Teachers Pension Plan Cancels Sale of Maple Leaf Sports and Entertainment. Bell and Rogers Dispute Over Media Rights. Leafs, Raptors, Marlies, and the FC are Cash Cows for Fund.

The Ontario Teachers Pension Plan has called off its sale of Maple Leaf Sports and Entertainment (MLSE). The asset has been a cash cow for the Teachers and after elongated talks with Bell and Rogers broke down, the Pension Plan has decided it is in its best interests to maintain its majority stake.

MLSE currently owns the Toronto Maple Leafs, the Toronto Raptors, the Toronto Marlies, the Toronto FC, and the Air Canada Centre. With the Leafs alone valued at over $500 million, the Teachers were hoping to fetch somewhere between $1.4 and $1.8 billion for their 80% stake in the regional sports powerhouse.

Why the talks to sell the company broke down is uncertain. Some say that Bell and Rogers could not agree on the media rights for the company, but others say that the price the Teachers wanted was simply too high. MLSE, however, it reported to generate approximately $650 million in revenue annually, making it a substantial enterprise for the pension fund, which will need more and more cash as aging teachers start collecting their benefits.

Potentially, the Teachers will probably keep their search for a buyer below the radar for awhile, until the plan needs to liquidate some holdings in the future to pay more retirees. So MLSE is off the block for now, but undoubtedly its sale will resurface as a news item again soon.

Tim Hortons Profits Soar to $103.6 Million in Quarter. McDonald's Pressure not Hurting Bottom Line. New Tim Hortons Lattes Will Ensure Margin Improvement.

This month, Canada's Tim Hortons reported that profits for the third quarter soared over 40% compared to last year. For the three month period Tim Hortons earned $103.6 million, well ahead of the $73 million earned last year. This was much better than many analysts had expected, and a clear sign that Tims is on the right track when it comes to new menu introductions and store expansions.

Also this year Tim Hortons announced that it is set to open 120 restaurants in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman over the next five years. A clear indication that the company is primed for international expansion beyond the United States of America.

Much of the growth over the last quarter was from the sale of its bakery unit, which sold for a whopping $475 million. But other positive signs were its same store sales growth, and the increased prospect of a substantial share buyback with the new cash infusion into the company.

Though there is increased competitive pressure from McDonald's and its aggressive expansion into the coffee business in Canada, Tim Hortons is weathering the battle very well, and even perhaps benefiting from an increased overall market for higher priced lattes now in the lineup.

Shoppers Drug Mart Earnings Keep Investors Happy. New Opportunity With Zellers Closing.

Canada's Shoppers Drug Mart (TSE: SC) could be primed for a nice growth opportunity following the closure of Zellers' pharmacies in 2012. Though Target has announced plans to open its own pharmacies in 2013 once it begins expanding into Zellers' locations, the hiatus will give Shoppers and other pharmacies, including Rexall, some time to either poach or purchase the current client files.

Shoppers also recently announced an increase in overall sales of 2.1% over the third quarter of last year, and a rise in net earnings of 5%. Good news for investors who have been worried about earnings deflation in the prescription drug category due to new legislation in Ontario, Quebec, and British Columbia that have limited generic drug prices to 25% of the patented version.

Shoppers shares are up almost 12% in the last year and well ahead of an overall market, which is down 12%.

Full Disclosure: (Matthew Clarke currently owns or indirectly control shares in Shoppers Drug Mart).

Consumers’ financial literacy a key focus for Ottawa: Flaherty - The Globe and Mail

Consumers’ financial literacy a key focus for Ottawa: Flaherty - The Globe and Mail:

"The $5-million task force, headed by Sun Life Financial chief executive officer Donald Stewart, is charged with developing Canada's first national strategy to improve financial awareness.

After embarking on a cross-country tour, the task force released a report earlier this year that contained 30 recommendations on how to improve financial literacy. It said education, starting as early as elementary school, is the best way to sow the seeds of knowledge and skills Canadians need to save, invest, buy homes and plan for retirement later in life.

Other initiatives it recommended include the establishment of dedicated national leader on literacy, and that Ottawa create a one-stop website where Canadians can obtain information on everything from mortgages to retirement planning.

Financial literacy is usually defined as a combination of knowledge of financial matters and numerical skills, such as an understanding compound interest, as well as having the ability to put those skills into practice in making financial decisions."

Hopefully the federal and provincial governments follow-up on this idea with a concerted effort to actually make financial literacy courses mandatory in high-schools. The fact that Shakespeare, the Boer War, and an understanding of quadratic equations is mandatory, but consumer lending and banking is not is a key reason why our population is steering itself toward the financial abyss. Lobby your MPP's, MP's, and School Boards, and the Minister of Education to help this country get its act together. An uneducated populace is easily duped by middlemen and financiers.

Apple, IBM, Intel, and Microsoft to Report Profits. Pay Close Attention if Looking to Make Money in Technology Stocks.

The coming week is going to be very interesting for anyone interested in the stock markets tech. heavyweights. IBM, Intel, Microsoft, and Apple will be posting their results, which is sure to move markets and force investors to take another look at fundamentals like earnings, sales, and profit margins... at least for awhile, until we revert back to panic trading on the least bit of financial news coming out of Europe.
IBM is releasing its numbers first. On Monday, it will probably report expectantly dull, but healthy and sustainable revenue and earnings growth. This company has been doing everything right recently and analysts and investors alike will generally sing its praises. Investors like dependability and predictability, it helps them to sleep at night. IBM has achieved well on both counts. In the past eight quarters it has exceeded per share profit expectations by about 2.4%, nothing spectacular, but helps an investor know what he is buying. If IBM says it will make a certain amount of money, they can generally deliver.

Intel has been a little more difficult for investors. Performance wise, it has not been all bad. It has a steady and attractive dividend above 4%, almost unheard of in the tech arena, and it has largely avoided the collapse taking place in financials and many other areas of the market. The difficulty for Intel and its investors is the lackluster performance of PC sales, which are the bread and butter of Intel's chip business. This company needs more avenues of distribution, as PC's are being left in the dust by mobile and tablet sales as of late. Is this transition impossible for Intel, no! But they need to speed up the process.

According to Barron's Online, "consumer PCs have been steadily under-performing this year... tablet computers might be eating away at new purchases." And this is where our discussion of Microsoft kicks in. Microsoft has been increasing revenues at double digit paces, and profits are very healthy. Windows 7 was an effective operating system and sales were brisk. Coming online for Microsoft is Windows 7.5 for mobile devices and tablet computers, which should help give sales a kick as well.

Apple news, however, is most likely to be what excites investors when they report on Tuesday. Sales of the IPhone 4S are extraordinary, and the halo effect that their phones will continue to have on their computer business will be very positive. The more people that buy Apple phones and other gadgets, the more computers and media they continue to sell. This snowball effect for Apple has been going on for some time, and with the release of the IPhone 4S, and then the IPhone 5, it does not seem to be stopping.

Full Disclosure: My company or I own shares in Intel. (INTC).

Happy Investing : ) Comment or E-Mail with any Questions.

Microsoft Windows 7.5 Smartphones Could Sieze 20 Percent of Market by 2015. Microsoft to Provide Big Incentives to Retailers and Sales Staff in Coming Year.

Microsoft could control over 11 percent of the smartphone market by next year, according to some analysts, and 20 percent by 2015. In an attempt to reverse disappointing sales for its Windows 7.5 Phones, Microsoft is heavily targeting retailers, manufacturers, and mobile operators to increase interest in its models. Samsung, HTC Corp., and Nokia are expected to shift sales towards Microsoft Windows 7.5 in the near future.

With lots of cash on the balance sheet, and substantial amounts of free cash flow being generated on a monthly basis, Microsoft can afford to provide incentives and increase marketing efforts to boost sales. Much of the extra money being spent will probably go towards encouraging retail staff to push the phones on new and existing customers. Margins and profits on Apple phones are simply too high for Apple, and manufacturers and mobile operators are eagerly hoping to unlock their stranglehold on the market. Microsoft is providing an excellent opportunity for them to do so.

Nokia alone has more than 6,000 outlets, and it has already announced an exclusive deal with Microsoft for its smartphones after shelving plans for its own operating system. In the United States, many models are expected to cost less than $100, significantly less than phones provided by market leader Apple.

With the recent success of Windows 7, and an increased focus on tablets and smartphones at the company in the coming years, Microsoft shares are going to start looking very cheap. Currently selling from $25-$27, the stock is at similar levels to a decade ago. Investors who buy Microsoft are paid to wait by collecting a dividend of about 2.4%, and the downside risk at this point is very minimal.

Happy Investing : ) Post or E-Mail your Questions and Comments.

Maple seeks regulator OK for TSX bid - Business - CBC News

Maple seeks regulator OK for TSX bid - Business - CBC News:

The Canadian consortium of banks and insurance companies knows as "Maple Group" has finally submitted its proposal to acquire TMX Group (Canada's largest stock and options exchange owner) to four provincial regulators. Regulators will now begin seeking public comment on the $3.8 billion deal.

Provincial and federal competition bureaus are going to have to approve the deal because if it goes through there would be a virtual monopoly on stock and options trading in Canada. And though this deal is great for shareholders, it will be much more difficult to ascertain whether or not it is in the public's best interest. There is, however, a good chance of it getting the green light under Harper's conservatives.

The conservative government under Stephen Harper, though known to have blocked some deals, especially Potash, will look more favourably upon this deal as it is not a foreign takeover, which can often be a political fire-storm.

Maple's $50 per share offer for TMX is superior to the previous offer they received from the London Exchange, and a breath of fresh air for many shareholders during the current economic and financial turbulence. With current shares of TMX trading well below $50, there is still a lot of upside potential for this deal should it go through.

Happy Investing : )

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Lowe's Losing Market Share to Home Depot. Intituting New Everyday Low Prices. Lowe's Dividends and Profits Should Increase.

Home renovation superstore Lowe's is hoping to revive its fledgling operations with a new everyday low price strategy. Second to Home-Depot, North Carolina based Lowe's has been struggling to compete with Home Depot in recent years as declining same store sales and promotions have trimmed profits. The stock is down 40% from its 2007 high, and is trading for the same prices you could buy it for 10 years ago.

Lowe's has 1,753 stores throughout North America, and hopes to keep adding more as it spreads in Canada and elsewhere.

According to Barron's:

Lowe's "bought back $2.4 billion of stock in the first six months of the fiscal year that ends in January 2012, an amount equal to about 8% of shares outstanding. Last year management set ambitious multi year financial targets, including $3.40 a share in earnings by 2015, sharply higher dividends and $3.6 billion of average annual share buybacks. The company could repurchase half its shares outstanding if buybacks run at the current annual rate, let alone the higher target."

By returning cash to shareholders in the form of dividends and share buybacks, Lowe's management is showing that it has its owners interests in mind. Far too often companies utilize precious shareholder cash to embark on costly acquisition sprees that yield little to no value for owners. When a company returns free cash flow to investors instead of squandering it, the Intelligent Investor should be pleased. To be sure, Lowe's could increase its dividend to 4% and still retain 50% of earnings in the company.

Lowe's is also closing under-performing stores and reducing the ranks of costly middle managers. Currently, Lowe's and Home Depot have a very nice duopoly in the United States, with Rona in Canada providing additional competition north of the border. As the housing market improves in the United States, margins and profits at Lowe's should improve and investors will be rewarded. As a relatively conservative and healthy investment in the American retail and home improvement sector, Lowe's is a solid fundamental choice for the Intelligent Investor.

Cheers and Happy Investing : )

Ireland Escaping the Recession. GDP, GNP, and Consumption are up, but Irish Wages are Down.

This week's Economist notes that the Irish economy expanded at a faster rate then expected in the second quarter. GDP, GNP, and domestic demand and consumption all increased during the same period. Though GDP and GNP increased by only 1.6 percent and 1.1 percent respectively, two quarters of successive growth is a bright spot amidst the doom and gloom of contemporary Europe.

Ireland's economy features a number of characteristics that give it a benefit compared to other nations as they pull out of the recession. It has a highly educated labour force, it is open to free-trade, and the populace speaks English, always a plus in a globalized environment. In addition, the national economy is structured around exports, as they make up about 70 percent of Irish GDP.

Also, corporate taxes in Ireland are very low, and do not seem to be rising like in other nations. Wages too are very low, great news for European employers looking for a hub in Western Europe. But as other countries race to the bottom with regards to corporate tax rates and wages, the entire Euro-Zone may suffer. If consumers in other countries are not making enough money to buy your goods and services, exports and production will plummet.

Stocks Rally on Greek Debt Default Relief. France and Germany Agree to Continue Bailouts.

Stocks Rally on Greek Debt Default Relief. France and Germany Agree to Continue Bailouts.

French and German taxpayers are again backstopping years of Greek excess. In return, Greek's prime minister was forced to once again pledge support for reforms that will hopefully ensure deep cutbacks in government spending.

Investors have been pleased with the news as it prevents, for the time being, a Greek default or expulsion from the Eurozone. The International Monetary Fund and the World Bank will review Greek finances again in the coming days to ensure that reforms are being implemented.

In Europe, all stock markets headed higher on the news, with Germany up over 2 percent. However, Greek debt still stands at 150% of GDP and citizens across Europe's capitals are largely going to reject more efforts to bailout foreign governments.