Good News for Investors - Thomson Corp

After a brutal sell-off last week, Toronto’s main stock market jumped while US stocks fell this morning. Sadly, today's gain on the TSX (Toronto Stock Exchange) was less than last week's loss and the mood is sobering. With this backdrop of brooding doom and gloom, my conservative approach to investing is all the more relevant. The Thomson Corporation is an information content provider that does well in our wired world. Thomson trades on the TSX (Toronto Stock Exchange) and NYSE (New York Stock Exchange) with symbol TOC.

Thomson Corp is an information service provider that has successfully transitioned from a print media-centric company into an electronic media force that is gaining more and more momentum, recently agreeing to buy Reuters, the 156-year-old news service, for about 8.7 billion pounds ($17.9 billion) - talks are still underway.

Check-out Thomson on Google Finance

In addition to a massive newspaper business (EDIT: okay, TOC does not own any newspapers - anymore, even though the Thomson familly does - sorry for the confusion and any mental disturbances caused- I always associate the Thomsons with the globe - my favourite newspaper). Thomson has several divisions. One of the best is Thomson Legal & Regulatory, which provides information and software-based solutions for legal, tax, accounting, intellectual property, compliance and other business professionals, and government agencies. Another division is Thomson Financial which provides products and integration services to financial and technology professionals in the corporate, investment banking, institutional, retail wealth management and fixed income sectors of the global financial community. Lastly, Thomson Scientific & Healthcare provides information and services to researchers, physicians and other professionals in the healthcare, academic, scientific, corporate and government marketplaces.

Just this month, Thomson completed the sale of the higher education, careers and library reference assets of Thomson Learning as well as the sale of Nelson Canada to a consortium of funds. In March 2007, Thomson sold NETg, an electronic education software and delivery platform.

Thomson reported earnings July 26, 2007 that were ahead of expectations, with EBITDA of US$534 million vs. consensus of US$511 million:

"Revenues increase 11%; organic revenue up 6%; Operating profit grows 15%; operating profit margin increases in all segments; Diluted EPS increases to $0.58, from $0.26 a year ago"

The upside came from stronger than expected revenue growth, high margins in the Legal division and lower corporate costs.

Good management, solid economic performance and a strong future for electronic information are all reasons to buy Thomson. There is a strong buy rating consensus among analysts; RBC gives TOC a price target of $51 with above average performance and minimal risk. I consider this a conservative investment inline with my principles of a slow but steady stock that will increase moderately over the next 12 - 18 months. If you are looking to add a safe but lucrative information-media angle to your portfolio, this might be the right stock for you.

DISCLOSURE: I do not own shares in Thomson at the time of this writing. Remember that no matter how rosy the picture, bad stuff can happen. Just ask Gary Gnu

Remember to tell your friends and the enemies of your enemies about InspectorSTOCK.com

OLE! - OIL AINT GONNA STAY DOWN - Petro Canada

OUCH - After a dog’s day on Tuesday, July 24, a “bargain-hunting” recovery on Wednesday, and a global rush to the exits today, Thursday July 26th; as stocks fall hard, and gains start to evaporate, it’s hard to be bullish. As I have preached before, its good to be prepared for days like these by keeping your portfolio diversified. Even still, its hard to be completely unaffected by this sell-off.

As recently as July 16 I wrote, "The conventional wisdom is that when the commodity boom starts to fizzle and interest rates start to shrink the financials' massive profitability, move to big-cap, high dividend paying stocks. Many are predicting just that scenario of the commodity boom's bust and lack-luster financial institution performance, and to be fair, it never hurts to be cautious." You don’t have to be Nastrudamus to predict an end to the market's five year bull run (you'll be right eventually), but I still say OIL as a commodity is a safe bet and the stock market is a good place to be - Ole! The bull rush will continue.

For now, the bears are everywhere. However, its good to keep your head straight - no need to play dead when confronting these bears. As the US housing market and mortgage situation causes a lot of jitters, one thing remains a sure thing in my mind: It may dip down, flirt with the psychedelic 60s, or the disco 70s ($60 - $70 per barrel), but as time goes on, oil, the black gold, will trend upwards and years from now it will be selling for triple digits. Welcome to the 21st century.

Since oil is going to trend higher long-term, I think it makes sense to have some oil exposure in your portfolio. Petro Canada (PCA) is a Canadian integrated that I like and own - it trades on the TSX (Toronto Stock Exchange). I would take down days like these to pick some up if I didn’t already own enough (and hadn't already bought it much lower). After posting record earnings it joined the sell-off today, and is down as of this writing about 3.25 % for the day. If you are looking for a safe oil play, Petro Canada is a solid Canadian company.

Check-out Petro-Canada on Google Finance.

Petro-Canada is an integrated oil and gas company with a portfolio of businesses spanning both "the upstream and downstream sectors of the industry." Petro-Canada explores for, develops, produces and markets crude oil, natural gas liquids (NGL) and natural gas in Canada and internationally. They also refine crude oil and other feedstock, and market and distribute petroleum products and related goods and services, primarily in Canada. Petro Canada is also an Alberta oil-sands play and this bodes well for the future of the stock.

Petro Canada is not a growth story: analysts have low growth expectations compared to its peers, however, Petro Canada does have one of the hightest return on equities compared to its peer group. I predict good things for this sector in general, and in addition to oil going higher and higher, I am cuatiously optimistic about natural gas picking up as well. As a conservative investor, I like this stock.

Lastly, one of the best things about owning an oil stock is that it is a hedge on gasoline. When oil goes down, gas prices go down, and assuming you drive a car, you win at the pump. When oil prices go up, your oil stock goes up and it makes pumping gas at a higher price a lot easier. All I can say is, get used to higher gasoline prices.

DISCLOSURE: I own shares in Petro-Canada. Always do your own research before you cough up $$$. Don't take anybody's word on anything.

Bad News for the Sheep - Cameco's Stock Price is Dropping

Here is a contrarian play for the truly brave. Right on the heels of a sell-off, RBC (Royal Bank of Canada) named Cameco a top pick on Friday July 20, before more bad news hit this morning (Monday July 23), when the company said it would halt output at an Ontario plant for at least two months following the discovery of contaminated soil. Ouch, bad timing for RBC? Maybe not.

Centerra Gold, which is 53% owned by Cameco, has lowered its 2007 gold production forecast and raised its gold cash cost forecasts at its Kumtor mine. In June of 2006 the mine had a pit wall failure. Centerra will use flatter angles on the wall of the Kumtor pit to provide greater stabilization and this will require the removal of more waste and delay access to high grade ore until Q2/08. Cameco now expects lower 2007 gold production at Kumtor of 300,000 oz versus 450,000 oz as a result. RBC CM expects significant increases in Cameco earnings and cash flow forecasts over the next five years and believes that the shares offer upside potential as the negative effects at the Cigar Lake mine should be more than offset by rising uranium prices.

Wow - that is by definition, a salmon run, swimming upstream, going against the grain, moving in the opposite direction of the mindless, charging heards of sheep - stay clear, feeble, wimpy investors, baa, baaa, BAAAAAAA. Uranium is sliding, Cameco is falling like a brick and that is exactly why RBC likes it - good value if you are willing to stick it out. Keep in mind RBC named this top pick before this morning's bad news. RBC projects a five year price target of $80. This is not a trade, but an investment, Warren Buffet style. Do you have the stomach to wait this one out?

(EDIT: RBC reported today, after the bad news of the discovery of contaminated soil at the Port Hope plant, that it has not revised its estimates citing the fact that Cameco’s total conversion business accounts for only 5.5% of forecasted operating earnings in 2007 and high-lighting the fact that the chemicals are in a contained area, so public health and worker safety are not affected.)

Check out Cameco on Google Finance

Even after this morning's news (July 23 2007), that the company will halt output at its Port Hope, Ontario, plant for at least two months following the discovery of contaminated soil, I still think Cameco represents a good, long-term opportunity, but I expect the stock chart will look like a ski hill for a little while - short sellers will be happy. I expect uranium prices to head back up, EVENTUALLY. Cameco has been a rising star for the last year, but I wonder if it will be considered a dog now that a huge string of bad luck has hit it and the mining/metals/uranium sector in general. Never mind the bullocks, stay with the facts. Cameco is the world's largest uranium producer and nuclear energy is on the rise for the long-term. Has the stock bottomed? I suspect not, but either way, if you want in, buy in phases, not all at once.

DISCLOSURE: I do not own shares in Cameco. Always do your homework when you buy a stock.

Shifting Political and Economic Winds - Canadian Hydro

Last week (July 11) I wrote about Boralex, after news it was granted rights to build wind farms in Windsor and Essex County in southwestern Ontario. Another company in the alternative energy sector from Canada, and even more established than Boralex, is Canadian Hydro. This stock has fallen over the last several months after a nice run-up, due presumably to construction delays in its second phase at Melancthon, located northwest of Toronto. This actually provides a nice buying opportunity.

I have to give credit to the Globe and Mail for this story:

"The 18-year-old company, based in Calgary, owns a portfolio of 12 hydro-electric generating stations, five wind farms, and a biomass plant, all situated in British Columbia, Alberta or Ontario.

The company also has a big pipeline of new projects set to come on stream in the coming months and years, and that has made it a growth play with a stock chart to match -- at least until a couple of months ago."

According to CEO, John Keating, the company expects to begin building two new hydro electric power projects in British Columbia, as well as resuming work in Ontario, in the next few months.

"Come this fall we fully expect to be under construction both in B.C. and Ontario, and I'd anticipate that should help the stock."

Check out Canadian Hydro on Google Finance

Alternative energy plays are all about growth, and this company has room to do just that.

Need more proof that alternative energy is a big thing for the future? Well, to quote another Globe article, "when executives from the world's largest oil companies say we need to cut back on our consumption, it should serve as the ultimate wake-up call about a looming energy crunch." These are not peak-oil evangelists sounding the alarm, but rather, a committee of the National Petroleum Council, which was chaired by former Exxon chairman Lee Raymond and included Chevron chairman and chief executive officer David O'Reilly.

And now to quote my own blog entry from July 16, "all signs point towards massive oil prices and political will to move away from fossil fuels…" Well, in that blog entry I was talking about nuclear energy, but the future bodes well for all alternative energy, and Canadian Hydro will benefit from the shifting political and economic winds in favour of wind energy, biomass and good-old hydro-electric power (thanks Mr. Nikola Tesla - true visionary).

DISCLOSURE: I do not own shares in Canadian Hydro, nor do I smoke hydro, despite apparent signs such as periodic lapses in reason and incoherent ramblings – (it just comes natural to me). Always do your homework before buying a stock.

Believe the Hype - NOVA Chemicals

Before I move on to today’s topic, allow me to high-light a recent pick I made:


Those of you who took my advice on July 8 and picked up some Rogers Communications (or already owned some), should be pretty happy with recent stock analyst upgrades and stock price jump - hitting the 52-week high Tuesday July 17th. This stock hasn't stopped climbing either. I’m glad I own some.

Moving right along to today's topic, a highly-hyped stock, Nova Chemicals (NCX).

Believe the Hype

Check them out on Google Finance

Nova Chemicals is a strong acquisition target. RBC (Royal Bank of Canada) has listed this stock as their "top pick" with a price target of $53.00 - ouch! (currently trading after the bump at $40). Read all about it here. Analysts everywhere have bumped up the price target after Basell agreed to acquire Lyondell Chemical, fueling speculation of Nova being taken over and at a premium. RBC states:

"Nova Chemicals is a strong acquisition target due to its Alberta feedstock cost advantage, proprietary Performance Products production technology and North American footprint. The fundamentals for the company also remain attractive, as strong demand for polyethylene is leading to higher polyethylene prices, and the company faces high operating rates and relatively tight producer inventories."

For all you traders out there (as opposed to timid investors like me), this one has got fast money written all over it.

As always, do your own research - make sure your risk tolerance matches the stock. This one sounds pretty good - down-side versus upside are lopsided to the up.

DISCLOSURE: I do not own Nova Chemical stock (as of right now). Do your homework before you spend $$$ on a stock, no matter who recommends it.

GE Green Energy

Looking to diversify your commodity-heavy portfolio? Need to lighten up your exposure to financial stocks as interest rates are trending higher and higher? The conventional wisdom is that when the commodity boom starts to fizzle and interest rates start to shrink the financials' massive profitability, move to big-cap, high dividend paying stocks. Many are predicting just that scenario of the commodity boom's bust and lack-luster financial institution performance, and to be fair, it never hurts to be cautious (not to be confused with being delusional and paranoid). So, with that said, where is the smart money moving to? Well, recently one of the fattest large caps reported, and their quarter was good, despite some exposure to the US sub-prime melt-down and more importantly, the future of the stock looks good.

General Electric (GE) reported Q2 EPS (Earnings per share) of $0.53, $0.01 better than consensus of $0.52. Revenue rose 12.1% year-over-year to $42.32 billion versus consensus of $42 billion. Adding to the rosy picture, GE raised its share repurchase program to $14 billion from $12 billion – always nice when company’s buy-back their own stock. And best of all in my opinion, GE’s financial group WMC sold off about $3 billion in non-prime loans, cutting its exposure to the market by about two-thirds. Nice – despite the subprime write-off, GE still posted a gain for the quarter.

Check-out GE on Google Finance

Looking forward, GE should not be affected in a major way by the continuing US sub-prime mortgage situation, which in case you haven’t noticed, is a really bad place to have money tied up in. So, GE has successfully maneuvered around a really nasty mess, albeit taking a hit. Always nice when the other divisions pick up the slack, so much so that the stock exceeds expectations.

OK, enough about Q2, it’s over, it’s done – old news does not make money. Looking to the future, what I like is the fact that lots of money should be pouring into GE for the above mentioned reasons: investors looking to move away from exposure to commodities and financials in favor of big cap, dividend paying stocks. Secondly, I like the stock repurchase program which strengthens share price. Lastly, what I like are some of the strategic moves GE is making. For example, Hitachi Ltd. and General Electric Co. have recently launched a joint nuclear business.

The following from the Japan Times

Hitachi Ltd. and General Electric Co. have launched a joint nuclear business to capitalize on rising demand for electricity and increasing concerns about carbon dioxide emissions from coal-fired plants.

John Krenicki, president and chief executive of GE Energy, said Monday at a news conference that nuclear plants produce virtually no carbon gases and reactors can take the place of aging power plants that rely on fossil fuels.

"We believe nuclear is going to step in and we're getting ready to execute that plan," he said.

Nuclear is going to make a big resurgence. Concerns for the radio-active waste storage and operational safety are going to be outdone by the cheap, clean energy that nuclear provides. This is especially true given that many alternative fuels and technologies such as ethanol depend on high energy in the first place to refine and produce. All signs point towards massive oil prices and political will to move away from fossil fuels, and, most powerful of all, it makes economic sense. GE is well poised to be part of this shift towards nuclear.

In conclusion, GE is a safe, conservative stock to add to your portfolio.

DISCLOSURE: I do not own shares of GE. Do your homework before you buy a stock.

Tom Vu, The Tragically Hip and Jim Cramer: “You a loser”, “Better for me if you don’t understand”, “Maybe you shouldn’t be in this game”

This last week on his TV show, Mad Money, Jim Cramer questioned whether his viewing audience should be investing in stocks:

from the thestreet.com:

“I really and truly believe that the sky is falling and the world is coming to an end," Cramer said. "It's time to kiss the market goodbye. It's time to sell everything!"

"Make sure you get a shot of my fingers crossed behind my back," he said. "I'm actually being sarcastic."

"Let's forget about putting the market in the sell block," he said. But Cramer cautioned that if anything he'd just said "made you scared enough to sell, I've got some real bad news for you: Maybe you're just not cut out to buy stocks. ... Maybe you shouldn't be in this game."

You don't have to have nerves of steel to play the game, he said. But investors do need to have some nerve. The issues he heard about on vacation will always be there, and the rumors won't be scared off by evidence or common sense.

"There have always been worries in the market. There have always been what I regard to be professional wet-blanket people," Cramer said. "They're very, very persuasive. You know what they're about? They're about losing money."

Seems like for the last several years people have been on the side-lines waiting for disaster. I have heard about the end of the Canadian real-estate run for the last 5 years, yet every year it continues to rise. I have heard about rising interest rates killing the stock market – yet, every time I look, the stock market is doing better. The bears are a loud bunch and their panic is contagious. Their negativity is unrelenting.

Had I been listening to these dooms-day predictions, I would not have made the 30%-plus annually over the last three years. There is a line in the Tragically Hip song, "Locked in the Trunk of a Car" that goes, "Better for me if you don't understand." Now I have no idea what that song is about, and you’d be hard-pressed to get a definitive explanation of any of Gord Downie’s lyrics, but that line pretty much sums it up for me. Other people's ignorance is an investor's bliss. The constant fear-mongering, and anti-stock market hysteria does nothing but create a lot of noise, sell papers, and more importantly, for those of us that still have some connection to economic reality, it gives us some nice buying opportunities. It allows sane investors to benefit from panic selling and other irrational market behavior. Just ask contrarian king, Warren Buffet.

There will be down-turns, corrections, bubbles will burst – but over-all, if you DIVERISFY you can weather the various storms, see through the scams and make money. The recent cowboy investment tactics by CIBC and BMO high-light the risks of overly aggressive trading/investing, not to mention the story of Brian Hunter who single-handedly brought down hedge-fund Amaranth. Yes, sometimes investing can be like a crap shoot - but it doesn't have to be, if you don't want it to be. I choose to be conservative and as such, I stay away from options trading because I really hate to lose money.

By the way, if you believe the hype, and think that the end of the world is just around the corner, then you should have some health-care sector exposure in your portfolio, which in Canada, has taken a small beating lately, so its a good time to get in. Check-out CML Healthcare for a small-cap, Canadian health-care play.

Like Tom Vu used to say to the nay-sayers in his infomercials, "You a loser! Get out of my way!!" (speaking of gambling, Tom Vu is currently a professional poker player - not sure how good his real-estate seminars were, but the guy had a way with words).

Blowing in the Wind with Boralex

Boralex is an energy company from Quebec, Canada, that generates 89 megawatts of power at six wind farms in France. Boralex is now looking to build some wind farms closer to home, in Ontario. It trades as symbol BLX on the TSX (Toronto Stock Exchange).

Check out Boralex on Google Finance

The following quote is from the Globe and Mail:

"Boralex Inc. has acquired rights to develop nine wind farms in Windsor and Essex County in southwestern Ontario. When the projects are complete by 2009, they will generate a total of 90 megawatts of power.

That is enough to power 18,000 homes and will double the company's wind-generating capacity."

The recent news caused a small spike in stock price, as you will see in their chart, if you look.

Boralex also operates six power stations in Maine and New York that run on wood residue, as well as eight small hydroelectric plants in Quebec, France and New York and a natural-gas-fired plant in France for a combined total of 333 megawatts.

Boralex also manages 10 power stations via Boralex Power Income Fund, a trust that was spun off in 2002 and which Boralex holds a 23-per-cent interest.

Unless you think alternative energy is just a fad (like the Internet and computers - no future there), then Boralex is a nice play considering their experience in the field abroad and an early entry into Ontario's green market. I like it. I will be tracking this company for sure.

DISCLOSER: I do not own shares in Boralex or units of Boralex Power Income Fund. As always, do your own research before running out and buying a stock.

Mike Sabia Selling His Ma While Teddy Kicks It Old-School

The biggest leveraged buy-out of all time in the history of the world is taking place – if the coalition of buyers led by the Ontario Teachers Pension plan goes through, there is going to be a lot of junk bonds. Good for BCE stock-holders, bad for the bond holders (and I always thought bonds were the so-called “safe” investment). At this point, unless Telus actually manages to out-do the Teachers, this story is old news: If you don’t already own BCE stock, you aren’t going to be making any cash from this story and thus, who cares?

The real telecom story in Canada is not “Ma Bell,” but rather, Rogers Cable. While Bell Canada has been losing market share in the home phone market, underperforming versus their peers (essentially Rogers and Telus) in their most lucrative market, wireless, and moving at a snail’s pace in the IP game (IP telephony, IPTV, fiber to nowhere) and generally being its big, bad, boring (and wasteful) self, Rogers has been taking care of business.

Check-out Rogers Communications Inc on Google Finance

Expect not only the share-price of Rogers to rise, but expect the dived-end pay-outs to increase as the cash piles up and this stock becomes certified blue-chip. Rogers has wisely invested in infrastructure which has been successfully returning $$$. Just goes to show you what an old-school guy like Ted Rogers can do, as opposed to the “professional” CEO types like Mike Sabia, who in five years at the helm as CEO of BCE, has really only accomplished one thing – selling his beloved company for a high price. Well, Mike, at least you’re good for something – you inherited a bad situation, did absolutely nothing to improve that situation, then finally just sold the mess as-is - enjoy the golden parachute! The story is different at Rogers – no golden parachute CEOs getting ready to jump. As long as Ted is running the show, expect to make money. Mr Rogers won’t need to sell his company to keep his stock-holders happy. Ted does it the old fashioned way – his runs his company well.

DISCLOSURE: I own shares in Rogers. Do your own investment research to see if this stock works in your portfolio. It definitely works in mine!

Crystallex is Making Investors KRY

Canadian gold miner Crystallex International Corp. recently said that it has completed "the very final step" to gain a permit allowing construction of its Las Cristinas mine in Venezuela. The environmental impact study for the project, one of the world's largest undeveloped gold deposits, has been approved by Venezuela's Ministry of the Environment and Natural Resources.

Anyone who has followed Crystallex over the last year or so can attest to the roller coster ride this stock has been on. Check-out their chart and you will see lots of peaks and valleys.

Crystallex trades on the TSX with symbol KRY

Check-out Crystallex on Google Finance

Crystallex International Corporation is engaged in the production of gold and related activities, including exploration, development, mining and processing in Venezuela. The Company's principal asset is its interest in the Las Cristinas Project located in Bolivar State, Venezuela. Recently, the gold miner received an environmental permit which is the last step before getting a permit to start construction. The fate of KRY's stock price rests with Venezuelian "socialist" president, Mr chavez.

With the recent nationaliztion of the oil industry in Venezuela, doing business there is not exactly straight-forward. However, all signs point towards Crystallex getting the green-light to start construction. And if and when it does, expect the stock to soar. Las Cristinas mine in Venezuela has massive gold reserves.

RBC (Royal Bank of Canada) rates this stock a strong buy. TheStreat.com has upgraded KRY from a sell to a hold. Make no mistake, this stock is very risky. My downside prediction of share-price if Las Cristinas mine doesn't happen is about $2. Upside though is in the $7 - $10 range. If you've got some disposable cash and are a gambling person, this might be a bet you want to make.

DISCLOSURE: I own shares in Crystallex. This is a very speculative investment, and it may cause you to KRY. Do your homework, see if this stock is good for you.

Hello TaTa

With the recent signing event in China that officially acknowledged the highly anticipated cooperative agreement between Chrysler and Chery, a new era in North American automobile history has begun. Chrysler announced plans to outsource manufacturing of a new subcompact destined for the European and North American market to Chinese automaker, Chery motors. The two companies plan to develop, manufacture and distribute Chery-made small and sub-compact cars in North America, Europe and other major automotive markets under the Chrysler Group brands.

One major statistic stands out:

from Globe and Mail:

“THE CHANGING FACE OF AUTO MANUFACTURING
$73
Average amount unionized assembly line workers make per hour in the United States, including benefits (U.S. dollars).
83¢
Amount in U.S. dollars that Chinese auto maker Chery says it pays assembly line workers per hour, a total of $132 a month.”

North American auto-workers have every reason to be worried.

The move by privately-owned Chrysler to manufacture entire cars offshore will force other auto-makers to target the under ten thousand dollar car range in North America, and will necessarily involve offshore manufacturing.

One car company to keep an eye on is TaTa Motors based out of India.

Check out TaTa Motors' ADR on Google Finance

Check out TaTa Motors' Website

TaTa motors is India’s largest auto-maker and presently has deals in place with Fiat among others. TaTa Motors is a growth story all the way. TaTa Motors is already a huge player on the international stage and is a safe bet without taking any leaps of faith. If it was to suddenly get involved in a North American play, the stock price would sky-rocket. Even without a North American play however, it has huge growth potential in the domestic Indian market alone. Say “ta ta” to the big three and “Namasthe” (hello) to TaTa motors.

DISCLOSURE: I own shares of TaTa motors. Do your own research!

Mad Monopoly Money - Teranet Income fund

TF.UN - trades on the TSX

One of the sure-fire investment strategies, according to stock guru Jim Cramer, is making money from businesses that have a monopoly. Teranet Income fund has such a monopoly – and they have that monopoly guaranteed until 2017 (at least). Of course, you will never hear Jim Cramer speak about Teranet because it is too small of a company, and his lawyers advise him from talking about small cap stocks - he only talks about mid and large cap stocks. And that’s why reading my blog can make you mad money in areas Mr Cramer is forbidden to talk about.

I love Jim Cramer’s philosophy and his creativity, not to mention his passion. Take Jim Cramer’s philosophy and point it at this Canadian small cap, and Teranet is definitely a “buy, buy, buy.”

The following is from Teranet’s website:

Teranet is a leading provider of integrated land-based information products and services. Teranet operates in Ontario and provides access to the Ontario Electronic Land Registration System (“ELRS”) through its proprietary software application, Teraview® software. This product enables customers to conduct electronic registrations as well as title and writs searches relating to real property. Teranet has the exclusive right to access the data in and operate the ELRS and the Writs of Execution database, and create and market value-added products and services in connection with the ELRS and writs until March 31, 2017. These licences extend on a non-exclusive basis in perpetuity for the ELRS and until 2047 for writs. Teranet has leveraged its core capabilities to create electronic service offerings in complementary information and e-commerce areas.

So, basically, any land registry that takes place in Ontario until March 31 2017, (and probably beyond), has to go through Teranet. Nice. Talk about a stable, profitable business with little risk. As an income trust, Teranet pays out a nice distribution, and thus, even if the share price doesn’t move, you're gaurneteed a return. You can't lose.

Add to the mix the possibily of an LBO (Leveraged Buy-out) which RBC sees as being likely, and you have even more reason to own Teranet. No downside, all upside.

Disclosure: I own shares in Teranet Income Fund. Do your own homework, see if this stock makes sense for you.