SYMANTEC CORP. $21 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 679.2 million; Market cap: $14.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 2.9%; TSINetwork Rating: Average; www.symantec.com) sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

In 2014, the company said it would split into two publicly traded firms. One would keep the Symantec name and focus on antivirus and security software and services. The other, called Veritas Technologies, makes products for data backup and recovery.

However, the company has now decided to sell Veritas to a group of private investors for $8.0 billion. It expects to close the deal on January 1, 2016.

The cash will let Symantec keep paying its $0.15-a-share quarterly dividend, which yields 2.8% on an annualized basis. The company will also add $1.5 billion to its share repurchase program, bringing the total to $2.6 billion.

Meanwhile, in its fiscal 2016 first quarter, which ended July 3, 2015, Symantec earned $275 million, or $0.40 a share, down 12.1% from $313 million, or $0.45, a year earlier.

Revenue declined 13.6%, to $1.50 billion from $1.74 billion. If you exclude the negative impact of the high U.S. dollar on the company’s overseas sales and an extra week in the year-earlier quarter, revenue was flat.

Following the Veritas sale, Symantec will probably buy smaller firms that enhance its computer security technology.

Symantec can easily afford to expand: as of July 3, 2015, it held cash of $3.9 billion, or $5.68 a share. Its total debt was $2.1 billion.

The company expects to earn $1.80 to $1.90 a share in fiscal 2016, and the stock trades at 11.4 times the midpoint of that range. That’s a low p/e ratio in light of Symantec’s high research spending. It spent 18.9% of revenue developing new products in the latest quarter.

Symantec is our #1 buy for 2015.

SYMANTEC CORP. $18.82 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 675.5 million; Market cap: $12.9 billion; Dividend yield: 3.2%) continues to strengthen its fast-growing cybersecurity business. It’s also selling its data backup and recovery operation.

In its fiscal 2016 second quarter, which ended October 2, 2015, Symantec’s earnings fell 9.3%, to $301 million, or $0.44 a share, from $332 million, or $0.48. Sales declined 7.4%, to $1.5 billion from $1.6 billion.

Businesses continue to spend heavily to protect their data from online intruders. However, sales to consumers fell as the company shifts users to a cloudbased service. That will make it easier for them to receive security updates and encourage them to renew their subscriptions. Symantec expects to complete these conversions in mid-2016.

In 2014, the company said it would split into two publicly traded firms: Symantec (security software, antivirus and services) and Veritas Technologies (products for data backup and recovery). However, the company decided instead to sell Veritas to a group of private investors. It expects to close the $7.0-billion deal early this year.

The company is forecast to earn $2.00 a share for all of fiscal 2016, and the stock trades at an attractive 9.4 times that estimate. It yields 3.2%.

Symantec is a top pick for 2016.

We’re still positive on the long-term outlook for stocks. But in a time of rising market volatility, plunging commodity prices and international tension, it’s more important than ever to diversify, rather than focus on a single pick of the year. Moreover, we find lots of attractive long-term buys among the stocks we cover.

With that in mind, we’ve chosen to highlight three picks from our Stock Pickers Digest recommendations. All three of these high-quality stocks offer strong growth prospects and trade at low multiples to earnings.

AGT FOOD & INGREDIENTS $36.50 (Toronto symbol AGT; TSINetwork Rating: Extra Risk) (604-231-1100; www.agtfoods.com; Shares outstanding: 23.8 million; Market cap: $862.3 million; Dividend yield: 1.6%) buys and processes a range of pulses—which include peas, beans, lentils and chickpeas—as well as other specialty crops.

Saskatchewan-based AGT owns 13 processing plants in Canada, nine in Turkey, four in Australia, two in the U.S., one in China and one in South Africa.

In the three months ended September 30, 2015, AGT earned $0.51 a share, up 10.9% from $0.46 a year earlier. Revenue gained 26.1%, to $362.8 million from $287.7 million. The increases came from recent acquisitions, including short-line railways and bulk loading facilities in Saskatchewan, and higher processing activity.

A big part of AGT’s success has come from its shift to more profitable products, such as ingredients and packaged foods, as opposed to simply cleaning, splitting, sorting and bagging bulk crops. Food makers use these processed ingredients in products such as baked goods, soups and beverages, as well as in pet food and animal feed.

Pulse-crop demand keeps rising for a number of reasons, including growing interest in healthier alternatives to meat and the popularity of ethnic foods, such as humus made from chickpeas. Pulses are also free of gluten and genetically modified organisms (GMOs).

The stock trades at just 15.5 times the $2.36 a share AGT is expected to earn in 2016. It yields 1.6%.

AGT Food & Ingredients is a top pick for 2016.

SYMANTEC CORP. $18.82 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 675.5 million; Market cap: $12.9 billion; Dividend yield: 3.2%) continues to strengthen its fast-growing cybersecurity business. It’s also selling its data backup and recovery operation.

In its fiscal 2016 second quarter, which ended October 2, 2015, Symantec’s earnings fell 9.3%, to $301 million, or $0.44 a share, from $332 million, or $0.48. Sales declined 7.4%, to $1.5 billion from $1.6 billion.

Businesses continue to spend heavily to protect their data from online intruders. However, sales to consumers fell as the company shifts users to a cloudbased service. That will make it easier for them to receive security updates and encourage them to renew their subscriptions. Symantec expects to complete these conversions in mid-2016.

In 2014, the company said it would split into two publicly traded firms: Symantec (security software, antivirus and services) and Veritas Technologies (products for data backup and recovery). However, the company decided instead to sell Veritas to a group of private investors. It expects to close the $7.0-billion deal early this year.

The company is forecast to earn $2.00 a share for all of fiscal 2016, and the stock trades at an attractive 9.4 times that estimate. It yields 3.2%.

Symantec is a top pick for 2016.

WESTJET AIRLINES $18.52 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 123.3 million; Market cap: $2.2 billion; Dividend yield: 3.0%) serves 100 destinations in North America, Central America, the Caribbean and Europe. Its fleet of 108 modern Boeing 737s are 30% more fuel efficient than older jets.

In June 2013, the company launched WestJet Encore, its Canadian regional airline. This business now operates 23 Bombardier Q400 NextGen turboprop planes, which seat 78 passengers.

The Canadian airline market remains highly competitive, especially with Air Canada expanding its Rouge budget airline to serve more leisure destinations in Europe, the Caribbean, Mexico and the U.S.

However, WestJet has taken delivery of its first of three Boeing 767 wide-body aircraft. That will let it compete with Air Canada internationally.

In the three months ended September 30, 2015, WestJet’s revenue rose 3.5%, to $1.05 billion from $1.01 billion a year earlier. Excluding one-time items, earnings per share gained 24.2%, to $0.82 from $0.66.

WestJet has a great hidden asset in its workforce, which refrains from unionizing in favour of directly cooperating with management. That’s a plus, because many flyers find it provides friendlier service than unionized airlines. WestJet also benefits from the fact that most of its employees are shareholders.

The company is forecast to earn $2.74 a share in 2016. The stock trades at a low 6.8 times that estimate.

WestJet is a top pick for 2016.

SYMANTEC CORP. $19 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 680.0 million; Market cap: $12.9 billion; Priceto- sales ratio: 2.1; Dividend yield: 3.2%; TSINetwork Rating: Average; www.symantec.com) said in 2014 that it would split into two publicly traded firms. One would keep the Symantec name and focus on antivirus and security software. The other, called Veritas Technologies, would focus on Symantec’s information-management business, which makes products for data backup and recovery.

However, the company instead decided to sell Veritas to the Carlyle Group (Nasdaq symbol CG) for $8.0 billion. Now Carlyle seems to be having trouble raising the funds to buy Veritas. As a result, Symantec and Carlyle have altered the deal’s terms.

Symantec will now receive $7.0 billion, including $6.6 billion in cash and $400 million in Veritas stock. It plans to complete the sale by the end of January 2016.

Of the total, Symantec plans to use $2 billion to buy back shares in the 18 months following the sale, including $500 million worth under an accelerated repurchase plan.

The sale proceeds will also let Symantec keep paying its $0.15 quarterly dividend, which yields 3.2% on an annualized basis.

Symantec was our #1 pick for 2015, and remains a buy.

SYMANTEC CORP. $19 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 680.0 million; Market cap: $12.9 billion; Priceto- sales ratio: 2.1; Dividend yield: 3.2%; TSINetwork Rating: Average; www.symantec.com) said in 2014 that it would split into two publicly traded firms. One would keep the Symantec name and focus on antivirus and security software. The other, called Veritas Technologies, would focus on Symantec’s information-management business, which makes products for data backup and recovery.

However, the company instead decided to sell Veritas to the Carlyle Group (Nasdaq symbol CG) for $8.0 billion. Now Carlyle seems to be having trouble raising the funds to buy Veritas. As a result, Symantec and Carlyle have altered the deal’s terms.

Symantec will now receive $7.0 billion, including $6.6 billion in cash and $400 million in Veritas stock. It plans to complete the sale by the end of January 2016.

Of the total, Symantec plans to use $2 billion to buy back shares in the 18 months following the sale, including $500 million worth under an accelerated repurchase plan.

The sale proceeds will also let Symantec keep paying its $0.15 quarterly dividend, which yields 3.2% on an annualized basis.

Symantec was our #1 pick for 2015, and remains a buy.

SYMANTEC CORP. $19.97 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 675.5 million; Market cap: $12.8 billion; Dividend yield: 1.5%) has completed the sale of its Veritas Technologies subsidiary to the Carlyle Group (Nasdaq symbol CG). This business makes products for data backup and recovery.

Symantec received $6.6 billion in cash ($5.3 billion after taxes). It also retained a $400 million equity stake in Veritas. Symantec has earmarked $2.3 billion of the proceeds for share repurchases it aims to complete by March 2017.

The company has also lowered its regular quarterly dividend by 50.0%, to $0.075 a share from $0.15, because of the Veritas sale. The new annual rate of $0.30 yields 1.5%. It will, however, pay a special dividend of $4.00 a share on March 22, 2016.

Symantec now focuses solely on antivirus and security software. In its fiscal 2016 third quarter, which ended January 1, 2016, revenue from its ongoing operations fell 6.3%, to $909 million from $970 million a year earlier. That still beats the consensus forecast of $905.8 million. If you exclude the negative impact of currency rates, revenue fell 2%.

Before unusual items, earnings declined 24.6%, to $172 million from $228 million. Earnings per share fell 21.2%, to $0.26 from $0.33, on fewer shares outstanding. That was enough to beat the consensus estimate of $0.24.

Symantec is a top pick for 2016.

WESTJET AIRLINES $15.18 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 109.1 million; Market cap: $1.9 billion; Dividend yield: 3.7%) serves 100 destinations in North America, Central America, the Caribbean and Europe. Its fleet of 108 modern Boeing 737s are 30% more fuel efficient than older jets.

The company reported lower revenue and profits in the latest quarter. Weakness in the Alberta market offset the benefit of 25% lower fuel prices. Fuel typically accounts for a third of the airline’s operating expenses.

In the three months ended December 31, 2015, WestJet’s revenue fell 3.6%, to $958.7 million from $994.4 million a year earlier. Earnings fell 30.1%, to $63.4 million, or $0.51 a share. A year earlier, they were $90.7 million, or $0.71 a share. Aside from the revenue drop, higher costs, including maintenance and salaries, contributed to the earnings decline. The latest quarter also included a pre-tax foreign exchange loss of $10.0 million.

Since the end of the quarter, though, the company’s load factor has improved—it rose to 80.1% in January 2016 from 79.5% in January 2015. (Load factor is the percentage of seats occupied by paying passengers.)

WestJet had fuller flights despite increasing its capacity by 7.0% to meet higher demand. The company flew 1.7 million passengers in January 2016; that was the highest monthly total in WestJet’s history.

The company is forecast to earn $2.37 a share in 2016. The stock trades at a low 6.4 times that estimate.

WestJet is a top pick for 2016.

SYMANTEC CORP. $19.97 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 675.5 million; Market cap: $12.8 billion; Dividend yield: 1.5%) has completed the sale of its Veritas Technologies subsidiary to the Carlyle Group (Nasdaq symbol CG). This business makes products for data backup and recovery.

Symantec received $6.6 billion in cash ($5.3 billion after taxes). It also retained a $400 million equity stake in Veritas. Symantec has earmarked $2.3 billion of the proceeds for share repurchases it aims to complete by March 2017.

The company has also lowered its regular quarterly dividend by 50.0%, to $0.075 a share from $0.15, because of the Veritas sale. The new annual rate of $0.30 yields 1.5%. It will, however, pay a special dividend of $4.00 a share on March 22, 2016.

Symantec now focuses solely on antivirus and security software. In its fiscal 2016 third quarter, which ended January 1, 2016, revenue from its ongoing operations fell 6.3%, to $909 million from $970 million a year earlier. That still beats the consensus forecast of $905.8 million. If you exclude the negative impact of currency rates, revenue fell 2%.

Before unusual items, earnings declined 24.6%, to $172 million from $228 million. Earnings per share fell 21.2%, to $0.26 from $0.33, on fewer shares outstanding. That was enough to beat the consensus estimate of $0.24.

Symantec is a top pick for 2016.

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WAL-MART STORES INC., $62.68, New York symbol WMT, is closing 269 of its less profitable stores; it currently has 11,600 outlets worldwide.

Of the total, 154 will be in the U.S., including all 102 of its smaller Walmart Express locations. The remaining 115 are in other countries, including 60 in Brazil.

The company expects this one-time charge to cut its earnings by $0.20 to $0.22 a share. It will likely earn $4.37 a share in its 2016 fiscal year, which ends January 31, 2016. The stock trades at a moderate 14.3 times that estimate.

The closures will free up cash Wal-Mart can then use to expand its online business and pay for the 300 stores it plans to open in the next year.

OUR RECOMMENDATION: Wal-Mart is a buy.

Wal-Mart recent coverage

• January 2016 issue
• Hotline for November 20, 2015

INTERNATIONAL BUSINESS MACHINES CORP., $122.55, New York symbol IBM, reported better-than-expected results this week.

In the three months ended December 31, 2015, the company’s revenue fell 8.5%, to $22.06 billion from $24.11 billion a year earlier. That beat the consensus forecast of $22.04 billion.

IBM gets 60% of its revenue from outside the U.S., and the higher U.S. dollar hurts the value of these sales. Excluding exchange rates, revenue declined 2%.

The company continues to expand in faster-growing areas like cloud computing and analytics software. In the latest quarter, IBM’s cloud and analytics businesses increased their revenue by 16%, excluding currency rates. That revenue now accounts for 35% of the company’s total revenue. It is also helping to offset weaker demand for IBM’s consulting services and mainframe computers.

Overall the company’s earnings fell 18.6%, to $4.7 billion from $5.8 billion, while per-share profits fell 16.7%, to $4.84 from $5.81, on fewer shares outstanding.

These figures exclude unusual items, such as costs related to recent acquisitions and changes to IBM’s employee pension plans. On that basis, the latest earnings beat the consensus estimate of $4.81 a share.

The company will probably earn $14.98 a share in 2016, and the stock trades at just 8.2 times that forecast. The $5.20 dividend seems secure and yields 4.2%.

OUR RECOMMENDATION: IBM is a buy for long-term gains.

IBM recent coverage

• Hotline for October 23, 2015
• August 2015 issue

SYMANTEC CORP., $19.47, Nasdaq symbol SYMC, sells computer-security technology, including antivirus software, to businesses and consumers.

In 2014, the company said it would split into two publicly traded firms. One would keep the Symantec name and focus on antivirus and security software. The other, called Veritas Technologies, would focus on Symantec’s information-management business, which makes products for data backup and recovery.

However, the company instead decided to sell Veritas to the Carlyle Group (Nasdaq symbol CG) for $8.0 billion.

Now Carlyle seems to be having trouble raising the funds to buy Veritas. As a result, Symantec and Carlyle have altered the deal’s terms.

Symantec will now receive $7.0 billion, including $6.6 billion in cash and $400-million in Veritas stock. The company now expects to complete the sale on January 29, 2016.

Of the total, Symantec plans to use $2 billion to buy back shares in the 18 months following the sale, including $500 million worth under an accelerated repurchase plan. To put these figures in context, the company’s market cap (the value of all outstanding shares) is $12.9 billion.

The sale proceeds will also let Symantec keep paying its $0.15 quarterly dividend, which yields 3.1% on an annualized basis.

OUR RECOMMENDATION: Symantec is still a buy.

Symantec recent coverage

• Hotline for November 6, 2015
• November 2015 issue

VERIZON COMMUNICATIONS INC., $47.05, New York symbol VZ, reported better-than-expected results this week, thanks to strong demand for its wireless, Internet and TV services.

In the three months ended December 31, 2015, the company’s revenue rose 3.2%, to $34.3 billion from $33.2 billion a year earlier. That beat the consensus forecast of $34.1 billion.

Revenue from its wireless division (69% of the total) rose 1.2%. The company added 1.4 million subscribers (net of cancellations) in the quarter and ended the year with a total of 112.1 million. Verizon is also doing a good job of hanging onto customers: its churn rate (which shows how many subscribers cancelled their service) improved to 1.23% from 1.39%.

The wireline division’s revenue (31% of the total) fell 0.9%, mainly because more people are switching from regular telephone service to wireless. However, revenue from its FiOS fibre optic Internet and TV services gained 6.8%.

Excluding unusual items, such as costs to integrate acquisitions, earnings per share jumped 25.4%, to $0.89 from $0.71, beating the consensus estimate of $0.88.

Verizon will probably earn $3.97 a share in 2016, and the stock trades at just 11.9 times that forecast. The $2.26 dividend yields 4.8%.

OUR RECOMMENDATION: Verizon is a buy.

Verizon recent coverage

• January 2016 issue
• Hotline for September 18, 2015

BRIGGS & STRATTON CORP., $19.10, New York symbol BGG; jumped 18% this week after reporting better-than-expected quarterly earnings and increasing its full-year profit forecast.

Briggs is the world’s largest maker of lawn mower engines. It also makes a variety of other home and garden equipment, such as portable power generators, pressure washers and snow blowers.

In its fiscal 2016 second quarter, which ended December 27, 2015, Briggs’ earnings jumped 27.3%, to $15.1 million from $11.9 million a year earlier. Earnings per share gained 30.8%, to $0.34 from $0.26, on fewer shares outstanding.

These figures exclude unusual items, such as costs related to a restructuring that includes closing plants and phasing out less profitable products. On that basis, the latest earnings easily beat the consensus estimate of $0.18 a share.

However, sales fell 7.0%, to $413.4 million from $444.3 million, missing the consensus forecast of $435.2 million.

Thanks to new products, acquisitions and cost savings, Briggs now expects to earn $1.25 to $1.41 a share for all of fiscal 2016, up from its earlier forecast of $1.20 to $1.36. The stock trades at 14.4 times the midpoint of the new range.

However, Briggs faces increasing competition from larger garden equipment makers like Deere and Toro. It also gets 30% of its sales from outside the U.S., and the higher U.S. dollar will continue to dampen its sales growth.

OUR RECOMMENDATION: Briggs & Stratton is still a hold.

Briggs & Stratton recent coverage

• October 2015 issue
• Hotline for May 22, 2015

Our next Hotline will go out on Friday, January 29, 2016.

The post Wall Street Stock Forecaster Hotline – Friday, January 22, 2016 appeared first on TSI Wealth Network.

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We’ve chosen AGT Food & Ingredients, Symantec Corp. and WestJet Airlines as our top picks for 2016. In light of the recent stock market turmoil, falling commodity prices and international tensions, it’s more important than ever to diversify, rather than focus on a single pick of the year.

With that in mind, we’ve chosen to highlight three picks from our Stock Pickers Digest recommendations. All three of these high-quality stocks offer strong growth prospects and trade at low multiples to earnings.

AGT FOOD & INGREDIENTS, $36.90, symbol AGT on Toronto, buys and processes a range of pulses—which include peas, beans, lentils and chickpeas—as well as other specialty crops.

Saskatchewan-based AGT owns 13 processing plants in Canada, nine in Turkey, four in Australia, two in the U.S., one in China and one in South Africa.

A big part of AGT’s success has come from its shift to produce ingredients and packaged foods, as opposed to simply cleaning, splitting, sorting and bagging bulk crops. Food makers use these processed ingredients in products such as baked goods, soups and beverages, as well as in pet food and animal feed.

The stock trades at just 15.6 times the $2.36 a share AGT is expected to earn in 2016. It yields 1.6%.

OUR RECOMMENDATION: AGT Food & Ingredients is a top pick for 2016.

AGT Food & Ingredients recent coverage

• December 2015 issue
• Hotline for November 13, 2015

SYMANTEC CORP., $19.47, symbol SYMC on Nasdaq, was our #1 stock pick for 2000. We recommended the shares at $12.50 (adjusted for stock splits) and they rose to as high as $34 in 2004. The stock fell to $10 in the big 2008 market downturn, but has moved up steadily since then.
Symantec continues to strengthen its fast-growing cybersecurity business. It’s also selling its data backup and recovery operation.
In 2014, the company said it would split into two publicly traded firms: Symantec (security software, antivirus services) and Veritas Technologies (products for data backup and recovery). However, the company decided instead to sell Veritas to a group of private investors. It expects to close the $7.0 billion deal on January 29, 2016.

The company is forecast to earn $2.00 a share for all of fiscal 2016, and the stock trades at an attractive 9.7 times that estimate. It yields 3.1%.

OUR RECOMMENDATION: Symantec is a top pick for 2016.

Symantec recent coverage

• Hotline for November 6, 2015
• October 2015 issue

WESTJET AIRLINES, $19.09, symbol WJA on Toronto, was our #1 stock pick for 2013 at $22.29. The stock climbed steadily to $35 by the end of 2014, but has moved down along with the market since then.

WestJet serves 100 destinations in North America, Central America, the Caribbean and Europe. Its fleet of 108 modern Boeing 737s are 30% more fuel efficient than older jets.

In June 2013, the company launched WestJet Encore, its Canadian regional airline. This business now operates 23 Bombardier Q400 NextGen turboprop planes, which each seat 78 passengers.

WestJet recently took delivery of its first of three Boeing 767 wide-body aircraft. That will help it expand internationally.

The company is forecast to earn $2.74 a share in 2016. The stock trades at a low 7.0 times that estimate. The shares yield 2.9%.

OUR RECOMMENDATION: WestJet is a top pick for 2016.

WestJet recent coverage

• Hotline for January 15, 2016
• Hotline for January 8, 2016

INTACT FINANCIAL CORP., $84.56, symbol IFC on Toronto, continues to announce innovative insurance policies aimed at new—but growing—markets.

The company is awaiting approval from provincial regulators for a deal it reached to provide insurance coverage for drivers of the Uber ride-sharing service. Uber passengers use a smartphone app to hire the drivers, who use their own personal vehicles.

The service is spreading rapidly across Canada, and Intact’s new policy could be a profitable one for the insurance company.

This week, the company launched drone insurance for its commercial customers. Unmanned Air Vehicles (UAVs) are now used in many different commercial situations, including surveillance, construction, agriculture, resource exploration, meteorology, mapping and photography.

Intact’s other recent insurance innovations include cyber endorsement, which protects businesses against risks such data breaches.

OUR RECOMMENDATION: Intact Financial is a buy.

Intact Financial recent coverage

• January 2016 issue
• December 2015 issue

ALARMFORCE INDUSTRIES, $9.96, symbol AF on Toronto, sells two-way voice-alarm systems and monitoring services in Canada and in the U.S.

In the three months ended October 31, 2015, the company’s sales rose 8.7%, to $14.4 million from $13.3 million a year earlier. That pushed revenue up, along with higher monthly revenue per subscriber. However, earnings per share fell 29.4%, to $0.12 from $0.17 as the company spent more to develop and market its products.

Apart from its basic alarm systems, AlarmForce offers a range of extra services that boost revenue per subscriber. These include: AlarmForce Connect, an add-on service that lets subscribers control their home-security systems with a smartphone or tablet; and VideoRelay, which lets users watch their homes through mobile devices.

In an effort to get a more accurate picture of its customer base, AlarmForce sped up cancellation of subscribers who were behind on their payments. The result was a total of 9,000 cancellations in the latest quarter, compared to 5,000 in the same period in 2014.

As of October 31, 2015, AlarmForce’s U.S. customer base stood at 34,500, down 3.9% from 35,900 a year earlier. In Canada, it now has 109,700 users, up slightly from 108,800.

The company’s long-term outlook is positive, and the high U.S. dollar is boosting the amount its U.S. operations contribute to its earnings. However, it will have to keep spending heavily to sell its services in a competitive market and continue its U.S. expansion.

OUR RECOMMENDATION: AlarmForce is still a hold.

AlarmForce recent coverage

• Hotline for September 18, 2015
• August 2015 issue

Our next Hotline will go out on Friday, January 29, 2016.

The post Stock Pickers Digest Hotline – Friday, January 22, 2016 appeared first on TSI Wealth Network.

WESTJET AIRLINES LTD., $16.29, symbol WJA on Toronto, reported lower revenue and profits in the latest quarter. Weakness in the Alberta market offset the benefit of 25% lower fuel prices. Fuel typically accounts for a third of the airline’s operating expenses.

In the three months ended December 31, 2015, WestJet’s revenue fell 3.6%, to $958.7 million from $994.4 million a year earlier. Earnings fell 30.1%, to $63.4 million, or $0.51 a share. A year earlier, they were $90.7 million, or $0.71 a share. Aside from the revenue drop, higher costs, including maintenance and salaries, contributed to the earnings decline. The latest quarter also included a pre-tax foreign exchange loss of $10.0 million.

Since the end of the quarter, though, the company’s load factor has improved—it rose to 80.1% in January 2016 from 79.5% in January 2015. (Load factor is the percentage of seats occupied by paying passengers.)

WestJet had fuller flights despite increasing its capacity by 7.0% to meet higher demand. The company flew 1.7 million passengers in January 2016; that was the highest monthly total in WestJet’s history.

OUR RECOMMENDATION: WestJet is a top pick for 2016.

WestJet recent coverage

• February 2016 issue
• Hotline for January 29, 2016

SYMANTEC CORP., $19.76, symbol SYMC on Nasdaq, has completed the sale of its Veritas Technologies subsidiary to the Carlyle Group (Nasdaq symbol CG). This business makes products for data backup and recovery.

The company received $6.6 billion in cash ($5.3 billion after taxes). It also retained a $400 million equity stake in Veritas.

Symantec spent $500 million of the proceeds on share buybacks in January 2016. These repurchases raise earnings per share and other per-share calculations and give the remaining investors a larger stake in the company.

It has earmarked an additional $2.3 billion for share repurchases it aims to complete by March 2017. To put these figures in context, Symantec’s market cap (the value of all outstanding shares) is $13.0 billion.

Symantec has lowered its regular quarterly dividend by 50.0%, to $0.075 a share from $0.15, because of the Veritas sale. The new annual rate of $0.30 yields 1.5%. It will, however, pay a special dividend of $4.00 a share on March 22, 2016.

Symantec is also selling $500 million worth of convertible notes to private equity firm Silver Lake Partners. The notes are convertible into common stock at $21.00 a share.

The company now focuses solely on antivirus and security software. In its fiscal 2016 third quarter, which ended January 1, 2016, revenue from its ongoing operations fell 6.3%, to $909 million from $970 million a year earlier. That still beats the consensus forecast of $905.8 million. If you exclude the negative impact of currency rates, revenue fell 2%.

Before unusual items, earnings declined 24.6%, to $172 million from $228 million. Earnings per share fell 21.2%, to $0.26 from $0.33, on fewer shares outstanding. That was enough to beat the consensus estimate of $0.24.

Symantec now plans to cut $400 million from its annual costs by the end of fiscal 2018.

OUR RECOMMENDATION: Symantec is a top pick for 2016.

Symantec recent coverage

• February 2016 issue
• Hotline for January 22, 2016

TEMPUR SEALY INTERNATIONAL INC., $53.21, symbol TPX on New York, makes and distributes mattresses and neck pillows made of its patented memory foam, Tempur.

Tempur Sealy’s earnings rose 17.9% in the three months ended December 31, 2015, to $62.7 million, or $0.99 a share, from $53.2 million, or $0.86, a year earlier. Those most-recent earnings match the consensus estimate of $0.99 and exclude one-time items. Adjusting for currency fluctuations, earnings per share jumped 25.6%.

Overall sales gained 2.9%, to $767.3 million from $745.5 million. That fell short of the consensus estimate of $782.8 million. North American sales (80% of the total) rose 3.8%. International sales (20%) fell 0.4%, although on a constant-currency basis, they gained 12.1%.

Activist investor H Partners Management holds 10% of Tempur Sealy’s shares. It believes the company has performed poorly compared to other mattress makers since buying rival Sealy in March 2013. Tempur Sealy spent $1.3 billion on the acquisition, which has let it diversify into traditional spring-coil beds.

H Partners won the support of enough investors at the company’s May 8, 2015, annual meeting to force changes to the management team and board of directors.

In August 2015, the company named Scott L. Thompson as its new CEO and chairman. Thompson led car-rental agency Dollar Thrifty Automotive until Hertz Global Holdings acquired it in 2012.

Tempur Sealy’s long-term prospects are sound, and its new chief executive should bring a fresh perspective. However, the stock trades at a high 23.6 times the company’s forecast 2016 earnings of $2.25 a share.

OUR RECOMMENDATION: Tempur Sealy is still a hold.

Tempur Sealy recent coverage

• January 2016 issue
• Hotline for October 30, 2015

CALIAN TECHNOLOGIES LTD., $18.50, symbol CTY on Toronto, jumped almost 16% this week after reporting stronger results in the latest quarter.

Calian has two main divisions: Business and Technology Services (supplying 70% of the company’s revenue) provides clients with engineers, health care workers and other skilled professionals on a contract basis. Systems Engineering (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems.

In the three months ended December 31, 2015, the company’s revenue rose 15.2%, to a record $64.5 million from $56.0 million a year earlier. Excluding one-time items, Calian earned $3.3 million, or $0.45 a share. That’s up 22.2% from $2.7 million, or $0.37 a share, a year earlier.

The Business and Technology Services division continues to service recurring orders from Canadian federal government departments, including the Department of National Defence. The division’s revenue rose 9.0% in the latest quarter.

Revenue at the Systems Engineering division jumped 42.0%. It worked on a number of new contracts in the latest quarter. Another reason for the revenue increase was the timing of certain projects, which can cause the division’s revenue to swing widely from time to time.

The company holds cash of $5.2 million, or $0.70 a share, and has no debt. The stock trades at just 11.6 times this year’s forecast earnings of $1.60 a share. Calian pays a quarterly dividend of $0.28, which gives it a high 6.1% yield. That rate appears sustainable.

OUR RECOMMENDATION: Calian Technologies is still a buy.

Calian recent coverage

• January 2016 issue
• Hotline for November 20, 2015

BROADRIDGE FINANCIAL SOLUTIONS INC., $51.49, symbol BR on New York, reported higher sales and earnings in the latest quarter.

The company serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. It processes 90% of all proxy votes in the U.S. and Canada.

Without one-time items, the company earned $46.5 million in its fiscal 2016 second quarter, which ended December 31, 2015, up 16.5% from $39.9 million a year earlier. Earnings per share rose 18.8%, to $0.38 from $0.32, on fewer shares outstanding. That beat the consensus estimate of $0.33.

Revenue gained 11.1%, to $638.9 million from $574.6 million. While the company continues to attract new clients, it is holding on to existing ones. Recurring fee revenue rose 8% in the latest quarter and accounted for 62% of the total.

Broadridge typically makes about half of its profits in its fourth quarter, which ends on June 30. That’s the busiest time for processing shareholder proxies and annual reports.

The company expects its earnings per share to rise 8% to 12% in fiscal 2016, and the stock trades at 18.9 times the midpoint of that forecast ($2.72 a share). That’s still reasonable in light of Broadridge’s high market share and strong growth prospects.

OUR RECOMMENDATION: Broadridge is a buy.

Broadridge recent coverage

• January 2016 issue
• Hotline for November 6, 2015

Our next Hotline will go out on Friday, February 12, 2016.

The post Stock Pickers Digest Hotline – Friday, February 5, 2016 appeared first on TSI Wealth Network.

ALPHABET INC., Nasdaq symbols GOOG (class C non-voting), $683.57, and GOOGL (class A voting), $703.76, is the new holding company for Google’s Internet search business and its smaller, riskier operations. These smaller businesses, which the company calls “Other Bets,” sell home thermostats and high-speed Internet and digital TV services.

In the three months ended December 31, 2015, Alphabet’s revenue rose 17.8%, to $21.3 billion from $18.1 billion a year earlier, beating the consensus forecast of $20.8 billion. The main search engine business accounted for 99% of the total.

That division’s revenue gained 17.7%. The number of paid clicks on advertisers’ ads jumped 31%, helping offset a 13% drop in the average amount advertisers paid per click. More people are using mobile devices to access the Internet, but advertisers pay lower rates for mobile ads because they’re harder to see on smaller screens. Revenue from Other Bets (1% of revenue) jumped 42.5%.

Overall earnings rose 29.8%, to $6.0 billion from $4.7 billion. Earnings per share gained 28.3%, to $8.67 from $6.76, on more shares outstanding. These figures exclude unusual items, such as costs related to the reorganization. On that basis, the latest earnings beat the consensus estimate of $8.09 a share.

The company will probably earn $34.49 a share in 2016, and the class C stock trades at 19.8 times that estimate. That’s a reasonable p/e ratio considering Alphabet devotes 12% of its revenue to research. That spending hurts its current earnings but helps it maintain its 70% share of the fast-growing Internet search market.

What’s more, the new holding company structure makes it easier for the company to spin off some of its Other Bets as separate firms.

Shareholders should keep holding their class A stock. For new buying, we recommend the cheaper class C shares.

OUR RECOMMENDATION: Alphabet is our top Aggressive buy for 2016.

Alphabet recent coverage

• February 2016 issue
• Hotline for January 29, 2016

PFIZER INC., $29.02, New York symbol PFE, is one of the world’s leading prescription-drug makers. Its top-selling brands include Lyrica (epilepsy), Celebrex (arthritis pain), Prevnar (pneumonia) and Enbrel (rheumatoid arthritis).

The company also makes over-the-counter treatments, including Advil (pain relief), Centrum (vitamins) and Robitussin (cough syrup).

Pfizer reported stronger-than-expected earnings this week, but it cut its outlook for 2016, causing the stock to fall 5%.

In the three months ended December 31, 2015, earnings declined 3.9%, to $3.3 billion from $3.4 billion a year earlier. But earnings per share fell just 1.9%, to $0.53 from $0.54, on fewer shares outstanding. That beat the consensus estimate of $0.52.

These figures exclude unusual items, such as costs related to last year’s $17-billion acquisition of Hospira, a maker of biosimilars, which are close copies of biologic drugs. Biologics differ from regular drugs in that they are made from living organisms such as bacteria and yeast.

Thanks to Hospira and strong sales of new drugs like Ibrance (breast cancer) and Eliquis (stroke), Pfizer’s revenue in the quarter gained 7.1%, to $14.0 billion from $13.1 billion a year earlier, beating the consensus forecast of $13.6 billion. If you exclude the impact of acquisitions and foreign currency rates, revenue rose 5%.

Pfizer now expects to earn $2.20 to $2.30 a share in 2016. The midpoint of that range—$2.25—is less than the consensus forecast of $2.36. The stock trades at 12.9 times the 2016 estimate.

These forecasts exclude any costs or benefits from Pfizer’s upcoming merger with Irish drug maker Allergan plc (New York symbol AGN), which is best known for the anti-wrinkle drug Botox. The deal will cut the combined firm’s corporate tax rate to 18% from 25%, giving it more cash for dividends. Pfizer’s current annual rate of $1.20 yields 4.1%.

OUR RECOMMENDATION: Pfizer is our top Income buy for 2016.

Pfizer recent coverage

• February 2016 issue
• Hotline for January 29, 2016

SYMANTEC CORP., $19.76, Nasdaq symbol SYMC, has completed the sale of its Veritas Technologies subsidiary to the Carlyle Group (Nasdaq symbol CG). This business makes products for data backup and recovery.

The company received $6.6 billion in cash ($5.3 billion after taxes). It also retained a $400 million equity stake in Veritas.

Symantec spent $500 million of the proceeds on share buybacks in January 2016. These repurchases raise earnings per share and other per-share calculations and give the remaining investors a larger stake in the company.

It has earmarked an additional $2.3 billion for share repurchases it aims to complete by March 2017. To put these figures in context, Symantec’s market cap (the value of all outstanding shares) is $13.0 billion.

Symantec has lowered its regular quarterly dividend by 50.0%, to $0.075 a share from $0.15, because of the Veritas sale. The new annual rate of $0.30 yields 1.5%. It will, however, pay a special dividend of $4.00 a share on March 22, 2016.

Symantec is also selling $500 million worth of convertible notes to private equity firm Silver Lake Partners. The notes are convertible into common stock at $21.00 a share.

The company now focuses solely on antivirus and security software. In its fiscal 2016 third quarter, which ended January 1, 2016, revenue from its ongoing operations fell 6.3%, to $909 million from $970 million a year earlier. That still beat the consensus forecast of $905.8 million. If you exclude the negative impact of currency rates, revenue fell 2%.

Before unusual items, earnings declined 24.6%, to $172 million from $228 million. Earnings per share fell 21.2%, to $0.26 from $0.33, on fewer shares outstanding. That was enough to beat the consensus estimate of $0.24.

Symantec now plans to cut $400 million from its annual costs by the end of fiscal 2018.

OUR RECOMMENDATION: Symantec is a buy.

Symantec recent coverage

• February 2016 issue
• Hotline for January 22, 2016

3M COMPANY, $153.47, New York symbol MMM, raised its quarterly dividend by 8.3% this week, to $1.11 from $1.025. The new annual rate of $4.44 yields 2.9%. 3M has paid dividends without interruption for 99 years. It has also increased its payout annually for the past 58 years.

In addition, the company replaced its current share-repurchase authorization with a new plan to buy back up to $10 billion worth of its stock. That’s equal to 11% of its $94.8-billion market cap. There are no expiry dates for these purchases.

OUR RECOMMENDATION: 3M is a buy.

3M recent coverage

• Hotline for December 18, 2015
• Hotline for October 23, 2015

WELLS FARGO & CO., $47.85, New York symbol WFC, has agreed to settle charges that it issued government-backed mortgages to unqualified borrowers between 2001 and 2010. As a result, the bank will pay a $1.2-billion fine.

Wells Fargo has already set aside funds to cover potential lawsuit settlements. But even so, this payment will cut its previously reported 2015 earnings by $134 million, or $0.03 a share. The bank’s full-year profit is now $22.9 billion, or $4.12 a share.

Later this year, U.S. banking regulators will bring in new rules clarifying the criteria for government-backed mortgages. That will help Wells Fargo and other lenders avoid future penalties.

OUR RECOMMENDATION: Wells Fargo is still a buy.

Wells Fargo recent coverage

• February 2016 issue
• November 2015 issue

Our next Hotline will go out on Friday, February 12, 2016.

The post Wall Street Stock Forecaster Hotline – Friday, February 5, 2016 appeared first on TSI Wealth Network.

IAMGOLD CORP., $2.76, symbol IMG on Toronto, has a joint venture with Calibre Mining (symbol CXB on Toronto) to explore the Eastern Borosi silver/gold project in Nicaragua.

The partners plan to spend $1.5 million U.S. this year on a 5,500-metre drilling program. They have already completed 11,400 metres of drilling since they formed their joint venture in May 2014.

The drilling results have so far included several high-grade mineral showings. They include a 12.9m drilling section that graded at a high 8.73 grams per tonne of gold and 11.5 grams per tonne of silver.

Under the terms of the joint venture agreement, IAMGold will earn a 51% stake in the project if it spends $5 million U.S. on exploration and pays Calibre $450,000 U.S. in cash over a three-year period. It can earn another 19% stake by spending an additional $5 million U.S. and making another payment of $450,000 U.S. over a second three-year period.

IAMGold already holds interests in five operating mines. But it’s important for miners to keep exploring and developing new projects.

As well, government policies in Nicaragua now support more mining activity: the country has a low 3% royalty on production, a 30% tax rate and no export restrictions on gold. Its currency is pegged to the U.S. dollar, with a fixed annual inflation rate. That limits currency speculation.

OUR RECOMMENDATION: IAMGold is still a buy.

IAMGold recent coverage

• February 2016 issue
• November 2015 issue

AGT FOOD & INGREDIENTS INC., $38.80, symbol AGT on Toronto, buys and processes a range of pulses, which include peas, beans, lentils and chickpeas, as well as other specialty crops. The Saskatchewan-based company owns processing plants in Canada, the U.S., Turkey, Australia, China and South Africa.

AGT revenue jumped 45.3% in the three months ended December 31, 2015, to $578.3 million from $398.0 million. The increase came from recent acquisitions and higher processing activity.

The acquisitions included Mobil Capital Holdings for $57.5 million. Mobil operates a movable crop-processing plant, short-line railways, bulk-loading facilities and a grain- and pulse-trading business. The company mostly operates in Saskatchewan. AGT also bought the assets of West Central Road & Rail for $22 million. That deal included five bulk-loading sites in Saskatchewan.

Before one-time items, AGT earned $15.2 million in the latest quarter, up 1.9% from $14.9 million a year earlier. The company issued more shares to pay for its recent acquisitions. As a result, earnings per share fell 5.9%, to $0.64 from $0.68, on more shares outstanding.

AGT continues to benefit from its plan to focus on more-profitable products, such as ingredients and packaged foods. That’s instead of simply cleaning, splitting and bagging bulk crops.

The stock trades at 16.3 times the $2.38 a share AGT will probably earn in 2016. It yields 1.5%.

OUR RECOMMENDATION: AGT Food & Ingredients is a top pick for 2016.

AGT Food recent coverage

• February 2016 issue
• Hotline for January 22, 2016

SYMANTEC CORP., $18.71, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

At the start of this year, the company completed the sale of its Veritas Technologies business to a group of private investors for $8.0 billion.

This week, it announced that it will accelerate the buyback of $1 billion of its shares as part of the plan to return $5.5 billion to its shareholders.

Symantec also paid a special dividend of $4.00 a share to its shareholders on March 22, 2016. That payout totalled $2.7 billion. When combined with a $500 million share buyback completed in January 2016, and the $1 billion accelerated buyback just announced, that will total $4.2 billion.

The remaining $1.3 billion under the company’s $5.5-billion program is scheduled for completion by the end of March 2017.

Buying back shares raises a company’s earnings per share. Buybacks reduce the number of shares outstanding. To get earnings per share, you divide total earnings by the number of shares outstanding. With fewer shares, the calculation naturally gives you a higher figure for earnings per share. On the whole, buyers are willing to pay more for a stock with higher earnings per share.

OUR RECOMMENDATION: Symantec is a top pick for 2016.

Symantec recent coverage

• March 2016 issue
• Hotline for February 5, 2016

DELPHI ENERGY CORP., $1.05, symbol DEE on Toronto, develops, produces and explores for oil and natural gas. About 66% of its output is gas; the remaining 34% is oil.

In the three months ended December 31, 2015, Delphi’s production fell 26.8%, to 8,814 barrels of oil equivalent per day from 12,035 a year earlier. That was after the company sold some fields. The lower output offset a 9.9% average increase in realized oil and gas prices. As a result, cash flow per share fell to $0.09 from $0.10.

The company will need improved oil and gas prices to move significantly higher, but its long-term outlook is positive.

OUR RECOMMENDATION: Delphi Energy is a buy for aggressive investors.

Delphi Energy recent coverage

• December 2015 issue
• October 2015 issue

TEMPUR SEALY INTERNATIONAL INC., $57.81, symbol TPX on New York, makes and distributes mattresses and neck pillows made of its patented memory foam, Tempur.

As well, the company bought rival Sealy in March 2013 for $1.3 billion. The move let it diversify into traditional spring-coil beds.

Tempur Sealy’s top executives continue to add to their holdings in the company. For example, president and CEO Scott L. Thompson increased his holding by 50.2%, when he bought 35,000 shares earlier this month, at prices between $56.69 and $58.49 each. He now owns 104,686 shares. Also earlier this month, executive vice president Richard W. Anderson bought 17,430 shares, at prices between $56.36 and $57.83 each. He also increased his holding by 50.2%, and now owns 52,162 shares.

Investors can put too much weight on insider buying and selling, since insiders can delude themselves about their employer just as easily as outsiders can. However, insiders tend to make substantial buys for one reason—they think the company has investment appeal. On the other hand, those insiders may sell for a variety of personal reasons that have nothing to do with the company.

OUR RECOMMENDATION: Tempur Sealy is still a hold.

Tempur Sealy recent coverage

• Hotline for February 5, 2016
• January 2016 issue

The post Stock Pickers Digest Hotline – Thursday, March 24, 2016 appeared first on TSI Wealth Network.

DOMINO’S PIZZA INC., $126.25, symbol DPZ on New York, is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 12,100 outlets in the U.S. and 80 other countries. Franchisees run most of these stores.

The company continues to profit from its move into online orders and through smartphone apps.

Half of its sales now come from those digital orders, and half of those are from mobile devices. The popular Domino’s Tracker app lets customers follow their pizza from the time they place the order through to the baking, boxing and delivery of their food.

The company wants to speed up the shift to digital ordering because it cuts labour costs and reduces errors—an employee can easily enter a phone order incorrectly, but a mistake in an online order is usually the customer’s fault.

Domino’s is now rolling out its latest digital innovation in Australia. The company will use satellites to follow customers as they approach stores to pick up their orders. By tracking pizza-buyers on the street—using their cellphones—it can wait until the last moment to start cooking and ensure pizzas stay fresh.

Customers who order food for pickup must agree to have their cellphones followed by the tracking system. They can also specify whether they’re coming on foot, on bike or by car. Cooking starts when the map shows customers are within range.

OUR RECOMMENDATION: Domino’s Pizza is a hold.

Domino’s recent coverage

• April 2016 issue
• Hotline for March 4, 2016

MAJOR DRILLING GROUP INTERNATIONAL INC., $7.01, symbol MDI on Toronto, is a large contract-drilling firm that mainly serves the mining industry.

In the three months ended April 30, 2016, the company’s revenue fell 21.0%, to $64.1 million from $81.2 million a year earlier. Revenue fell in all regions: Canada/U.S., down 20% to $39.9 million; South and Central America, down 29% to $15.0 million; and Asia and Africa, down 11% to $9.2 million.

Major continues to report positive cash flow, despite the significant industry downturn. However, cash flow in the latest quarter fell sharply, to $1.0 million, or $0.01 a share, from $3.6 million, or $0.07, a year earlier.

The company’s balance sheet remains strong, with cash of $50.2 million, or $0.63 a share. Its debt is just $12.2 million.

Starting with its May 2015 payment, Major dropped its semi-annual dividend by $0.10 to $0.02 a share. That was to conserve cash until commodity prices rebounded. With drilling activity still down, the company then eliminated its dividend in March 2016.

Major’s results will likely remain weak this year, however its shares have doubled since January. They could go higher as drilling increases along with a rise in commodity prices.

OUR RECOMMENDATION: Major Drilling is a buy for aggressive investors.

Major Drilling recent coverage

• January 2016 issue
• Hotline for December 4, 2015

SYMANTEC CORP., $17.30, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus software, to businesses and consumers.

The company has just launched a new product—Symantec Anomoly Detection for Automotive. It helps automakers detect security breaches in vehicles connected to the Internet. Those cars offer drivers conveniences such as GPS navigation, remote roadside assistance and mobile Internet. There could be as many as 220 million connected cars on the road by 2020.

Technology that connects products, including vehicles and smart electricity meters, to the Internet is known as machine-to-machine communication. It’s more generally known as the Internet of Things (IoT).

Symantec’s new automotive product installs analytic software in cars connected to the IoT. It then records the normal operating behaviour of the vehicle and makes note of any unusual activity that may indicate a cyberattack.

If it finds unusual activity, the software sends the data to the automaker. The goal is to identify any cyber breach as quickly as possible and fix it before computer hackers can cause damage. Symantec’s software should work with any vehicle connected to the IoT.

OUR RECOMMENDATION: Symantec is a top pick for 2016.

Symantec recent coverage

• Hotline for March 24, 2016
• March 2016 issue

DREAM OFFICE REIT, $18.65, symbol D.UN on Toronto, owns and manages 160 properties comprising 22.3 million square feet of office and retail space in major Canadian cities.

The trust is now selling part of its interest in the 2 million square-foot Scotia Plaza, in downtown Toronto. The buyer is private equity firm KingSett Capital.

Dream Office bought two-thirds of the 68-storey building four years ago. H&R REIT (a recommendation of our Canadian Wealth Advisor newsletter) purchased the remaining third. The total price was $1.3 billion.

The selling price for that deal was not disclosed, but the sellers also held discussions with a range of foreign buyers, including Chinese firms Anbang Insurance Group and Fosun Group, as well as sovereign wealth fund Abu Dhabi Investment Authority.

Under the terms of the deal with KingSett, Dream Office will sell 16.66% of Scotia Plaza. It will keep the remaining 50% stake and continue to manage the property. H&R REIT will also sell its entire one-third stake in Scotia Plaza to KingSett.

OUR RECOMMENDATION: Dream Office REIT remains a buy.

Dream Office recent coverage

• June 2016 issue
• April 2016 issue

TEMPUR SEALY INTERNATIONAL INC., $59.18, symbol TPX on New York, makes and distributes mattresses and neck pillows made of its patented memory foam, Tempur.

As well, the company bought rival Sealy in March 2013 for $1.3 billion. The move let it diversify into traditional spring-coil beds.

This week, it announced that it will increase its share buyback program by another $200 million. Since the program was announced on February 4, 2016, Tempur Sealy has repurchased about 3.4 million shares for $195 million. That has reduced the number of shares by 5.2%; about 60.9 million remain outstanding.

With the increased buyback authorization, the company has $205 million still available for repurchases.

However, even with the share buybacks, the stock trades at a high 26.3 times the company’s forecast 2016 earnings of $2.25 a share.

OUR RECOMMENDATION: Tempur Sealy is still a hold.

Tempur Sealy recent coverage

• May 2016 issue
• Hotline for March 24, 2016

The post Stock Pickers Digest Hotline – Friday, June 10, 2016 appeared first on TSI Wealth Network.

FAIR ISAAC CORP., $109.37, symbol FICO on New York, is best known for its FICO Scores software, which lets lenders make better decisions about customer creditworthiness. It also makes programs that help credit card issuers reduce fraud and analyze the spending patterns of cardholders.

The company has recently applied its expertise to other businesses, especially cybersecurity.

This week, Fair Isaac bought QuadMetrics, a firm that uses predictive analytics to rate the cybersecurity risk of any organization. The company hasn’t disclosed the purchase price.

The rating system—which QuadMetrics believes is 90% accurate—helps a company’s chief information officer gauge the possibility of a cyberattack. Part of that is determining the level of risk a company is exposed to by giving vendors and suppliers access to its computer networks.

Just as important, QuadMetrics can also help insurers underwrite cyberattack policies for companies.

The rating system collects more than 250 data points from an organization’s information technology network. Those include its spam traffic and the configuration of its servers and routers. The analytics software then predicts the company’s risk based on past security breaches.

OUR RECOMMENDATION: Fair Isaac is still a hold.

Fair Isaac recent coverage

• Hotline for April 15, 2016
• April 2016 issue

SYMANTEC CORP., $19.97, symbol SYMC on Nasdaq, jumped almost 16% this week after making a big cybersecurity acquisition and finding a new CEO.

The company will buy privately held Blue Coat for $4.65 billion. That business makes products to protect clients from cyberattacks through their websites and networks. Blue Coat has also emerged as a leader in security for cloud computing, and serves over 15,000 businesses.

The combined company will get 62% of its sales from corporations, up from Symantec’s 50%. That’s more profitable and stable than selling anti-virus software to individual consumers.

Adding Blue Coat should give Symantec a big marketing and research edge over competitors Palo Alto Networks, FireEye and Check Point Software.

As well, Blue Coat’s CEO Greg Clark will take over at Symantec. Michael Brown stepped down from the CEO position in April.

OUR RECOMMENDATION: Symantec is a top pick for 2016.

Symantec recent coverage

• Hotline for June 10, 2016
• Hotline for March 24, 2016

ALARMFORCE INDUSTRIES INC., $10.91, symbol AF on Toronto, sells two-way voice-alarm systems and monitoring services in Canada and the U.S.

In the three months ended April 30, 2016, the company’s sales rose 3.2%, to $14.5 million from $14.0 million. Earnings per share rose 6.7%, to $0.16 from $0.15.

Apart from its basic alarm systems, AlarmForce offers a range of extra services that boost revenue per subscriber. These include: AlarmForce Connect, an add-on service that lets subscribers control their home-security systems from a smartphone or tablet; and VideoRelay, which lets users watch their homes through mobile devices.

As of April 30, 2016, AlarmForce’s U.S. customer base stood at 33,900, down 7.9% from 36,800 a year earlier. In Canada, it now has 109,700 users, down slightly from 109,900.

The company’s long-term outlook is positive, and the high U.S. dollar boosts the contribution of its sales in that country. However, it will have to keep spending heavily in the competitive U.S. market to promote its services and expand further.

OUR RECOMMENDATION: AlarmForce is still a hold.

AlarmForce recent coverage

• May 2016 issue
• Hotline for March 18, 2016

CALIAN GROUP LTD., $19.30, symbol CGY on Toronto, has two major divisions: Business and Technology Services (70% of its revenue) provides clients with engineers, health care workers and other skilled professionals on a contract basis. Systems Engineering (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems.

The Canadian Space Agency has just renewed the contract for Calian to provide support for its satellite operations. The agreement, for an undisclosed sum, is for two years, with an option to renew. The company has worked with the Canadian Space Agency for over 23 years.

This week, Calian announced another deal—an information technology contract with the Canadian Department of National Defense. The agreement is for one year and includes the option of two additional one-year periods.

The company’s key focus will be to standardize computer services across the department. It estimates the value of the contract at $3 million dollars.

Both deals are small ones for Calian—it reported revenue of $68.1 million in the three months ended March 31, 2016. However, they demonstrate the company’s ongoing ability to win service agreements from all levels and areas of government.

OUR RECOMMENDATION: Calian Group is still a buy.

Calian recent coverage

• May 2016 issue
• Hotline for April 1, 2016

FIRSTSERVICE CORP., $58.20, symbol FSV on Toronto, offers residential property management and improvement services. It set up its Colliers International commercial real estate division as a separate company early last year. It then handed out shares in the business to its own shareholders.

FirstService has now acquired The Niles Company, one of the oldest property management firms in Boston. Niles was founded in 1907. Neither party has revealed the terms of the deal.

The acquisition should, however, add over 80 properties to the company’s existing management portfolio. It comprises over 1.6 million residential units, spread across 7,500 buildings in the U.S. and Canada.

The deal should also increase revenue for FirstService’s busy third and fourth quarters. For the three months ended March 31, 2016, revenue rose 13.0%, to $307.6 million from $272.2 million a year earlier (all figures except share price in U.S. dollars). Excluding Niles, the company is on target to earn $1.50 U.S. a share for 2016.

The outlook for FirstService remains strong. The spinoff of Colliers International Group adds to its appeal. However, the stock trades at a high 30.2 times the $1.50 U.S. a share the company will likely earn in 2016.

OUR RECOMMENDATION: FirstService is a hold.

FirstService recent coverage

• May 2016 issue
• Hotline for April 8, 2016

The post Stock Pickers Digest Hotline – Friday, June 17, 2016 appeared first on TSI Wealth Network.

GENERAL MILLS INC. $61 (New York symbol GIS, Conservative Growth Portfolio, Consumer sector; Shares outstanding: 593.4 million; Market cap: $36.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.generalmills.com) plans to change the labels on its packaged food products to indicate if they contain genetically modified organisms (GMOs).

That’s mainly to comply with new GMO-labelling rules in Vermont. They take effect in July 2016. The change will also help the company prepare for the likelihood of new national labelling standards.

General Mills is currently phasing out GMO versions of oats in its cereals. However, it will continue to use GMO crops for other products. That’s because they use corn and wheat, and finding sufficient supplies of non-GMO versions would be difficult.

General Mills is a hold.

SYMANTEC CORP. $19 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 652.2 million; Market cap: $12.4 billion; Priceto- sales ratio: 2.0; Dividend yield: 1.6%; TSINetwork Rating: Average; www.symantec.com) has launched a new service that aims to improve the security of Internet websites.

Called “Encryption Everywhere,” this software makes it easier for web hosting firms to embed encryption when they create new websites. This will help protect users from cybercriminals and online intruders. Symantec is giving away this software for free. It feels this approach will encourage hosting firms to adopt the technology and eventually buy more security services and software. Just 3% of the world’s websites use encryption technology, so there’s plenty of room to grow.

Symantec is a buy.

NEWMONT MINING CORP. $27 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 529.2 million; Market cap: $14.3 billion; Price-to-sales ratio: 1.9; Dividend yield: 0.6%; TSINetwork Rating: Average; www.newmont.com) has sold its 19.45% stake in Australian gold mining firm Regis Resources for $182 million.

This sale is part of Newmont’s plan to sell less important assets, and use the proceeds to pay down its debt. Since 2013, it has sold $1.9 billion of assets. Newmont cut its long-term debt in 2015 by 6.1%, to $6.1 billion. That’s still a high 43% of its market cap.

Newmont is a hold.

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SYMANTEC CORP. $19 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 652.2 million; Market cap: $12.4 billion; Priceto- sales ratio: 2.0; Dividend yield: 1.6%; TSINetwork Rating: Average; www.symantec.com) has launched a new service that aims to improve the security of Internet websites.

Called “Encryption Everywhere,” this software makes it easier for web hosting firms to embed encryption when they create new websites. This will help protect users from cybercriminals and online intruders. Symantec is giving away this software for free. It feels this approach will encourage hosting firms to adopt the technology and eventually buy more security services and software. Just 3% of the world’s websites use encryption technology, so there’s plenty of room to grow.

Symantec is a buy.

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DOREL INDUSTRIES INC., $37.17, symbol DII.B on Toronto, makes a range of items, including ready-to-assemble home and office furniture; juvenile products such as car seats, strollers, high chairs and cribs; and bicycles and other sporting goods.

In the three months ended June 30, 2016, sales fell 4.8%, to $637.3 million from $669.6 million a year earlier (all figures except share price in U.S. dollars).

Excluding one-time items, Dorel’s earnings dropped 12.6%, to $14.5 million, or $0.45 a share, from $16.2 million, or $0.51. The company gets half of its sales from outside of North America. The high U.S. dollar hurt the contribution of those foreign sales. As well, industry-wide price discounting hurt revenue and profits from its bicycle sales.

The company’s outlook remains positive: costs are falling as it shifts the manufacture of juvenile products from Europe and North America to China; and investments in its e-commerce operations are paying off, especially for its distribution network.

The stock trades at a low 12.1 times Dorel’s forecast 2016 earnings of $2.32 U.S. a share. It yields a high 4.2%.

OUR RECOMMENDATION: Dorel Industries is a buy.

Dorel recent coverage

• June 2016 issue
• Hotline for May 13, 2016

RESTAURANT BRANDS INTERNATIONAL INC., $46.69, symbol QSR on New York, took its current form on December 12, 2014, after Burger King Worldwide acquired Tim Hortons.

The company is the world’s third-largest fast-food operator, after McDonald’s (No. 1) and Yum Brands (No. 2), with 15,100 Burger King outlets and 4,464 Tim Hortons stores in 100 countries.

Much lower expenses helped to push up profits for the three months ended June 30, 2016. Restaurant Brands earned $192.4 million, or $0.41 a share, in the quarter. That’s up 36.5% from $141.0 million, or $0.30 a share, a year earlier.

The high U.S. dollar hurt contributions from the company’s overseas operations.  As a result, overall sales dipped to $1.04 billion from $1.042 billion. However, Tim Hortons’ same-store sales rose 2.7%, thanks to new lunch wraps and strong demand for its coffee and other beverages. Burger King’s same-store sales gained 0.6%, also due to new items such as hot dogs and chicken rings.

With the July 2016 payment, Restaurant Brands raised its quarterly dividend by 7.1%. The shares now yield 1.4%, and the company’s outlook is positive. However, the stock trade at a high 33.4 times the 2016 forecast earnings of $1.40 a share.

OUR RECOMMENDATION: Restaurant Brands International is still a hold.

Restaurant Brands recent coverage

• August 2016 issue
• Hotline for July 29, 2016

STANTEC INC., $29.95, symbol STN on Toronto, sells a range of consulting, design and technology services. Its clients operate in the oil and gas industry, transportation, and construction, among several other areas.

In the three months ended June 30, 2016, the company’s acquisitions and the stronger U.S. dollar boosted its revenue to $777.3 million. That’s a 30.9% jump from the $593.9 million in sales a year earlier.

However, earnings fell 51.0% in the quarter, to $21.2 million from $43.2 million. Per-share earnings fell 56.5%, to $0.20 from $0.46, on more shares outstanding—due to recent acquisitions. The earnings decline came mostly from higher costs related to Stantec’s purchase of MWH Global.

The company continues to grow through acquisitions. It paid $795 million U.S. for MWH in May 2016. That makes the business—with 187 offices in 26 countries—Stantec’s biggest purchase to date. MWH also gives the company a major global presence in the water infrastructure industry.

By sharing administrative expenses, financing and employee benefits among its businesses, Stantec cuts its costs. But continually buying other firms—the company has made over 25 acquisitions in the past four years—adds risk, including the risk of writedowns.

Stantec raised its dividend by 7.1% with the April 2016 payment, to $0.1125 from $0.105. The shares yield 1.5%.

OUR RECOMMENDATION: Stantec is still a hold.

Stantec recent coverage

• July 2016 issue
• May 2016 issue

CALIAN GROUP LTD., $24.45, symbol CGY on Toronto, has two main divisions: Business and Technology Services (supplying 70% of the company’s revenue) provides clients with engineers, health care workers and other skilled professionals on a contract basis; Systems Engineering (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems.

In the three months ended June 30, 2016, the company’s revenue rose 13.9%, to a record $73.2 million from $64.3 million a year earlier. Excluding one-time items, Calian earned $4.0 million, or $0.54 a share. That’s up sharply from $2.5 million, or $0.34 a share. The increased profits are the direct result of higher revenue.

The Business and Technology Services business continues to service recurring orders from Canadian federal government departments, including the Department of National Defence. The division’s revenue rose 14.3% in the latest quarter.

Revenue at the Systems Engineering business rose 13.0%. The Canadian Space Agency recently renewed a contract for Calian to provide support for its satellite operations.

The company holds cash of $13.3 million, or $1.80 a share, and has no debt. The stock trades at just 12.8 times this year’s forecast earnings of $1.90 a share. Calian pays a quarterly dividend of $0.28, which gives it a high 4.6% yield.

OUR RECOMMENDATION: Calian Group is still a buy.

Calian recent coverage

• August 2016 issue
• Hotline for July 8, 2016

SYMANTEC CORP., $21.89, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

In the three months ended July 1, 2016, the company’s earnings fell 3.3%, to $177 million from $183 million a year earlier. However, per-share earnings rose 11.5%, to $0.29 from $0.26, on fewer shares outstanding. Sales declined 3.1%, to $873.0 million from $899.0 million.

The revenue slide came as the company shifted clients over to its cloud-based service. That hurts near-term sales, but should make it easier for customers to renew their subscriptions. Higher costs also contributed to Symantec’s earnings decline. To address that, it’s now cutting 1,200 workers, or 10% of the total, and closing some facilities. Those moves should save over $400 million a year.

The company has now completed the purchase of privately held Blue Coat for $4.65 billion. That business makes products to protect clients from cyberattacks through their websites and networks. Blue Coat has also emerged as a leader in security for cloud computing and serves over 15,000 businesses.

The combined company now gets 62% of its sales from corporations, up from 50%. That’s more profitable and stable than selling antivirus software to individual consumers. Adding Blue Coat also gives Symantec a big marketing and research edge over competitors Palo Alto Networks, FireEye and Check Point Software.

As well, Blue Coat’s CEO Greg Clark has taken over at Symantec. Michael Brown stepped down from the CEO position in April after the company posted lower-than-expected fourth quarter results.

OUR RECOMMENDATION: Symantec is a top pick for 2016.

Symantec recent coverage

• July 2016 issue
• Hotline for June 17, 2016

Our next Hotline will go out on Friday, August 12, 2016.

The post Stock Pickers Digest Hotline – Friday, August 5, 2016 appeared first on TSI Wealth Network.

SYMANTEC CORP. $18.99 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 612.3 million; Market cap: $11.5 billion; Dividend yield: 1.6%) continues to strengthen its fast-growing cybersecurity business.

The company will buy privately held Blue Coat for $4.65 billion. That business makes products to protect clients from cyberattacks through their websites and networks. Blue Coat has also emerged as a leader in security for cloud computing, and serves over 15,000 businesses.

The combined company will get 62% of its sales from corporations, up from Symantec’s 50%. That’s more profitable and stable than selling anti-virus software to individual consumers. Adding Blue Coat will also give Symantec a big marketing and research edge over competitors Palo Alto Networks, FireEye and Check Point Software.

As well, Blue Coat’s CEO Greg Clark will take over at Symantec. Michael Brown stepped down from the CEO position in April after the company posted lower-than-expected fourth quarter results.

In those three months ended April 2, 2016, the company’s earnings fell 27.6%, to $147 million, or $0.22 a share, from $203 million, or $0.29. That was below the consensus forecast of $0.24 a share. Sales declined 2.9%, to $873.0 million from $899.0 million.

The revenue slide came as the company shifted clients over to its cloud-based service. That hurts near-term sales, but should make it easier for customers to renew their subscriptions. Higher costs also contributed to Symantec’s earnings decline. To address that, it’s now cutting 1,200 workers, or 10% of the total, and closing some facilities. Those moves should save over $400 million a year.

Symantec is a top pick for 2016.

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SYMANTEC CORP. $18.99 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 612.3 million; Market cap: $11.5 billion; Dividend yield: 1.6%) continues to strengthen its fast-growing cybersecurity business.

The company will buy privately held Blue Coat for $4.65 billion. That business makes products to protect clients from cyberattacks through their websites and networks. Blue Coat has also emerged as a leader in security for cloud computing, and serves over 15,000 businesses.

The combined company will get 62% of its sales from corporations, up from Symantec’s 50%. That’s more profitable and stable than selling anti-virus software to individual consumers. Adding Blue Coat will also give Symantec a big marketing and research edge over competitors Palo Alto Networks, FireEye and Check Point Software.

As well, Blue Coat’s CEO Greg Clark will take over at Symantec. Michael Brown stepped down from the CEO position in April after the company posted lower-than-expected fourth quarter results.

In those three months ended April 2, 2016, the company’s earnings fell 27.6%, to $147 million, or $0.22 a share, from $203 million, or $0.29. That was below the consensus forecast of $0.24 a share. Sales declined 2.9%, to $873.0 million from $899.0 million.

The revenue slide came as the company shifted clients over to its cloud-based service. That hurts near-term sales, but should make it easier for customers to renew their subscriptions. Higher costs also contributed to Symantec’s earnings decline. To address that, it’s now cutting 1,200 workers, or 10% of the total, and closing some facilities. Those moves should save over $400 million a year.

Symantec is a top pick for 2016.

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SYMANTEC CORP. $21 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 612.3 million; Market cap: $12.9 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.4%; TSINetwork Rating: Average; www.symantec.com) recently completed the sale of its Veritas Technologies subsidiary to the Carlyle Group (Nasdaq symbol CG). This business makes products for data backup and recovery. Symantec received $6.6 billion in cash ($5.3 billion after taxes). It also retained a $400 million equity stake in Veritas.

The company is using that cash to buy Blue Coat Inc. for $4.65 billion. That business makes products to protect clients from cyberattacks through their websites and networks. It’s also a leader in security for cloud computing, and serves over 15,000 businesses.

Symantec expects to complete the purchase in September 2016. The combined company will get 62% of its sales from corporations, up from Symantec’s 50%. That’s a more profitable and stable business than selling anti-virus software to individual consumers.

Symantec is a buy.

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