These two leading software makers continue to aggressively expand their cloud computing operations. While each is enhancing its long-term prospects, we feel Symantec is the better choice right now.

ADOBE SYSTEMS INC. $98 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 499.0 million; Market cap: $48.9 billion; Price-to-sales ratio: 9.2; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) continues to benefit from rising demand for its online subscription services, particularly the Creative Cloud package of photoediting and desktop-publishing programs.

In its fiscal 2016 second quarter, which ended June 3, 2016, the company earned $0.71 a share. That was up 47.9% from $0.48 a year earlier. Revenue jumped 20.4%, to a record $1.40 billion from $1.16 billion.

In the latest quarter, revenue from Adobe’s Creative Cloud service jumped 37.0% from a year earlier. It is also seeing strong demand for its newer cloud-based offerings, including Document Cloud. That lets users create, manage and sign online documents for a monthly fee. Revenue from the company’s software to make online ads more effective — Marketing Cloud— gained 18.0%.

Adobe continues to spend a high 17% of its revenue on research. The investment helps it compete in a rapidly changing industry. However, the stock trades at an expensive 34.3 times the $2.86 a share the company will likely earn for fiscal 2016.

Adobe is a hold.

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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SYMANTEC CORP. $22.92 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527- 8000; www.symantec.com; Shares outstanding: 615.5 million; Market cap: $14.2 billion; Dividend yield: 1.3%) sells computer-security technology, including antivirus and emailfiltering software, to businesses and consumers.

With Symantec you’re up 43.0% (including a $4-a-share special dividend) since we recommended it in our February issue as a top pick for 2016.

We made three top picks this year. In a period of rising market volatility and international tension, we felt it was more important than ever to diversify, rather than focus on a single pick for the year.

Our other two top picks for 2016 were WestJet and AGT Food & Ingredients (see page 67).

Symantec has now completed the purchase of privately held Blue Coat for $4.65 billion. That business contributes leadingedge software to protect clients from cyberattacks. As well, Blue Coat’s CEO Greg Clark has taken over at Symantec.

We think the stock, and our other two top picks, still has gains ahead. All three are buys.

— Pat McKeough

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MICROSOFT CORP., $60.53, Nasdaq symbol MSFT, is the world’s largest software company. Its Windows operating system powers about 90% of the world’s personal computers.

The company will raise its quarterly dividend by 8.3% with the December 2016 payment, to $0.39 a share from $0.36. The new annual rate of $1.56 yields 2.6%.

Microsoft also expects to complete its multi-year plan to buy back $40 billion of its shares by the end of 2016. As a result, it has authorized a new $40 billion share repurchase plan. That’s equal to 9% of its $465.1 billion market cap (the total value of all outstanding shares). There are no time limits for those purchases.

In the fiscal 2017 first quarter, ended September 30, 2016, the company’s revenue rose 3.1%, to $22.3 billion from $21.7 billion a year earlier. Earnings gained 5.8%, to $6.0 billion from $5.7 billion; due to fewer shares outstanding, earning per share rose 8.6%, to $0.76 from $0.70.

Research and development expenses have increased to 15.2% of revenue from 14.5% a year earlier. Microsoft has invested more time and funds in to developing cloud computing products.

The company’s dividend has grown an average of 14.3% annually over the last five years. Its TSI Dividend Sustainability Rating is Highest.

OUR RECOMMENDATION: Microsoft is a buy.

TEXAS INSTRUMENTS INC., $74.43, Nasdaq symbol TXN, mainly makes analog chips to convert inputs like touch, sound and pressure into the electronic signals computers understand.

With the November 2016 payment, the company increased its quarterly dividend by 31.6%, to $0.50 a share from $0.38. The new annual rate of $2.00 yields 2.7%.

In the third quarter of 2016, Texas Instruments’ revenue improved 7.2%, to $3.7 billion from $3.4 billion a year earlier. Earnings in the quarter gained 21.3%, to $968 million from $798 million; per-share earnings rose 23.7%, to $0.94 from $0.76 on fewer shares outstanding. The strong revenues and earnings reflect higher chip sales to automotive and industrial clients. Better efficiency at the company’s manufacturing plants also enhanced its profits.

As of September 30, 2016, Texas Instruments held cash and investments of $3.1 billion, or $3.13 a share; its $2.9 billion in long-term debt is a low 4% of its market cap.

The company’s dividend has grown an average of 24.1% annually over the last five years. Its TSI Dividend Sustainability Rating is Above Average.

OUR RECOMMENDATION: Texas Instruments is a buy.

CAMPBELL SOUP CO., $57.52, New York symbol CPB, makes a variety of foods under popular brands such as Campbell’s (condensed soups), V8 (beverages), Goldfish (snacks) and Bolthouse Farms (fresh carrots).

The company last raised its quarterly dividend by 12.2%, with the October 2016 payment. Investors now receive $0.35 a share; the annual rate of $1.40 yields 2.4%.

In the first quarter for fiscal 2017, ended October 30, 2016, the company’s revenue was $2.2 billion; that’s the same as a year earlier. Earnings rose 1.5% to $486 million from $479 million; due to fewer shares outstanding, earnings per share increased 5.3%, to $1.00 from $0.95 a year earlier. The higher earnings were mainly due to an ongoing cost-cutting plan and favorable currency exchange rates.

The company’s dividend has grown an average of 3.8% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Above Average.

OUR RECOMMENDATION: Campbell Soup is a buy.

METRO INC., $41.77, symbol MRU on Toronto, operates around 590 supermarkets and owns a network of over 250 drug stores in Quebec and Ontario.

Metro last raised its quarterly dividend by 20.0%, with the March 2016 payment. Investors now receive $0.14 a share for an annual rate of $0.56; the stock yields 1.3%.

In the quarter ended September 24, 2016, the company’s revenue rose 3.4%, to $2.9 billion from $2.8 billion a year earlier. Earnings jumped 10.1% to $145.0 million compared to $131.7 million. Earnings per share gained 15.4%, to $0.60 from $0.52. Metro’s recent investments in its stores continue to attract shoppers and offset lower food prices.

The company’s dividend has grown an average of 17.0% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Highest.

OUR RECOMMENDATION: Metro is a buy.

SYMANTEC CORP., $24.82, Nasdaq symbol SYMC, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

The company pays a quarterly dividend of $0.075 a share for an annual rate of $0.30; the stock yields 1.2%.

This week, Symantec announced it has agreed to pay $2.3 billion for LifeLock Inc. (New York symbol LOCK). That business sells identity-theft protection services to 4.4 million subscribers.

The company sees LifeLock as a way to boost its lagging consumer security business. It plans to bundle LifeLock’s services with its Norton anti-virus software. The addition of this business should spur Symantec’s sales and support its dividend.

As of September 30, 2016, the company held cash of $5.6 billion; its $6.6 billion in long-term debt is a manageable 43% of its market cap.

The stock’s TSI Dividend Sustainability Rating is Above Average.

OUR RECOMMENDATION: Symantec is a buy.

Our next Hotline will go out on Friday, December 2, 2016.

The post Dividend Advisor Hotline – Friday, November 25, 2016 appeared first on TSI Wealth Network.

DREAM OFFICE REIT, $17.71, symbol D.UN on Toronto, owns and manages 148 properties comprising 20.8 million square feet of office and retail space in major Canadian cities.

Earlier this year, Dream Office launched a three-year strategic plan to push up its unit price. Its strategy includes selling non-essential properties worth $1.2 billion in order to realize their full market value. Those buildings represent about 17% of its holdings. The trust has sold about $478 million in properties so far. It has agreements in place for another $330 million.

In the three months ended September 30, 2016, Dream’s revenue fell 2.1%, to $195.7 million from $201.7 million a year earlier. The company had 148 properties at the end of the latest quarter, down from 169 a year earlier. Cash flow per share fell 4.6%, to $0.62 from $0.71.

Under its three-year plan, the trust also cut its annualized distribution by 33.0%, to $1.50 from $2.24. This will lower its payout ratio to 66% of its forecast 2017 cash flow. The units now yield 8.5%.

Dream plans to use the proceeds from its property sales and from its lower distributions to pay down its high-interest debt, and possibly to buy back units.

OUR RECOMMENDATION: Dream Office REIT remains a buy.

Dream Office recent coverage

• July 2016 issue
• Hotline for June 10, 2016

SYMANTEC CORP., $24.82, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

The company announced this week that it has agreed to pay $2.3 billion for LifeLock Inc. (New York symbol LOCK). That business sells identity-theft protection services to 4.4 million subscribers.

With its recent purchase of privately held Blue Coat for $4.65 billion, Symantec now get 62% of its sales from corporations, up from 50%. That business makes products to protect the company’s over 15,000 corporate clients from cyberattacks through their websites and networks.

Symantec sees LifeLock as a way to boost its lagging consumer security business. It plans to bundle LifeLock’s services with its Norton consumer anti-virus software.

The main reason for the company’s weaker consumer sales is the consumer shift away from desktops to mobile devices. Whereas individual consumers typically buy anti-virus protection for their desktops, there is little demand for that service to protect smartphones, tablets and so on.

However, identity protection—including the products LifeLock offers—is an expanding market. Consumers are willing to pay for it even though it typically costs more than anti-virus protection.

LifeLock reported revenue of $170.3 million in the latest quarter. To put that in perspective, Symantec had revenue of $884 million.

OUR RECOMMENDATION: Symantec is a top pick for 2016.

Symantec recent coverage

• September 2016 issue
• Hotline for August 5, 2016

ALIMENTATION COUCHE-TARD INC., $63.21, symbol ATD.B on Toronto, operates 10,760 convenience stores throughout North America and Europe.

In the three months ended October 9, 2016, sales rose slightly, to $8.45 billion from $8.44 billion a year earlier (all figures except share price in U.S. dollars).

Earnings per share fell 12.1%, to $0.58 from $0.66. Couche-Tard’s profit margins on fuel sales were higher in the year-earlier quarter, along with fuel prices. Its income taxes were also up in the latest quarter.

Strong results have prompted the company to raise its quarterly dividend by 16.1%, to $0.09 (Canadian) from $0.0775. The shares now yield 0.6%.

Couche-Tard’s latest acquisitions are paying off. That includes its March 2015 purchase of The Pantry chain in the U.S. It paid $1.7 billion for that business.

More recently, the company bought 279 Esso gas stations in Ontario and Quebec from Imperial Oil for $1.7 billion. That deal closed in August 2016. As well, Couche-Tard will buy fuel and convenience-store chain CST Brands (symbol CST on New York) for $4.4 billion U.S. in cash. Its bid beat 7-Eleven’s. The deal is expected to close in early 2017.

Growth by acquisition adds risk, especially with deals as big as these. However, the company has a long record of successfully integrating those businesses.

OUR RECOMMENDATION: Alimentation Couche-Tard is still a buy.

Alimentation Couche-Tard recent coverage

• October 2016 issue
• Hotline for September 2, 2016

WESTJET AIRLINES LTD., $21.26, symbol WJA on Toronto, will partner with McDonald’s Canada (its parent, McDonald’s Corp., symbol MCD on New York, is a recommendation of our Wall Street Stock Forecaster newsletter) to serve the restaurant chain’s McCafe Premium Roast coffee on board its aircraft.

By December 1, 2016, WestJet will offer a complimentary McCafe Premium Roast coffee to all passengers across its fleet of Boeing 737 and 767 aircraft. The company’s regional airline, WestJet Encore, will follow later.

WestJet will serve the coffee in McCafe’s double-walled cups. Those branded cups will also have the popular on-cup rewards cards and peelable stickers that consumers can redeem at McDonald’s restaurants across Canada.

Tim Hortons and Starbucks Canada reportedly bid on the WestJet contract as well. Rival Air Canada currently uses Second Cup as its supplier.

OUR RECOMMENDATION: WestJet is a top pick for 2016

WestJet recent coverage

• December 2016 issue
• Hotline for November 4, 2016

EXTENDICARE INC., $9.77, symbol EXE on Toronto, owns 64 senior-care facilities, which can house 8,622 residents on either a long- and short-term basis. It manages another 54 residences that are home to 6,426 seniors.

Extendicare also operates 45 ParaMed Home Health Care branches in six provinces. ParaMed’s 10,900 staff members provide nursing care and other forms of assistance to clients who remain in their own homes.

In the three months ended September 30, 2016, the company’s revenue rose 5.7%, to $268.1 million from $253.6 million a year earlier. Cash flow jumped 38.6%, to $20.8 million, or $0.24 a share, from $15.0 million, or $0.17.

The cash flow gains came from higher government funding of long-term care operations. They also arose from profitable acquisitions. In April 2015, Extendicare purchased Revera Home Health for $83.6 million. As well, in late 2015, it bought four senior-care facilities in Ontario and Saskatchewan for $98.8 million. In February 2016, it acquired two more in Saskatchewan for $40.5 million.

Provinces regulate nursing home fees in Canada, and they provide substantial funding. Both of these are subject to extensive and frequently changing standards.

However, Extendicare’s cash flow is steady, and it’s in a growing business. The stock trades at 16.5 times the company’s forecast 2017 cash flow of $0.60 a share. It yields a high 4.9%.

OUR RECOMMENDATION: Extendicare is a buy.

Extendicare recent coverage

• October 2016 issue
• July 2016 issue

Our next Hotline will go out on Friday, December 2, 2016.

The post Stock Pickers Digest Hotline – Friday, November 25, 2016 appeared first on TSI Wealth Network.

ALIMENTATION COUCHE-TARD INC., $61.68, symbol ATD.B on Toronto, operates 10,547 convenience stores throughout North America and Europe.

Couche-Tard’s latest acquisitions continue to pay off. That includes its March 2015 purchase of The Pantry chain in the U.S. The company paid $1.7 billion for that business.

More recently, Couche-Tard paid Imperial Oil $1.7 billion for 279 prime Esso gas stations in Ontario and Quebec. That deal closed in August 2016. The company will also buy fuel and convenience store chain CST Brands (symbol CST on New York) for $4.4 billion U.S. Its bid beat 7-Eleven’s. The sale is expected to close in early 2017.

Growth by acquisition adds risk, especially with deals as big as these. However, the company has a long track record of successfully integrating those businesses.

OUR RECOMMENDATION: Alimentation Couche-Tard is a top pick for 2017.

Alimentation Couche-Tard recent coverage

• Hotline for November 25, 2016
• October 2016 issue

SYMANTEC CORP., $26.65, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

Last year, the company bought Blue Coat for $4.65 billion. That business makes products to protect clients from cyberattacks launched through their websites and networks. Blue Coat has also emerged as a leader in security for cloud computing. (That’s the storage of programs and data files on remote servers using the Internet). Currently, Blue Coat serves over 15,000 businesses, and its CEO, Greg Clark, has now taken over at Symantec.

In November 2016, the company agreed to pay $2.3 billion for LifeLock Inc. (New York symbol LOCK). That business sells identity-theft protection services to 4.4 million subscribers. Identity protection is an expanding market. Consumers are willing to pay for it even though it typically costs more than anti-virus protection.

OUR RECOMMENDATION: Symantec is a top pick for 2017.

Symantec recent coverage

• January 2017 issue
• Hotline for November 25, 2016

WESTJET AIRLINES LTD., $22.94, symbol WJA on Toronto, 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 airline carried a record 5.9 million passengers in the latest quarter. That’s up 7.0% from 5.5 million a year earlier. WestJet’s load factor also increased, to 84.0% from 81.8%. Load factor is the percentage of available seats that are occupied by paying passengers. The figure rose despite a 10.6% increase in capacity.

That greater capacity includes the airline’s launch of nonstop flights to London, England, and new sun destinations for winter travel.

Demand for WestJet’s flights remains high, and the company continues to enter into new partnerships with other airlines. Its regional air carrier, WestJet Encore, has also performed well and continues to expand its seat capacity.

OUR RECOMMENDATION: WestJet is a top pick for 2017.

WestJet recent coverage

• December 2016 issue
• Hotline for November 25, 2016

ADOBE SYSTEMS INC., $110.71, symbol ADBE on Nasdaq, makes software that lets computer users create, edit and share documents in the popular PDF format. Graphic designers also use its programs to create print publications and webpages.

The company plans to repurchase up to $2.5 billion of its common shares by November 2019. That’s equal to 5% of its $54.6 billion market cap (the value of all outstanding shares).

Share buybacks raise earnings per share and other per-share calculations. That gives the remaining shareholders a larger stake in the company.

This new plan will replace Adobe’s current authorization to buy back $2.0 billion of its shares. The company expects to complete purchases under that earlier plan in the next few weeks.

OUR RECOMMENDATION: Adobe is still a hold.

Adobe recent coverage

• Hotline for December 16, 2016
• December 2016 issue

STUART OLSON INC., $5.48, symbol SOX on Toronto, provides governments and businesses with construction, electrical contracting, earthmoving and insulation services. It mainly operates in Western Canada.

The company finished the three months ended September 30, 2016, with a near-record backlog of $2.1 billion. That includes the five-year, $500 million contract it won last year to provide maintenance, repair and operations support to an oil sands customer.

Stuart Olson continues to win more clients: it just announced that its construction business has been awarded roughly $250 million in new contracts. The largest of those agreements is a $220 million deal to retrofit existing facilities at two large post-secondary institutions in Western Canada. It has also won a $30 million five-year contact to maintain, repair and operate a new project site for a longstanding mining customer in Saskatchewan.

The company’s dividend yields a high 8.8% and appears safe.

Stuart Olson holds cash of $28.3 million, or $1.05 a share. However, its long-term debt of $116.8 million is a high 80% of its $145.6 million market cap. That adds a lot of risk.

OUR RECOMMENDATION: Stuart Olson is still a hold.

Stuart Olson recent coverage

• November 2016 issue
• Hotline for September 30, 2016

Our next Hotline will go out on Friday, January 27, 2017.

The post Stock Pickers Digest Hotline – Friday, January 20, 2017 appeared first on TSI Wealth Network.

ALARMFORCE INDUSTRIES INC., $10.60, symbol AF on Toronto, sells two-way voice-alarm systems and monitoring services in Canada and the U.S.

This week, the company reported financials for its latest fiscal year. They include its review of revenue from sales in fiscal 2015 that were later cancelled. AlarmForce also examined its current practice of classifying its installers as independent contractors.

The overall review came after the company received acquisition interest from a number of parties in early 2016. Several issues arose as prospective buyers conducted due diligence on AlarmForce’s books. As a result, the company restated its sales for the fiscal year ended October 31, 2015. They fell from $56.1 million to $55.2 million. That’s down 1.6%.

For the latest fiscal year, ended October 31, 2016, AlarmForce’s sales rose 2.1%, to $56.4 million from its restated sales of $55.2 million for the prior year.

The company lost $509,880, or $0.04 a share, in the latest quarter, compared to a profit of $4.4 million, or $0.38 a share, a year earlier. However, the loss reflects a one-time charge of $5.9 million, $0.51 a share. That charge includes the costs to review AlarmForce’s financial statements as well as the re-classification of its equipment installers. The company also incurred expenses related to the acquisition interest it received; in addition, it wrote down some obsolete equipment.

We first recommended AlarmForce at $1.03 a share for our fifth issue of Stock Pickers Digest in October 1998.

AlarmForce offers a good service, but it faces new competitors in the Canadian market, including Rogers Communications with its Smart Home Monitoring service. The high U.S. dollar boosts the contribution of its sales from that country, but the company must keep spending heavily in that highly competitive market in order to promote its services and further expand.

AlarmForce shares rose this week after the company reported the results of its review. We think now would be a good time to sell your shares of AlarmForce.

AlarmForce Industries recent coverage

• August 2016 issue
• Hotline June 17, 2016

OUR RECOMMENDATION: We see AlarmForce Industries as a sell.

TEMPUR SEALY INTERNATIONAL INC., $43.49, symbol TPX on New York, makes and distributes mattresses and neck pillows made of its patented memory foam, Tempur.

The company’s shares plunged over 30% this week after it terminated its contracts with Mattress Firm, its largest customer. Mattress Firm, through its 3,500 stores in 49 states, represents about 25% to 30% of Tempur Sealy’s U.S. sales.

The move followed demands by Mattress Firm that Tempur Sealy change their agreements to include “significant economic concessions.”

Mattress Firm was bought last year by South African home-furnishings retailer Steinhoff International. That retailer relied on Tempur Sealy as one of its primary suppliers of branded mattresses.

However, in many of its other international markets, Steinhoff owns both mattress factories and stores, and focuses less on name brands. Steinhoff could bring this strategy to the U.S. and increasingly rely on its own house brands.

Tempur Sealy believes that it offers the best products and that they deserve a premium price. But, as well as losing its biggest customer, the company still faces a lot of competition from other memory-foam mattress makers. They include its biggest rival, Serta.

In addition, the company faces competition from increasingly popular online retailers. Those retailers offer a limited (and so, cost-effective) range of memory-foam mattresses at fixed prices. As part of their service, they compress and ship their mattresses in suitcase-sized boxes. Tempur Sealy has launched its own website to compete in the low-cost online mattress market. It has branded those less-expensive mattresses as “Cocoon” beds. Even so, the company’s sales of cheaper mattresses take away business from its full-priced Tempur mattresses.

OUR RECOMMENDATION: We now see Tempur Sealy as a sell.

Tempur Sealy recent coverage

• January 2017 issue
• Hotline for October 28, 2016

SYMANTEC CORP., $28.41, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

The company recently acquired 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 64% of its sales from corporations, up from 50% before the acquisition. 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.

If you exclude costs to integrate Blue Coat and other unusual items, the company’s earnings jumped 21.5% in the three months ended December 30, 2016, to $209 million from $172 million a year earlier. Due to fewer shares outstanding, earnings per share gained 23.1%, to $0.32 from $0.26. That beat the consensus estimate of $0.28.

Revenue in the quarter rose 19.7%, to $1.09 billion from $909 million. That also exceeded the consensus forecast of $1.08 billion.

Symantec continues to use acquisitions to expand. It recently agreed to pay $2.3 billion for LifeLock Inc. (New York symbol LOCK). That business sells identity-theft protection services to 4.4 million subscribers. Identity protection is an expanding market. Consumers are willing to pay for it even though it typically costs more than anti-virus protection.

The company expects to complete this purchase by the end of February 2017. LifeLock will add roughly $600 million to Symantec’s annual revenue.

OUR RECOMMENDATION: Symantec is a top pick for 2017.

Symantec recent coverage

• February 2017 issue
• Hotline for January 20, 2017

CALIAN GROUP LTD., $28.00, symbol CGY on Toronto, has two main operations: 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 its fiscal first quarter, ended December 31, 2016, the company’s revenue rose 6.5%, to $68.7 million from $64.5 million a year earlier. Excluding one-time items, Calian earned $3.4 million, or $0.45 a share. That’s up 3.0% from $3.3 million, or $0.45 a share.

The Business and Technology Services operations continues to service repeat orders from several Canadian federal departments. They include the Department of National Defence. Overall revenue for this Calian business rose 8.2% in the latest quarter.

Revenue at the Systems Engineering business rose 2.3%. It continues to win contracts with the Canadian Space Agency to provide support for its satellite operations.

Calian holds cash of $19.2 million, or $2.56 a share, and has no debt. The stock trades at 14.6 times its latest fiscal-year earnings of $1.92 a share. Calian pays a quarterly dividend of $0.28. That gives it a high 4.0% yield.

OUR RECOMMENDATION: Calian Group is still a buy.

Calian Group recent coverage

• Hotline for November 11, 2016
• October 2016 issue

FAIR ISAAC CORP., $124.54, symbol FICO on New York, is best known for its FICO Scores software. They let lenders make better decisions about customer creditworthiness. The company also makes programs that help credit card issuers reduce fraud and analyze the spending patterns of cardholders.

For the first quarter, ended December 31, 2016, revenue rose 9.8%, to $219.6 million from $200.1 million a year earlier. Sales of Fair Isaac’s computer applications (61% of the total) rose 12% on higher demand for marketing and fraud-detection software. Sales of its credit-scoring programs (27%) rose 6%, while sales of analytics software (12%) rose 12%.

The company earned $33.5 million, or $1.03 a share, in the latest quarter. That’s up 4.4% from $32.1 million, or $0.99. New employees and software to support its growth increased costs.

Fair Isaac expects to earn $4.92 a share for all of the current fiscal year. The stock trades at 25.3 times the forecast. That’s a somewhat high multiple considering banks supply 75% of the company’s revenue and any increase in interest rates could slow mortgage demand. That kind of rise could also hurt sales of Fair Isaac’s credit-scoring software.

OUR RECOMMENDATION: Fair Isaac Corp. is still a hold.

Fair Isaac Corp. recent coverage

• December 2016 issue
• November 2016 issue

Our next Hotline will go out on Friday, February 10, 2017.

The post Stock Pickers Digest Hotline – Friday, February 3, 2017 appeared first on TSI Wealth Network.

In addition to Alphabet, we also like the outlook for these three tech leaders. However, after their recent price gains, only two are buys.

ADOBE SYSTEMS INC. $104 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 497.2 million; Market cap: $51.7 billion; Price-to-sales ratio: 9.4; No dividends paid since June 2005; TSINetwork Rating: Average; www. adobe.com) makes software that lets computer users create, edit and share documents in the popular PDF format. Graphic designers also use its programs to create print publications and webpages.

The company recently agreed to pay $540 million for TubeMogul Inc. (Nasdaq symbol TUBE). Adobe expects to complete the purchase in early 2017.

TubeMogul specializes in video advertising. Its products let advertisers and advertising agencies better plan the placement, purchase and optimization of their online advertising.

TubeMogul uses data gathering to place video ads on websites that an individual consumer trusts and regularly visits. That means a web ad can follow a consumer as he or she browses the web.

Video advertising is the industry’s fastest growing category. Adobe already leads the video-content-creation market, with its Premiere Pro CC and Primetime software. The TubeMogul purchase will let it offer a wider range of services in this area.

The company can easily afford to keep making strategic acquisitions. As of September 9, 2016, it held cash of $4.45 billion, or $8.95 a share. Moreover, its longterm debt is just $1.9 billion, or 4% of its market cap.

The stock is up 14% this past year, and now trades at a high 34.9 times the $2.98 a share Adobe will likely earn for its 2016 fiscal year; it ends November 30, 2016. The company also gets 40% of its revenue from Europe and Asia, and the high U.S. dollar hurts the contribution of its overseas businesses.

Adobe is a hold.

NVIDIA CORP. $94 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 535.0 million; Market cap: $50.3 billion; Price-to-sales ratio: 8.2; Dividend yield: 0.6%; TSINetwork Rating: Average; www.nvidia.com) is a leading designer of 3D-capable video chips; that technology makes video games run smoothly and appear more lifelike. The company outsources most of its production to Asian chipmakers.

The stock hit an all-time high of $95 in November 2016 after the company reported record revenue and earnings for its fiscal 2017 third quarter, ended October 30, 2016.

Revenue in the quarter jumped 53.6%, to $2.0 billion from $1.3 billion a year earlier. Thanks to Nvidia’s new Pascal chips, revenue from gaming platforms (62% of the total) rose 63.5%. The company’s revenue from chips that run datacentres (12%) rose 192.7%; sales of chips for virtual reality systems (10%) were up 8.9% while sales of chips that power automotive systems (6%) gained 60.8%. Sales of other chips (10%) fell 3.6%.

The company’s earnings shot up 123.5% in the quarter, to $507 million from $255 million. Earnings per share gained 104.3%, to $0.94 from $0.46, on more shares outstanding.

Nvidia spent $373 million (or 18.6% of its revenue) on research in the quarter. That’s up 13.4% from $329 million (or 25.2% of revenue) a year earlier.

The company will probably earn $1.85 a share for all of fiscal 2017, and the stock trades at a very high 50.8 times that estimate. That makes Nvidia vulnerable to a sudden drop if its growth begins to slow. Its pays quarterly dividends of $0.14, for an annualized yield of 0.6%.

Nvidia is a hold.

SYMANTEC CORP. $25 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 623.4 million; Market cap: $15.6 billion; Price-to-sales ratio: 4.3; Dividend yield: 1.2%; TSINetwork Rating: Average; www.symantec.com) sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

The company recently completed its 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; it 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 edge over competitors Palo Alto Networks, FireEye and Check Point Software.

Thanks to this purchase, Symantec’s revenue in its fiscal 2017 second quarter, ended September 30, 2016, rose 12.0%, to $1.0 billion from $906 million a year earlier. Overall earnings fell 2.0%, to $192 million from $196 million. However, per share earnings rose 3.4%, to $0.30 from $0.29, on fewer shares outstanding.

The company continues to shift clients over to its cloudbased service. That’s where they access Symantec’s services on the Internet. The shift hurts near-term revenue, but should increase long-term retention. Higher costs also hurt earnings. To address that, the company will cut 1,200 positions, or 10% of its workforce, and close some facilities. Those moves should cut $550 million from its annual costs.

Symantec ended the quarter with cash of $5.6 billion, or $9.01 a share. Its long-term debt of $6.6 billion is a manageable 42% of its market cap.

In November 2016, the company agreed to pay $2.3 billion for LifeLock Inc. (New York symbol LOCK). That business sells identity-theft protection services to 4.4 million subscribers. Symantec plans to bundle these services with its Norton anti-virus software.

Excluding LifeLock, the company will probably earn $1.15 a share for all of fiscal 2017. The stock is up 25% in the past year and trades at 21.7 times the 2017 earnings forecast. That’s an acceptable p/e, particularly as more businesses and governments look to protect sensitive information from online intruders. The $0.30 dividend yields 1.2%.

Symantec is a buy.

The post These tech stocks have hit new highs appeared first on TSI Wealth Network.

SYMANTEC CORP. $24.84 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec. com; Shares outstanding: 623.4 million; Market cap: $15.5 billion; Divd. yield: 1.2%) will pay $2.3 billion for LifeLock Inc. (New York symbol LOCK). That business sells identity-theft protection services to 4.4 million subscribers.

Symantec sees LifeLock as a way to boost its lagging consumer security business.

The shift from desktop computers to mobile devices has weakened sales of consumer anti-virus software. Individuals typically buy anti-virus protection for their desktops—but there is little demand for that service to protect smartphones and tablets.

Symantec was a top pick for 2016. It’s still a buy.

The post SYMC adds a niche appeared first on TSI Wealth Network.

We have lots of attractive long-term buys among the stocks we cover, and we’re positive on the long-term outlook for stocks. We feel just as strongly about the need to diversify.

That’s why we’ve chosen three top picks for 2017 from our Stock Pickers Digest recommendations. Each is a high-quality stock that offers particularly strong prospects based on a sound growth strategy.

ALIMENTATION COUCHE-TARD $61.68 (Toronto symbol ATD.B: TSINetwork Rating: Average) (1-800-361-2612; www.couchetard.com; Shares outstanding: 567.4 million; Market cap: $35.5 billion; Dividend yield: 0.6%) operates 10,547 convenience stores throughout North America and Europe.

In the three months ended October 9, 2016, sales increased to $8.45 billion from $8.44 billion a year earlier (all figures except share price in U.S. dollars). Earnings per share fell 12.1%, to $0.58 from $0.66. That decline was mostly due to exceptionally high profit margins on the company’s fuel sales a year earlier. Couche-Tard’s income taxes were also lower a year ago.

The company’s strong outlook has prompted it to raise its quarterly dividend. With the December 2016 payment, that payout increased 16.1%, to $0.09 (Canadian) from $0.0775. The shares now yield 0.6%.

Couche-Tard’s latest acquisitions continue to pay off. That includes its March 2015 purchase of The Pantry chain in the U.S. The company paid $1.7 billion for that business.

More recently, Couche-Tard paid Imperial Oil $1.7 billion for 279 prime Esso gas stations in Ontario and Quebec. That deal closed in August 2016. The company will also buy fuel and convenience store chain CST Brands (symbol CST on New York) for $4.4 billion U.S. Its bid beat 7-Eleven’s. The sale is expected to close in early 2017.

Growth by acquisition adds risk, especially with deals as big as these. However, the company has a long track record of successfully integrating those businesses.

Alimentation Couche-Tard is a top pick for 2017.

SYMANTEC CORP. $26.41 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 623.4 million; Market cap: $16.3 billion; Dividend yield: 1.1%) sells computersecurity technology, including antivirus and email-filtering software, to businesses and consumers.

Last year, the company bought 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; it serves over 15,000 businesses. As well, Blue Coat’s CEO Greg Clark has taken over at Symantec.

Thanks to this purchase, the company’s revenue in its fiscal 2017 second quarter, ended September 30, 2016, rose 12.0%, to $1.0 billion from $906 million a year earlier. Pershare earnings rose 3.4%, to $0.30 from $0.29.

In November 2016, Symantec agreed to pay $2.3 billion for LifeLock Inc. (New York symbol LOCK). That business sells identity-theft protection services to 4.4 million subscribers. Identity protection is an expanding market. Consumers are willing to pay for it even though it typically costs more than anti-virus protection.

The company continues to shift clients over to its cloudbased service. That’s where they access Symantec’s services on the Internet. The move slows near-term revenue, but increases long-term retention.

Symantec is a top pick for 2017.

WESTJET AIRLINES $23.20 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www. westjet.com; Shares outstanding: 123.3 million; Market cap: $2.7 billion; Dividend yield: 2.4%) 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 the three months ended September 30, 2016, WestJet’s revenue rose 7.6%, to $1.12 billion from $1.05 billion a year earlier. The airline earned $116.0 million, or $0.97 a share. That’s a gain of 13.9% from $101.8 million, or $0.82 a share, a year earlier.

WestJet carried a record 5.9 million passengers in the latest quarter. That’s up 7.0% from 5.5 million a year earlier. The carrier’s load factor also increased to 84.0% from 81.8%. Load factor is the percentage of available seats that are occupied by paying passengers. The figure rose despite a 10.6% increase in capacity.

That greater capacity includes WestJet’s launch of nonstop flights to London, England, and new sun destinations for winter travel.

Demand for the company’s flights remains high, and WestJet continues to enter into new partnerships with other airlines. Its regional air carrier, WestJet Encore, has also performed well and continues to expand its seat capacity.

WestJet is a top pick for 2017.

The post Here are our top picks for 2017 appeared first on TSI Wealth Network.

BLACKBERRY LTD., $11.52, Toronto symbol BB, provides wireless communication services, mainly to businesses and government agencies.

The stock jumped 12% this week after an arbitrator awarded the company $814.9 million U.S. in its licensing dispute with computer chip maker Qualcomm Inc. (Nasdaq symbol QCOM). That payment is equal to 62% of BlackBerry’s annual revenue of $1.3 billion U.S.

BlackBerry accused Qualcomm of overcharging for its patents. The two firms later agreed to settle the case through binding arbitration.

The company has not yet said what it plans to do with the cash. However, the extra funds should help it with its long-term plan to focus on software for secure communication networks and self-driving cars.

OUR RECOMMENDATION: BlackBerry is still a hold.

BlackBerry recent coverage

• March 2017 issue
• February 2017 issue

BOMBARDIER INC., Toronto symbols BBD.A $2.36 and BBD.B $2.27, is the world’s third-largest maker of commercial aircraft, after Boeing (No.1) and Airbus (No. 2). It’s also a leading maker of commuter trains.

The stock gained 12% this week in response to media reports that the company and Germany’s Siemens AG may merge their railcar operations.

It’s unclear which firm would control such a joint venture, particularly since Bombardier sold 30% of its railcar division in 2016 to the Caisse de dépôt et placement du Québec. It manages the province’s public pension plan.

If the two railcar operations do merge, that would help them compete with Chinese competitors. However, anti-trust regulators would likely force them to sell certain assets.

OUR RECOMMENDATION: Bombardier is still a hold.

Bombardier recent coverage

• Hotline for February 10, 2017
• February 2017 issue

CENOVUS ENERGY INC., $14.26, Toronto symbol CVE, recently agreed to acquire full control of its main oil sands properties in Alberta.

Right now, the company owns 50% of the Christina Lake and Foster Creek oil sands projects; ConocoPhilips (New York symbol COP) owns the other 50%.

Under the terms of the deal, Cenovus will buy ConocoPhillips’ interest in both properties, along with ConcoPhillips’ conventional oil fields in Alberta and B.C.

In all, it will pay $17.7 billion, consisting of $14.1 billion in cash plus 208 million Cenovus common shares. That price is 21% higher than the company’s market cap of $14.6 billion.

The company has secured 75% of the financing for this deal. That includes selling 187.5 million common shares at $16.00 a share for gross proceeds of $3.0 billion. Cenovus has also sold $3.9 billion in new notes and arranged $4.6 billion in other loans.

After it completes the purchase in the next few weeks, Cenovus will hold cash of $1 billion and have unused credit lines of $3 billion. Based on the extra production and an oil price of $50.00 U.S. (West Texas Intermediate), the company expects to generate $500 million of free cash flow (cash flow less capital expenditures) in 2018. That, along with sales of less-important properties, will help Cenovus pay down its debt.

OUR RECOMMENDATION: Cenovus is still a buy.

Cenovus recent coverage

• April 2017 issue
• Hotline for March 31, 2017

SHAWCOR LTD., $38.11, Toronto symbol SCL, makes sealants and coatings that keep oil and gas pipelines from rusting. It also manufactures industrial products such as electrical wire and protective sheaths.

The company has won a contract to coat a new pipeline that will pump natural gas to power plants in Thailand. It expects to complete this project in late 2018.

The deal is worth $40 million. That’s small next to ShawCor’s annual revenue of $1.2 billion. However, it should help the company win more contracts in Asia.

OUR RECOMMENDATION: ShawCor is a buy.

ShawCor recent coverage

• Hotline for March 10, 2017
• Hotline for January 6, 2017

SNC-LAVALIN GROUP INC., $53.34, Toronto symbol SNC, is a leading Canadian engineering and construction company that specializes in large-scale public works projects such as roads, bridges, transit systems and water-treatment plants.

SNC announced several new contracts this week. Those include a deal from Colombia’s main pipeline operator to design and build two compression facilities that will speed up the transmission of gas between cities. The company will receive $35 million U.S. under that deal; that’s less than 1% of it 2016 revenue of $8.5 billion.

The operators of the Hibernia offshore oil platform near Newfoundland have also extended SNC’s existing contract to inspect the facility. This deal includes the new Hebron offshore platform, which should begin operating later this year. SNC has yet to reveal how much the contract extension is worth.

OUR RECOMMENDATION: SNC-Lavalin is a hold.

SNC-Lavalin recent coverage

• Hotline for April 7, 2017
• Hotline for March 10, 2017

RESTAURANT BRANDS INTERNATIONAL INC., $56.09, symbol QSR on New York, is the world’s third-largest fast-food operator after McDonald’s (No. 1) and Yum Brands (No. 2). It has 15,243 Burger King outlets and 4,492 Tim Hortons stores, in 100 countries.

Restaurant Brands has also just bought Popeyes Louisiana Kitchen Inc. (symbol PLKI on Nasdaq) for $1.64 billion.

Restaurant Brands plans to open its first U.K. Tim Hortons next month in Glasgow, Scotland. The first location will be on Argyle Street, one of the main shopping streets in the city centre.

Tim Hortons then plans to rapidly roll out more stores in the U.K. over the next 12 months.

OUR RECOMMENDATION: Restaurant Brands International is still a hold.

Restaurant Brands recent coverage

• Hotline for April 7, 2017
• April 2017 issue

COLLIERS INTERNATIONAL GROUP INC., $63.25, symbol CIGI on Toronto, is one of the world’s top three commercial real estate firms, offering a range of services in the U.S., Canada, Europe, Australia, New Zealand, Asia and Latin America.

The company has 15,000 employees operating from 500 offices in 68 countries.

Colliers continues to grow by acquisition. Its latest buy is WelshCo LLC. It has yet to reveal the terms of the purchase.

WelshCo has 240 professionals operating in the greater Minneapolis-St. Paul area of Minnesota. The company provides investment sales, lease brokerage, property management, facilities management and architecture services. It also offers project management services to local, regional, national and global clients.

OUR RECOMMENDATION: Colliers International remains a hold.

Colliers International recent coverage

• Hotline for February 17, 2017
• February 2017 issue

NISSAN MOTOR CO., $18.43, symbol NSANY on Nasdaq, is Japan’s second-largest automaker, after Toyota.

In March 2017, the company sold a record 168,832 vehicles in the U.S. That’s up 3.2% from March 2016.

Sales of crossovers, pickup trucks and sport utility vehicles (53% of the total) increased 28.8%. That’s thanks to strong sales of the mid-sized crossover Rogue (up 42.6%). Among the vehicles that compete with the Rogue are Toyota’s RAV4, Honda’s CR-V and Ford’s Escape.

Nissan’s car sales (47% of the total) fell 15.4%. Lower sales of the Versa, Sentra and Altima offset higher demand for the Maxima.

OUR RECOMMENDATION: Nissan is a buy.

Nissan recent coverage

• April 2017 issue
• Hotline for March 10, 2017

SYMANTEC CORP., $30.04, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

The company recently formed Symantec Ventures, a cybersecurity venture capital business that aims to serve as an incubator for startup firms. That support could include funding as well as access to Symantec software that lets startups accelerate their development.

Symantec Ventures is looking to invest in new and emerging technologies to add to the company’s portfolio such as analytics and artificial intelligence.

The new business could ultimately give Symantec access to possible acquisition prospects. For example, the company already has a close relationship with Appthority, a mobile app security vendor. Symantec has invested in the firm, which identifies and protects against mobile threats targeting companies through mobile devices, apps, and data networks

OUR RECOMMENDATION: Symantec is a top pick for 2017.

Symantec recent coverage

• March 2017 issue
• Hotline for February 3, 2017

WESTJET AIRLINES LTD., $22.92, symbol WJA on Toronto, has hired airline industry information technology veteran Craig Maccubbin as chief information officer.

Maccubbin was chief technology officer at Southwest Airlines (symbol LUV on New York) over the past four years. There, he oversaw a staff of 500 employees in the information technology and mobile applications area.

Southwest Airlines is one of the largest carriers in the U.S. by revenues and the largest by passengers flown. The company specializes in low fares and short-haul flights. It has a market cap of $33.9 billion compared to WestJet’s market cap of $2.7 billion.

Computer systems are increasingly important for airlines, handling everything from bookings and passenger check-in, to crew scheduling and bag tracing. The systems also need to meet the expanding demands of smartphone and mobile access.

A major computer failure in August 2016 at Delta Airlines, the second-largest carrier in the U.S., forced it to cancel more than 2,000 flights over a number of days and cost upwards of $100 million in lost revenue.

OUR RECOMMENDATION: WestJet is a top pick for 2017.

WestJet recent coverage

• March 2017 issue
• February 2017 issue

AT&T INC., $40.28, New York symbol T, is the largest wireless provider in the U.S. It also sells TV cable packages, and high-speed Internet and landline phone services.

This week, the company agreed to acquire Straight Path Communications Inc. (New York symbol STRP).

Straight Path’s main assets are a portfolio of licenses for wireless frequencies. They will help AT&T with its plan to offer 5G wireless services, which are up to 10 times faster than its current 4G networks. Faster networks will let AT&T attract new subscribers with new wireless services, such as high-definition video streaming.

AT&T will pay $1.6 billion for Straight Path. That’s less than 1% of its $248.3 billion market cap (the total value of all outstanding shares). The company expects to complete the purchase within the next 12 months.

OUR RECOMMENDATION: AT&T is a buy.

AT&T recent coverage

• February 2017 issue
• Hotline for December 2, 2016

BHP BILLITON LTD. ADRs, $36.09, New York symbol BHP, is a leading producer of iron ore, oil and natural gas, copper and coal. It operates in Australia, the U.S., U.K., Chile and South Africa.

Activist investment firm Elliott Management, which owns 4.1% of BHP, has announced several proposals to help unlock the company’s value. Those include incorporating BHP as a single corporation based in Australia (right now, the company is headquartered in both Australia and the U.K.); and spinning off its U.S. oil operations as a separate firm.

Elliott claims these moves, along with using BHP’s excess cash flow to buy back shares, would increase the stock price by about 50%.

The company has rejected Elliott’s proposals. It feels its U.S. oil business would struggle to raise capital without access to BHP’s strong balance sheet. As well, having its shares trade in Australia and the U.K. makes it easier for the company to issue stock as part of any future acquisitions.

OUR RECOMMENDATION: BHP Billiton is still a hold.

BHP Billiton recent coverage

• February 2017 issue
• September 2016 issue

PROCTER & GAMBLE CO., $90.03, New York symbol PG, is one of the world’s largest makers of household and personal-care goods. Major brands include Tide (laundry detergent), Pampers (diapers), Gillette (razors) and Crest (toothpaste).

Starting with the May 2017 payment, the company will raise its quarterly dividend by 3.0%, to $0.6896 a share from $0.6695. The new annual rate of $2.76 yields 3.1%. Procter has paid dividends for 127 years and has increased its payout annually for the past 61.

Meantime, activist investor Nelson Peltz—his firm Trian Partners owns 1% of Procter—continues to pressure the company to improve shareholder value. He wants it to set up its less-profitable businesses as separate companies and further cut its costs.

Procter already spun off its beauty products business in 2016. It’s also improving productivity at its remaining operations. Those moves should help it cope with the growing number of people who buy razors and other personal care items over the Internet.

Even if the company decides against more spinoffs, Trian’s involvement should continue to draw investor attention to Procter’s improving long-term prospects.

OUR RECOMMENDATION: Procter & Gamble is a buy.

Procter & Gamble recent coverage

• March 2017 issue
• Hotline for February 17, 2017

MTS SYSTEMS INC., $46.25, Nasdaq symbol MTSC, makes equipment and software that manufacturers use to test the behaviour of materials, machines and structures. This helps them reduce production costs and errors. MTS also makes sensors for industrial equipment.

The company had to put off filing the earnings for its fiscal 2017 first quarter, ended December 31, 2016. The delay was due to its investigation of certain executives at its Chinese operations. Specifically, those individuals formed a new firm that competes directly with MTS. In response, the company has tightened its oversight procedures.

Now that MTS has completed its investigation, it has reported first-quarter earnings of $1.7 million, or $0.09 a share. That’s down 85.5% from $11.8 million, or $0.78, a year earlier.

The latest results include PCB Group Inc., which MTS purchased in July 2016 for $580.0 million. PCB makes sensors and instruments for measuring pressure, load, torque, shock and vibrations.

If you disregard costs related to the China investigation and the integration of PCB, the company earned $0.55 a share in the latest quarter. Revenue gained 10.4%, to $131.1 million from $118.8 million.

OUR RECOMMENDATION: MTS Systems is still a hold.

MTS Systems recent coverage

• March 2017 issue
• Hotline for December 2, 2016

INTERNATIONAL FLAVORS & FRAGRANCES INC., $131.94, New York symbol IFF, makes over 38,000 compounds that improve the taste of food and the smell of consumer products.

The company has acquired Oregon-based Columbia Phytotechnology. Operating under the PowderPure name, this private firm has developed a patented drying process that removes water from (or desiccates) fruits and vegetables. That dried substance is then ground into powdered flavourings for commercial foodmakers.

IFF has not yet said how much it paid for this firm. However, the new operations will help it take advantage of growing consumer demand for natural and organic foods.

OUR RECOMMENDATION: IFF is a buy.

IFF recent coverage

• April 2017 issue
• Hotline for November 4, 2016

Our next Hotline will go out on Friday, April 21, 2017.

The post Inner Circle Hotline appeared first on TSI Wealth Network.

RESTAURANT BRANDS INTERNATIONAL INC., $56.09, symbol QSR on New York, is the world’s third-largest fast-food operator after McDonald’s (No. 1) and Yum Brands (No. 2). It has 15,243 Burger King outlets and 4,492 Tim Hortons stores, in 100 countries.

Restaurant Brands has also just bought Popeyes Louisiana Kitchen Inc. (symbol PLKI on Nasdaq) for $1.64 billion.

Restaurant Brands plans to open its first U.K. Tim Hortons next month in Glasgow, Scotland. The first location will be on Argyle Street, one of the main shopping streets in the city centre.

Tim Hortons then plans to rapidly roll out more stores in the U.K. over the next 12 months.

OUR RECOMMENDATION: Restaurant Brands International is still a hold.

Restaurant Brands recent coverage

• Hotline for April 7, 2017
• April 2017 issue

COLLIERS INTERNATIONAL GROUP INC., $63.25, symbol CIGI on Toronto, is one of the world’s top three commercial real estate firms, offering a range of services in the U.S., Canada, Europe, Australia, New Zealand, Asia and Latin America.

The company has 15,000 employees operating from 500 offices in 68 countries.

Colliers continues to grow by acquisition. Its latest buy is WelshCo LLC. It has yet to reveal the terms of the purchase.

WelshCo has 240 professionals operating in the greater Minneapolis-St. Paul area of Minnesota. The company provides investment sales, lease brokerage, property management, facilities management and architecture services. It also offers project management services to local, regional, national and global clients.

OUR RECOMMENDATION: Colliers International remains a hold.

Colliers International recent coverage

• Hotline for February 17, 2017
• February 2017 issue

NISSAN MOTOR CO., $18.43, symbol NSANY on Nasdaq, is Japan’s second-largest automaker, after Toyota.

In March 2017, the company sold a record 168,832 vehicles in the U.S. That’s up 3.2% from March 2016.

Sales of crossovers, pickup trucks and sport utility vehicles (53% of the total) increased 28.8%. That’s thanks to strong sales of the mid-sized crossover Rogue (up 42.6%). Among the vehicles that compete with the Rogue are Toyota’s RAV4, Honda’s CR-V and Ford’s Escape.

Nissan’s car sales (47% of the total) fell 15.4%. Lower sales of the Versa, Sentra and Altima offset higher demand for the Maxima.

OUR RECOMMENDATION: Nissan is a buy.

Nissan recent coverage

• April 2017 issue
• Hotline for March 10, 2017

SYMANTEC CORP., $30.04, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

The company recently formed Symantec Ventures, a cybersecurity venture capital business that aims to serve as an incubator for startup firms. That support could include funding as well as access to Symantec software that lets startups accelerate their development.

Symantec Ventures is looking to invest in new and emerging technologies to add to the company’s portfolio such as analytics and artificial intelligence.

The new business could ultimately give Symantec access to possible acquisition prospects. For example, the company already has a close relationship with Appthority, a mobile app security vendor. Symantec has invested in the firm, which identifies and protects against mobile threats targeting companies through mobile devices, apps, and data networks

OUR RECOMMENDATION: Symantec is a top pick for 2017.

Symantec recent coverage

• March 2017 issue
• Hotline for February 3, 2017

WESTJET AIRLINES LTD., $22.92, symbol WJA on Toronto, has hired airline industry information technology veteran Craig Maccubbin as chief information officer.

Maccubbin was chief technology officer at Southwest Airlines (symbol LUV on New York) over the past four years. There, he oversaw a staff of 500 employees in the information technology and mobile applications area.

Southwest Airlines is one of the largest carriers in the U.S. by revenues and the largest by passengers flown. The company specializes in low fares and short-haul flights. It has a market cap of $33.9 billion compared to WestJet’s market cap of $2.7 billion.

Computer systems are increasingly important for airlines, handling everything from bookings and passenger check-in, to crew scheduling and bag tracing. The systems also need to meet the expanding demands of smartphone and mobile access.

A major computer failure in August 2016 at Delta Airlines, the second-largest carrier in the U.S., forced it to cancel more than 2,000 flights over a number of days and cost upwards of $100 million in lost revenue.

OUR RECOMMENDATION: WestJet is a top pick for 2017.

WestJet recent coverage

• March 2017 issue
• February 2017 issue

Our next Hotline will go out on Friday, April 21, 2017.

The post Stock Pickers Digest Hotline – Thursday, April 13, 2017 appeared first on TSI Wealth Network.

HOME CAPITAL GROUP INC., $19.25, symbol HCG on Toronto, is a mortgage lender serving borrowers who fail to meet the stricter standards of Canada’s big banks and other larger, traditional lenders.

With the December 2016 payment, Home Capital raised its quarterly dividend by 8.3%, to $0.26 per share from $0.24. The new annual rate of $1.04 yields 5.4%.

The stock fell 11% this week after the Ontario Securities Commission (OSC) formally charged the company with failing to disclose material information in a timely manner and making false and misleading statements. The charges also cover three of its executives: former chief executive officer Martin Reid; former president and CEO Gerald M. Soloway (who is still a director of the company); and the current chief financial offer Robert Morton.

Home Capital offers most of its loans through 4,000 independent mortgage brokers. In July 2015, it cut ties with 45 brokers after it accused them of submitting loan applications with falsified income statements. The company has since reviewed all of the loans in question, and found no irregularities.

The OSC alleges that Home Capital knew of these problems several months before it disclosed that information. It also accuses the company’s officers of misattributing a decline in new mortgage loans to external factors, such as bad weather, instead of problems with those 45 brokers.

Home Capital feels it has complied with its disclosure requirements, and it plans to challenge these charges.

The company is still profitable. It earned $1.02 a share in the three months ended March 31, 2017, up 6.3% from $0.96 a year earlier. As well, bad loans as a percentage of total loans fell to 0.24% as of March 31, 2017, from 0.34% a year ago.

However, the stock will likely remain under pressure until Home Capital settles these charges and installs a new permanent CEO. As well, the Ontario government has announced new taxes and other regulations that aim to slow the rapid increase of residential housing prices in Toronto and surrounding areas. In the long term, that could hurt demand for new mortgage loans. On the other hand, it could possibly increase demand.

Over the last 5 years, the stock has had an average annual dividend growth rate of 18.8%. Home Capital also has an Above Average TSI Dividend Sustainability Rating.

OUR RECOMMENDATION: Home Capital Group is now a hold.

SYMANTEC CORP., $30.70, Nasdaq symbol SYMC, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

Symantec pays a quarterly dividend of $0.075 a share for an annual rate of $0.30; the stock yields 1.0%.

The company recently formed Symantec Ventures, a cybersecurity venture capital business, to serve as an incubator for startup firms. That support could include funding as well as access to Symantec software that lets those new businesses accelerate their development.

Symantec Ventures is looking to invest in new and emerging technologies, such as analytics and artificial intelligence, to add to the company’s portfolio of products.

The new business could ultimately give Symantec access to prospective acquisitions. For example, the company already has a close relationship with Appthority, a mobile app security vendor. Symantec has invested in the firm, which identifies and blocks mobile threats that target companies through mobile devices, apps, and data networks.

The stock’s TSI Dividend Sustainability Rating is Average.

OUR RECOMMENDATION: Symantec is a buy.

AT&T INC., $39.93, New York symbol T, is the largest wireless provider in the U.S. It also sells TV cable packages, and high-speed Internet and landline phone services.

The company last raised its quarterly dividend by 2.08% with the February 2017 payment. Investors now receive $0.49 a share. That makes for an annual yield of 4.9%.

Recently, the company agreed to acquire Straight Path Communications Inc. (New York symbol STRP).

Straight Path’s main assets are a portfolio of licenses for wireless frequencies. They will help AT&T with its plan to offer 5G wireless services, which are up to 10 times faster than the current 4G networks. Faster networks will let AT&T attract new subscribers with new wireless services, such as high-definition video streaming.

AT&T will pay $1.6 billion for Straight Path. That’s less than 1% of its $245.7 billion market cap (the total value of all outstanding shares). The company expects to complete the purchase within the next 12 months.

The company’s dividend has grown at an average annual rate of 2.2% in the past 5 years. The stock’s TSI Dividend Sustainability Rating is Highest.

OUR RECOMMENDATION: AT&T is a buy.

PROCTER & GAMBLE CO., $88.62, New York symbol PG, is one of the world’s largest makers of household and personal-care goods. Major brands include Tide (laundry detergent), Pampers (diapers), Gillette (razors) and Crest (toothpaste).

Starting with the May 2017 payment, the company will raise its quarterly dividend by 3.0%, to $0.6896 a share from $0.6695. The new annual rate of $2.76 yields 3.1%. Procter has paid dividends for 127 years and has increased its payout annually for the past 61.

Meantime, activist investor Nelson Peltz—his firm, Trian Partners, owns 1% of Procter—continues to pressure the company to improve shareholder value. He wants it to set up its less-profitable businesses as separate companies and further cut costs.

Procter already spun off its beauty products business in 2016. It’s also improving productivity at its remaining operations. Those moves should help it cope with the growing number of people who buy razors and other personal care items over the Internet.

Even if the company decides against more spinoffs, Trian’s involvement should continue to draw investor attention to Procter’s improving long-term prospects.

Procter’s payout has grown an average of 4.2% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Highest.

OUR RECOMMENDATION: Procter & Gamble remains a buy.

SNC-LAVALIN GROUP INC., $54.27, Toronto symbol SNC, is a leading Canadian engineering and construction company that specializes in large-scale infrastructure projects such as roads, bridges, transit systems and water-treatment plants.

Starting with its March 30, 2017, payment, investors now receive $0.273 a share, up 5.0% from $0.26. The new annual rate of $1.09 yields 2.0%.

SNC announced several new contracts recently. Those include a deal from Colombia’s main pipeline operator to design and build two compression facilities that will speed up the transmission of gas between cities. The company will receive $35 million U.S. under that deal; that’s less than 1% of its 2016 revenue of $8.5 billion.

The operators of the Hibernia offshore oil platform near Newfoundland have also extended SNC’s existing contract to inspect the facility. This deal includes the new Hebron offshore platform, which should begin operating later this year. SNC has yet to reveal how much the contract extension is worth.

SNC’s dividend has grown an average of 4.4% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Above Average.

OUR RECOMMENDATION: SNC-Lavalin is a hold.

Our next Hotline will go out on Friday, April 28, 2017.

The post Dividend Advisor Hotline – Friday, April 21, 2017 appeared first on TSI Wealth Network.

SYMANTEC CORP. $27 (Nasdaq symbol SYMC; High Growth Dividend Payer Portfolio, Manufacturing sector; Shares outstanding: 623.4 million; Market cap: $16.8 billion; Dividend yield: 1.1%; www.symantec.com; Dividend Sustainability Rating: Average) sells computer-security technology, including antivirus and email-filtering software, to both businesses and consumers.

The company paid a $4.00-a-share special dividend in March 2016. Shareholders currently receive a regular quarterly dividend of $0.075 a share. The annual rate is $0.30 and yields 1.1%.

In 2016, Symantec made a few notable acquisitions. It paid $2.3 billion for LifeLock Inc. (New York symbol LOCK) and it also completed the purchase of privately held Blue Coat for $4.65 billion.

LifeLock Inc. sells identity-theft protection services to 4.4 million subscribers. Symantec sees LifeLock as a way to boost its lagging consumer security business.

Blue Coat 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. Moreover, Blue Coat’s chief executive officer Greg Clark has taken over at Symantec.

Symantec is a buy.

MICROSOFT CORP. $64 (Nasdaq symbol MSFT; HighGrowth Dividend Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 7.8 billion; Market cap: $499.2 billion; Dividend yield: 2.4%; www.microsoft.com; Dividend Sustainability Rating: Highest) continues to gain from the shift to selling its software as a cloud-based subscription service.

Microsoft increased its quarterly dividend by 8.3% with the December 2016 payment, to $0.39 a share from $0.36. The new annual rate is $1.56 and yields 2.4%. That dividend has grown an average of 14.3% annually over the last 5 years.

The company also announced a new share-repurchase program of up to $40 billion in share buybacks. That’s equal to 8% of its market cap (the total value of all outstanding shares). There is no time limit.

In its fiscal 2017 first quarter, ended September 30, 2016, the company’s revenue rose 3.1%, to $22.3 billion from $21.7 billion a year earlier. Earnings gained 5.8%, to $6.0 billion from $5.7 billion. Due to fewer shares outstanding, earning per share rose 8.6%, to $0.76 from $0.70.

Microsoft’s cloud-based services let users store programs and files on remote servers using the Internet. Those services now contribute $13 billion to the company’s yearly revenue. That should expand to $20 billion by fiscal 2019.

Microsoft is a buy.

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SYMANTEC CORP. $28.52 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 623.4 million; Market cap: $17.8 billion; Dividend yield: 1.1%) sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

In August 2016, the company acquired privately held Blue Coat for $4.65 billion. That business makes products to protect clients from cyberattacks through their websites and networks.

Excluding costs to integrate Blue Coat, along with other unusual items, Symantec earned $209 million, or $0.32 a share, for the quarter ended December 31, 2016. It’s a 21.5% jump from $172 million, or $0.26, a year earlier.

The company’s revenue in the quarter rose 19.7%, to $1.09 billion from $909 million.

Symantec now expects further gains—both from its current operations as well as its recent $2.3 billion purchase of LifeLock Inc. That software provider is a leader in identity-theft protection.

Symantec is a top pick for 2017.

The post SYMC buy pays off appeared first on TSI Wealth Network.

CEDAR FAIR L.P. $68 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 56.1 million; Market cap: $3.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 5.0%; TSINetwork Rating: Average; www. cedarfair.com) owns 11 amusement parks, four water parks (one indoor) and five hotels.

For 2016, Cedar Fair reported record-high revenue of $1.29 billion. That’s up 4.3% from $1.24 billion in 2015. The increase reflects better attendance (up 3%); more inpark spending per guest (up 2%); and higher out-of-park spending such as hotel rooms (up 6%). Earnings for the year jumped 57.8%, to $3.14 a unit from $1.99. That’s mainly due to unrealized foreign currency gains.

Cedar Fair is a buy.

SYMANTEC CORP. $29 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 618.8 million; Market cap: $17.9 billion; Price-to-sales

ratio: 4.7; Dividend yield: 1.0%; TSINetwork Rating: Average; www.symantec. com) sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

The company recently completed its $2.3 billion acquisition of LifeLock Inc. That business sells identity-theft protection services to 4.4 million subscribers.

Identity protection is an expanding market. Consumers are willing to pay for it even though it typically costs more than anti-virus protection. LifeLock will add roughly $600 million to Symantec’s annual revenue.

In the meantime, the company earned $209 million in its fiscal 2017 third quarter, ended December 30, 2016. That’s up 15.2% from $172 million a year earlier. Due to fewer shares outstanding, earnings per share gained 23.1%, to $0.32 from $0.26. Revenue in the quarter rose 19.7%, to $1.09 billion from $909 million.

Symantec is a buy.

BOEING CO. $175 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 743.4 million; Market cap: $130.1 billion; Price-to-sales ratio: 1.1; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.boeing.com) has signed a deal to sell Singapore Airlines 39 of its new 777-9 and 787-10 wide-body passenger jet planes.

At list prices, the contract is worth $13.8 billion. However, Boeing typically offers a discount of around 30% on large orders. The new aircraft are still in development, so the company has yet to say when it expects to deliver them.

Boeing is a hold.

The post Updating Cedar Fair L.P., Symantec Corp. and Boeing Co. appeared first on TSI Wealth Network.

SYMANTEC CORP. $30.41 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 618.8 million; Market cap: $18.8 billion; Dividend yield: 1.0%) recently formed Symantec Ventures, a cybersecurity venture-capital business to serve as an incubator for startup firms. The support could include funding as well as access to Symantec software that lets startups accelerate their development.

Symantec Ventures aims to invest in new and emerging technologies, such as analytics and artificial intelligence, to add to the company’s portfolio of products.

Utimately, the new business could also give Symantec access to possible acquisition prospects.

Symantec is a top pick for 2017.

BMTC GROUP $12.95 (Toronto symbol GBT; TSINetwork Rating: Extra Risk) (514-648-5757; No website; Shares outstanding: 36.7 million; Market cap: $477.4 million; Dividend yield: 1.9%) will continue to aggressively repurchase its shares. Stock buybacks reduce the number of shares outstanding. That, in turn, boosts earnings per share since profit is divided among fewer shares. The higher pershare earnings then helps to increase share prices.

Over the last year, the furniture retailer repurchased 1.1 million of its common shares. There are now 36.8 million outstanding. Over the next year, BMTC intends to buy back up to 5% of the current number of shares outstanding.

BMTC Group is a hold.

WYNDHAM WORLDWIDE $88.99 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973-753-6000; www.wyndhamworldwide.com; Shares outstanding: 104.7 million; Market cap: $8.3 billion; Dividend yield: 2.6%) is one the world’s largest hospitality companies, with over 8,000 franchised hotels across 77 countries and under 18 distinct brands.

The company also manages vacation resorts, rental properties, luxury clubs and timeshares. It currently has around 112,000 vacation-rental properties in 100 countries.

Wyndham re-launched its Wyndham Rewards loyalty program in 2015 to attract more customers. The program now has more than 50 million members.

Among six major hotel chains, Wyndham now has the highest average payback in rewards at just below 14%. That means for every $100 a guest spends at a Wyndham, Ramada, Days Inn, Wingate or other associated hotel, they can get back $13.60 worth of points for future stays.

In contrast, the Starwood Preferred Guest program offers its members the lowest payback of any major hotel loyalty program. Its members earn back only 5.6% of their spending when they stay at a Sheraton, Westin, Four Points or other Starwood hotel.

Wyndham Worldwide is a hold.

The post Updating Symantec Corp., BMTC Group and Wyndham Worldwide appeared first on TSI Wealth Network.

NISSAN MOTOR CO., $20.23, symbol NSANY on Nasdaq, is Japan’s second-largest automaker, after Toyota.

Nissan, along with many other vehicle makers, is dropping the prices of the cars it sells in India. Its prices in that market will fall an average of 3%.

The company sells a range of vehicles in India under the Nissan and Datsun brands, ranging from the hatchback Redi Go to the Terrano SUV.

India introduced a national goods and services tax (GST) on July 1, 2017. The GST replaces multiple state and central taxes with a single levy.

Cars fall in the “luxury bracket” and will attract a 28% flat GST. Over and above that, cars will now attract an extra 1%, 3% or 15% tax, depending on the vehicle’s classification.

Regardless, the net result is that under the new GST system, cars are now taxed at a slightly lower overall rate. For example, a mid-sized car was formerly taxed at a rate as high as 48%. The rate will now be 43% (28% + 15%).

Nissan plans to pass the tax savings on its customers. In India, the final price to buyers has always included a complex array of taxes.

OUR RECOMMENDATION: Nissan is a buy.

Nissan Motors recent coverage

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• July 2017 issue
• Hotline for June 16, 2017

SYMANTEC CORP., $28.41, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

The company will now buy an Israeli startup called Fireglass. The 40-person firm has developed technology that combats hacking by isolating web browsing and email from corporate networks. Symantec has yet to disclose the purchase price.

Fireglass offers cybersecurity technology known as “browser isolation.” This creates virtual websites where workers can look at any content without exposing their networks to computer viruses.

Symantec believes that by folding Fireglass’s technology into its existing software, it will virtually eliminate cyber threats spread by web browsing or email content. These include ransomware, malware and phishing threats.

OUR RECOMMENDATION: Symantec is a top pick for 2017.

Symantec recent coverage

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• June 2017 issue
• May 2017 issue

MITEL NETWORKS CORP., $9.18, symbol MNW on Toronto, makes technology that integrates landlines and mobile phones. It also offers call-centre and videoconferencing products.

The company has now completed the acquisition of Toshiba Corporation’s unified communications business. That operation sells into the same market as Mitel, so the purchase mostly adds new customers as well as research expertise. Toshiba has an estimated 3% market share in the U.S. and 4% in Canada. It also has a number of major customers, including Whole Foods, Firestone and Lowes.

Toshiba is in serious financial trouble as a result of its purchase of Westinghouse Electric in 2006. Westinghouse is helping to build four nuclear reactors in South Carolina and Georgia. Those projects are behind schedule and billions of dollars over budget.

As a result of a massive $9.2 billion U.S. loss for the fiscal year ended March 31, 2017, Toshiba has filed for Chapter 11 bankruptcy protection. Mitel likely picked up its unified communications business for a very good price, despite the unit’s strong reputation for good products and services.

OUR RECOMMENDATION: Mitel is still a buy

Mitel Networks recent coverage

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• July 2017 issue
• Hotline for June 2, 2017

IAMGOLD CORP., $6.36, symbol IMG on Toronto, continues to report positive results from the exploration of its 50%-owned Monster Lake gold project in Quebec.

The project comprises 114 mineral claims covering an area of 3,336 hectares. It lies 44 kilometres southwest of the town of Chibougamau in northwestern Quebec. The property is easily accessible by road, and a high-voltage transmission line crosses near to the site.

IAMGold drilled 10,657 metres in its 2017 winter drilling program. The results have revealed several high-grade mineral showings. They include a 5.0-metre drilling section that was graded at a very high 80.26 grams per tonne of gold.

The company plans to drill another 1,600 metres in the coming weeks. IAMGold holds an option to increase its interest in Monster Lake to 75% by spending a further $10 million on the project.

The company already holds interests in four operating mines. But it’s important for miners to keep exploring and developing new projects—especially in politically stable countries like Canada.

OUR RECOMMENDATION: IAMGold is still a buy.

IAMGold recent coverage

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• July 2017 issue
• Hotline for June 9, 2017

WYNDHAM WORLDWIDE CORP., $100.83, symbol WYN on New York, is one of the world’s largest hospitality companies, with over 8,100 franchised hotels under 18 different brands and across 77 countries.

The company also manages vacation resorts, rental properties, luxury clubs and timeshares. It currently has around 112,000 vacation-rental properties in 100 countries.

Wyndham has now added a 19^th hotel brand— The Trademark Hotel Collection.

Trademark is designed for independent entrepreneurs who have built an “iconic” hotel and are looking to boost their businesses with Wyndham’s support and loyalty program. The brand is aimed at hoteliers who operate 3- to 4-star hotels and want to maintain their individuality.

Trademark should be a direct competitor to Choice Hotels’s Ascend Collection and Hilton’s Tapestry Collection.

There are currently 13 Trademark Hotel Collection properties in Germany and one hotel in Switzerland. Wyndham expects the Trademark brand to jump to a total of 50 hotels in the near term, including both existing and new-build properties.

Unlike Wyndham’s “hard” hotel brands, such as Grand and Travelodge, Trademark is a “soft” brand. That means it’s more loosely defined and allows independent hoteliers to maintain their own unique branding. They will, however, gain access to the more than 50 million Wyndham Rewards members and the company’s global distribution network of more than 8,000 hotels.

OUR RECOMMENDATION: Wyndham Worldwide is a hold.

Wyndham Worldwide recent coverage

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• June 2017 issue
• Hotline for May 5, 2017

Our next Hotline will go out on Friday, July 14, 2017.

The post Stock Pickers Digest Hotline – Friday, July 7, 2017 appeared first on TSI Wealth Network.

A: Check Point Software, $113.64, symbol CHKP on Nasdaq (Shares outstanding: 163.4 million; Market cap: $18.7 billion, www.checkpoint.com), designs and makes firewall security systems to protect computers and mobile devices from online attacks.

The company generates 45.3% of its revenue from software updates and maintenance; 29.0% of its revenue from products and licenses; and 25.7% from software-as-a-service subscriptions.

Check Point first sold shares to the public at $14.00 a share and began trading on Nasdaq on June 29, 1996.

The company’s revenues have risen steadily over the last five years, despite a rising U.S. dollar, which has hurt the contribution of its overseas sales. Overall sales have increased from $1.3 billion in 2012 to $1.7 billion in 2016. Per-share earnings have moved up steadily as well, from $2.96 in 2012 to $4.22 in 2016.

The company’s revenue for the three months ended March 31, 2017, rose 7.7%, to $435.5 million from $404.3 million a year earlier. That’s mostly thanks to growing demand for its subscription-based firewall services.

Earnings, excluding one-time items, increased by 7.7% in the latest quarter, to $201.5 million from $187.1 million. Per-share earnings rose 13.2%, to $1.20 from $1.06 a share, on fewer shares outstanding.

Check Point’s strong balance sheet gives it plenty of room to keep developing new products. As of March 31, 2017, it held cash and investments of $1.5 billion, or $9.18 a share. It had no debt.

The company uses some of its cash to buy back shares. In the first quarter, it repurchased 2.6 million shares for $248 million.

Check Point is in a fast-growing, but highly competitive market. However, the company continues to improve its existing products and develop new ones. In the latest quarter, it spent $46.1 million (or a high 11% of its revenue) on research.

Check Point has also added more customers worldwide. It now sells 47% of its products and services in the Americas. Sales to Europe (38%) and the rest of the world (15%) are growing the fastest.

The stock trades at 23.0 times the $4.95 a share that the company will likely earn in fiscal 2017.

Check Point Software is okay to hold for aggressive investors.

Note that our favourite stock in the computer security area is still Symantec $30.53, symbol SYMC on Nasdaq (Shares outstanding: 608.2 million; Market cap: $18.6 billion, www.symantec.com). Symantec is a buy.

The post Q: Pat, I’m looking to invest in cybersecurity: What is your opinion on Check Point Software? Any better ideas? Thank you! appeared first on TSI Wealth Network.

AMAZON.COM INC., $1,025.67, symbol AMZN on Nasdaq, continues to disrupt the retail industry—and push down shares of retail stocks.

Most recently, its purchase of Whole Foods knocked down the share prices of many grocery-related retailers, including Wal-Mart and Costco.

This week, firms with significant appliance sales, such as Home Depot (symbol HD on New York) and Lowe’s (symbol LOW on New York), took a big dip.

That’s because Amazon reached a deal with the troubled Sears Holdings Corp. (symbol SHLD on Nasdaq) to allow the department store chain to sell its Kenmore-branded appliances on Amazon’s websites. At the same time, the partners will integrate some Kenmore appliances with Amazon’s digital assistant Alexa. That lets users control those “smart appliances” over the Internet.

Sears warehouses will continue to house the appliances, with Innovel Solutions, a unit of Sears, continuing to ship and install the goods.

Earlier this year Sear sold its Craftsman tool brand to Stanley Black & Decker (symbol SWK on New York, and a recommendation of Wall Street Stock Forecaster) for $900 million. That deal suggests Amazon could eventually buy the Kenmore brand outright.

OUR RECOMMENDATION: Amazon.com is a hold.

Amazon.com recent coverage

• Hotline for June 16, 2017
• May 2017 issue

SYMANTEC CORP., $31.18, symbol SYMC on Nasdaq, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

Symantec continues to spend a high 20% of its sales on research to stay ahead of the competition. But it’s also buying smaller startup companies to accelerate the addition of new technology to its products.

Most recently, Symantec bought an Israeli startup called Fireglass. That firm has developed technology that combats hacking by isolating web browsing and email from corporate networks.

The company will now buy U.S. and Israel-based Skycure, a leader in mobile threat defence. Symantec has yet to reveal the purchase price.

Devices such as tablets and smartphones are increasingly common in the workplace, and that introduces new risks as workers connect those devices to company networks in order to access outside websites. Symantec reports that over the last year alone such detections have doubled to a total of 18.4 million globally.

To help combat this, Skycure uses artificial intelligence and machine-learning techniques that monitor network traffic and block suspicious activity. Symantec sees this as a huge market and expects to partner with telecommunications companies to offer the protection to device users and corporations.

OUR RECOMMENDATION: Symantec is a top pick for 2017.

Symantec recent coverage

• Hotline for July 7, 2017
• June 2017 issue

ACI WORLDWIDE INC., $24.16, symbol ACIW on Nasdaq, makes software for processing transactions by credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank systems. Its products also work to cut fraud.

The company’s more than 5,100 customers include 1,000 of the world’s largest financial institutions and thousands of global retailers. Altogether, they process payments of over $14 trillion a day.

ACI continues to open offices worldwide. Its latest is in Timisoara, Romania. The move follows the recent expansion of ACI’s global headquarters in Naples, Florida, and its state-of-the-art data centre in Limerick, Ireland. The company hired new staff for both of those facilities.

ACI has had a presence in Timisoara for more than ten years, mostly to recruit talent for internships and to collaborate with the region’s technical universities. In fact, more than 100 employees in the new Romanian office began their careers with ACI through university internship programs. The expansion will add 50 new employees to the company’s existing team of 200 workers in the Eastern European nation.

OUR RECOMMENDATION: ACI Worldwide is a hold.

ACI Worldwide recent coverage

• July 2017 issue
• Hotline for May 26, 2017

CAMECO CORP., $12.46, symbol CCO on Toronto, has a joint venture with CanAlaska Uranium (symbol CVV on Toronto) to explore the West McArthur uranium project in Saskatchewan.

Until January 2016, CanAlaska had another joint venture agreement in place for its West McArthur project in the Athabasca basin. Under the terms of that deal with giant Mitsubishi Corp., the Japanese company was to receive 50% interest in the property for its investment of $14.4 million in exploration spending. However, Mitsubishi pulled out by selling its interest to CanAlaska in exchange for $600,000 and a 1% royalty arrangement.

In February 2016, Cameco jumped in to option the property, which sits 15 kilometres west of its 70% owned McArthur River uranium mine.

Cameco has now begun a summer drilling program on the West McArthur project. The company is carrying out that work as part of its option to earn a 60% stake in the project. Cameco has already paid CanAlaska $725,000 for the option to take a 30% stake in the first stage of a $5 million exploration program. That phase would start within the next three years and focus on two separate target areas. After another $500,000 payment, Cameco will then have the right to carry out a further $6.3 million of work on the project over the next three years to earn a further 30% stake.

Cameco already holds interests in several operating mines. However, it’s important for miners to keep exploring and developing new projects.

Uranium’s long-term outlook is positive, but supply remains much higher than demand. Low oil prices should also keep prices down in the near term and could slow the construction of new reactors.

OUR RECOMMENDATION: Cameco is still a hold.

Cameco recent coverage

• February 2017 issue
• Hotline for January 13, 2017

WYNDHAM WORLDWIDE CORP., $103.06, symbol WYN on New York, is one of the world’s largest hospitality companies, with over 8,100 franchised hotels under 19 different brands and across 77 countries.

The company also manages vacation resorts, rental properties, luxury clubs and timeshares. It currently has around 112,000 vacation-rental properties in 100 countries.

Wyndham has just acquired the Minnesota-based AmericInn hotel brand and its management company, Three Rivers Hospitality. It will pay the current owner, Northcott Hospitality, $170 million.

The acquisition of AmericInn will add 200 hotels spread across 21 states. Most of the properties are in the Midwestern U.S., Ohio Valley, and Mountain states. An additional 23 hotels are in development.

The deal lets Wyndham increase its exposure in the Midwest and bolster its portfolio of more than 1,500 midscale hotels. The company believes that segment of the hotel industry is poised for strong growth.

OUR RECOMMENDATION: Wyndham Worldwide is a hold.

Wyndham recent coverage

• Hotline for July 7, 2017
• June 2017 issue

Our next Hotline will go out on Friday, July 28, 2017.

The post Stock Pickers Digest Hotline – Friday, July 21, 2017 appeared first on TSI Wealth Network.

GENUINE PARTS CO., $83.93, New York symbol GPC, sells replacement auto parts through 1,100 outlets under the NAPA banner; its distribution business serves 4,900 independent stores in North America, Australia and New Zealand. Genuine also distributes industrial parts, office products and electrical equipment.

The company increased its quarterly dividend by 2.7% starting with the April 2017 payment. Shareholders now receive $0.675 a share, up from $0.6575. The new annual rate of $2.70 yields 3.2%. Genuine has now increased that rate annually for the past 61 years.

The company has a long history of fuelling its growth with acquisitions, usually smaller firms that enhance its current operations. In the first six months of 2017, it spent $240.2 million to buy other companies.

As a result, Genuine’s overall sales in the second quarter of 2017 rose 5.1%, to $4.10 billion from $3.90 billion a year earlier. That beat the consensus forecast of $4.04 billion.

Due to the extra costs to absorb these new operations, the company’s earnings fell 0.7% in the quarter, to $190.0 million from $191.4 million. However, due to fewer shares outstanding, earnings per share rose 0.8%, to $1.29 from $1.28. Even so, that missed the consensus estimate of $1.31.

For all of 2017, Genuine expects its sales will improve by 3% to 4%. It also expects to earn between $4.70 and $4.75 a share. The stock trades at a reasonable 17.8 times the midpoint of that range.

Genuine’s dividend has grown an average of 6.4% annually in the past 5 years. Its TSI Dividend Sustainability Rating is Above Average. 

OUR RECOMMENDATION: Genuine Parts is a buy.

Genuine Parts recent coverage

• April 2017 issue
• Hotline for March 3, 2017

TORONTO-DOMINION BANK, $64.07, Toronto symbol TD, is Canada’s second-largest bank with assets of $1.2 trillion.

TD raised its quarterly dividend with the May 2017 payment. Investors now receive $0.60 a share, up 9.1% from $0.55. The new annual rate of $2.40 yields 3.7%.

The bank owns 42.21% of TD Ameritrade Holding Corp. (Nasdaq symbol AMTD), one of the largest online brokerage firms in the U.S.

TD Bank and Ameritrade expect to complete their acquisition of Scottrade Bank in the third quarter of 2017. That privately held firm offers retail banking and discount brokerage services.

Under the terms of the deal, TD Bank will acquire Scottrade’s banking operations for $1.3 billion U.S. Ameritrade will pay $2.7 billion U.S. in cash and shares for Scottrade’s brokerage operations. To help fund Ameritrade’s portion of the purchase, TD Bank will buy $400 million U.S. of new Ameritrade shares. That will also let TD maintain its stake in Ameritrade at about 41.4%—just below the current 42.2%.

The new operations should add to the earnings of TD Bank in the first year. Cost savings from the elimination of overlapping operations will also spur Ameritrade’s profits.

TD’s dividend has grown an average of 10.8% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Highest.

OUR RECOMMENDATION: TD Bank is a buy.

TD Bank recent coverage

• Hotline for June 2, 2017
• Hotline for March 24, 2017

CAE INC., $20.98, Toronto symbol CAE, is a leading maker of flight simulators for commercial and military aircraft. It also operates pilot-training schools in over 30 countries and makes mannequins and other medical-simulators for training health professionals.

The company last raised its quarterly dividend by 14.3%, with the December 2016 payment. Investors now receive $0.08 a share for an annual rate of $0.32; the stock yields 1.5%.

CAE recently announced it has won new contracts from the Royal Canadian Air Force and the U.S. Air Force. The deals will see CAE provide new training simulators and long-term maintenance services.

In all, these contracts are worth $175 million. That’s equal to 6% of the company’s annual revenue of $2.7 billion. 

CAE’s dividend has grown an average of 14.9% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Above Average.

OUR RECOMMENDATION: CAE is a buy.

CAE recent coverage

• Hotline for June 9, 2017
• November 2016 issue

LOBLAW COMPANIES LTD., $68.06, Toronto symbol L, operates 1,095 supermarkets across Canada. It also owns the Shoppers Drug Mart chain of 1,330 drugstores.

The company last raised its dividend by 3.8% with the July 2017 payment, to $0.27 a share from $0.26. The current annual rate of $1.08 yields 1.6%.

Loblaw has now completed the sale of its 213 gas stations to Brookfield Business Partners LP (Toronto symbol BBU.UN). The sale included convenience stores adjacent to those stations. Under the terms of the deal, the company’s customers will continue to collect loyalty points on their purchases at those locations.

Loblaw received $540 million. To put that amount in context, it earned $445 million, or $1.11 a share, in the second quarter of 2017.

The cash will help the company with its plan to open 30 new stores and renovate 500 existing locations in 2017. It expects to spend $1.3 billion on that plan. Loblaw also continues to expand its online shopping operations. Those include the company’s click-and-collect program, where customers can buy groceries and other items online and pick them up at a nearby store when it’s convenient.

Loblaw’s dividend has grown an average of 5.2% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Highest.

OUR RECOMMENDATION: Loblaw is a buy.

Loblaw recent coverage

• June 2017 issue
• Hotline for April 28, 2017

SYMANTEC CORP., $31.03, Nasdaq symbol SYMC, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.

The company pays a quarterly dividend of $0.075 a share for an annual rate of $0.30; the stock yields 1.0%.

Symantec continues to spend a high 20% of its sales on research to stay ahead of the competition. But it’s also buys smaller startup companies to accelerate the addition of new technology to its products.

Most recently, Symantec bought an Israeli startup called Fireglass. The firm has developed technology that combats hacking by isolating web browsing and email from corporate networks.

Symantec will now buy U.S. and Israel-based Skycure, a leader in mobile threat defence. The company has yet to reveal the purchase price.

Devices such as tablets and smartphones are increasingly common in the workplace, and that introduces new risks as workers connect those devices to company networks in order to access outside websites. Symantec reports that over the last year alone, such detections have doubled to a total of 18.4 million globally.

To help combat this, Skycure uses artificial intelligence and machine-learning techniques that monitor network traffic and block suspicious activity. Symantec sees this as a huge market and expects to partner with telecommunications companies to offer this protection to device users and corporations

The stock’s TSI Dividend Sustainability Rating is Average.

OUR RECOMMENDATION: Symantec is a buy.

Symantec recent coverage

• July 2017 issue
• Hotline for April 21, 2017

Our next Hotline will go out on Friday, August 4, 2017.

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