choose not to provide information even though it might be needed to make a purchase or to take advantage of TSI Network features.
You can add or update certain information as explained in the section "How Can I Change My Information?"
If you do not want to receive email or other mail from us, please notify TSI Network by sending an email to service@tsinetwork.ca.
The "Help" portion of the toolbar on most browsers will tell you how to prevent your browser from accepting new cookies, how to have the browser notify you when you receive a new cookie, or how to disable cookies altogether. However, you will not be able to use important features of TSI Network sites if you do not use cookies.
Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
Legal Notices and Disclaimers
The contents of this web site and our publications are based upon sources of information believed to be reliable, but no warranty or representation, expressed or implied, is given as to their accuracy or completeness. Any opinion reflects the Successful Investor’s judgment at the date of publication and neither the Successful Investor, nor any of its affiliated companies, nor any of their officers, directors or employees, accepts any responsibility in respect of the information or recommendations contained in the publications or on this web site. Moreover, the information or recommendations are subject to change without notice.
Information presented on this web site or contained in our publications is not an offer, nor a solicitation, to buy or sell any securities referred to on the web site or in the publications. The material is general information intended for recipients who understand the risks associated with an investment in any securities referred to in the publications or on this web site. The Successful Investor has made no determination regarding whether an investment, course of action, or associated risks are suitable for the recipient.
