Tuesday, February 21, 2012

Rio Tinto (RIO) Production up only for Aluminum, Bauxite, Iron, Salt, Borate & Titanium; Copper Will get a boost from Ivanhoe Mines (IVN), Pilbara, Escondida

Rio Tinto's largest projects as of January 2012 (indepth look here)
Project New Annual Output Metals Year Total cost
Pilbara 283 53 Mt iron ore 2014 $9.7 bil
Oyu Tolgoi 1.2b lb 650th oz 3m oz copper gold silver mid 2013 $6.0 bil
Kitimat 400th tonnes aluminum 3Q 2014 $3.3 bil
Yurwun 2 2 Mt alumina 3Q 2012 $2.3 bil
Argyle 20 mil carats capacity diamonds 2Q 2013 $2.1 bil
Hope Downs 4 15 Mt (30 yr life) iron ore mid 2013 $2.1 bil
Kestrel 1.3 Mt coal mid 2013 $2.0 bil
AP 60 Quebec 60 kt aluminum 2Q 2013 $1.1 bil
Marandoo Aus 15 Mt iron ore early 2015 $1.1 bil
Iron Ore Company Canada 1 2 5.3 Mt (Rio owns 59%) iron ore early 2013 $763 mil
ISAL Iceland 40th tonnes aluminum mid 2012 $487 mil
      Rio Tinto (RIO) had a lot going for it and against it in 2011. Copper grades and low exit-year prices affected earnings in the second half. Fiscal year results were buoyed by iron ore which saw prices peak mid year and output grow to record levels (ended the year at $140/tonne vs high of $180/tonne mid year). Rio Tinto is Australia's biggest iron ore exporter and also a major producer of its coal (coal is Australia's single largest export earner). A $7 billion share buy back plan is nearing completion.

Of the $33 billion capital projects underway the largest one, Pilbara 283 ($9.7B) won't be ready until the end of 2013. The second largest, Oyu Tolgoi phase 1 ($6B) will be ready midyear 2013. Nine of the eighteen projects will be completed in 2012. 2015 is on track to be a big year for Rio with 167.7 million tonnes/yr of new iron-ore production coming online.

-Grasberg, Indonesia has been a joint venture with Freeport-McMoran since 1998.
-Sold 100% interest in Colowyo on Dec 1, 2011
-Rio is no longer in the business of talc as of August 1, 2011. That's why talc output is down; No attributable production from there since the 3Q 2011 when output fell to below 100 mil tonnes for the first time ever.  The talc unit, Luzenac which is the world's leader in talc production, was sold to a French company for $340 million.
-2012 will see new copper production from Coal & Allied in which Rio Tinto now has an 80.0% interest up from 75.7% (effective December 16, 2011).
-Spun off US coal operations in Dec 2010. That transaction netted the company $2 billion however it cut off nearly three quarters of Rio Tinto's coal production going back to 2009. The new company formed in the spinoff is Cloud Peak Energy which trades on the New York Stock Exchange as CLD.
-On Feb 20, 2012 announced a $518M investment in autonomous Iron Ore rail cars that will operate in Pilbara, Australia beginning in 2014 (at present Pilbara is the site of a major expansion project underway that will boost copper output significantly over the coming years beginning in 2013).
-all of the company's molybdenum comes from Kennecott Utah
-February 3, 2012: Rio Tinto Alcan begins restarting aluminum smelters in Shawinigan, Quebec
-Doubled interest in Richards Bay Minerals to 74% from 37%. RBM is a South African titanium dioxide company. That will lead to an inevitable increase in titanium production.
-Hecla Mining, the US's largest primary producer of silver gets 68% of its silver from a mine that Rio Tinto owned up until April 2008 (Green's Creek).

Financial Highlights quoted in US Dollars
Higher commodity prices led to a record in underlying earnings (+11% to $15.5 billion), record in ebitda (+10% to $28.5 billion) and record in cash flow from operations (+16% to $27.4 billion). Capex was 2.67X higher at $12.3 billion. Surprisingly all of this didn't translate into higher net earnings which were down 59% to $5.8 billion on account of impairment costs amounting to $8.9 billion, associated with the aluminum business. Don't be too concerned about the fall in EPS to $3.035 from $7.31 in 2010; dividend per share was $1.45 +34% vs 2010. Here's some background on what Rio Tinto excludes when determining underlying earnings.

In 2011 Rio Tinto spent $6.1 billion on acquisitions, $2.2 billion on dividend payouts and $6.2 billion on taxes. Cash flows from operations have nearly doubled since 2009. Targeted 2012 capex is $16 billion or over 30% higher than 2011 with about 3/4 of it going to Australia (over half) and Canada (less than a quarter).

Iron Ore
This continues to be Rio Tinto's backbone. It is the largest source of EBITDA contributing 73.4% of the group's product total of earnings before taxes ($20.93b/$29.491b) which is up from 62.4% in 2010 (was as low as 43% in 2008). Iron ore contributed 78.0% of group earnings in 2011 up from 67.6%.

Iron ore output from the 6 of 8 Hamersley iron ore mines that Rio owns outright, was 7.8% higher on the year (121.525M tonnes). The other two Hamersley mines are 60% owned and produced 15.994M tonnes (up 1.13% from 15,816 in 2010).

As of 2011 global iron ore production capacity was announced for 800 Mt annually but by 2011 4Q only 200 Mt was achieved.

Contributed 6.9% of ebitda down from 16.9% in 2010. Copper earnings were down 23.6% and the reason for that is two-fold: total mined copper down 23% stemming from lower grade ore at Escondida and Kennecott Utah, the same thing that negatively affected results at the end of last year and also the price of copper, down to $3.44/lb in December from $4.24/lb mid year. The lower grades are only temporary given that grades will come in higher in the coming years due to the commencement of operations at new projects/expansion projects

Oyu Tolgoi - Construction is currently 70% complete, by 2013 it should be producing 1.2 billion pounds of copper per year then working its way up to 1.7 billion pounds by year seven in 2019-2020. Ivanhoe Mines has a direct, controlling stake in the project (66%, ownership is not through South Gobi) and Rio Tinto has a 49% interest in Ivanhoe Mines and strong board representation (7/13 Ivanhoe board members represent the interests of Rio Tinto). Just recently Bank of America said that Ivanhoe Mines will be a leading position for copper in 2018 when it will be "one of the world's 10 leading copper producers".
Escondida - the site of major project expansions underway in Chile where just last week Rio Tinto and its partners (30/70 interest) approved a $1.4B expansion.
Pilbara - Output expands to 283M tonnes/yr by 2013, 353Mt by 1H2015. The company just announced yesterday its US$518 million autonomous rail network which will the first of its kind. Rio Tinto's rail network is currently 1,500 km long and has 148 trains. Copper production from Pilbara was down 7% in 2011 due to lower recoveries key equipment being unavailable.

Rio Tinto is probably not complaining about the temporary decline in copper production considering that copper prices ended the year at a low point (3.44/lb Dec 31 vs $4.24/lb June 30).

Northparkes was only one of five major copper operations that recorded a year on year increase in output. Mined copper was +29% on the year, +34% in the 4Q as a result of optimization projects being implemented & higher grades from section E48.

Gold and Silver
Lower grades caused gold (-12.3%) and silver (-27.0%) output to decline from 2010 levels however that is expected to change in 2hlf 2012 and 2013 when grades will get a boost from new mining activity in Mongolia and elsewhere. Oyu Tolgoi possibly beginning in 2013, will produce silver at a rate of 3 million ounces a year (59 year mine life) and 650,000 ounces of gold.

33.2% of the decline in silver output (605/1823) was due lower production from Grasberg, the smallest of Rio's four silver mines; Grasberg is a joint venture. Silver production from the largest of its operating mines, the 100% owned Bingham Canyon mine was 20% lower to 2.976 mil ounces. The second largest source of silver, Escondida is only 30% owned (prod there down 29.5%).

Though mined silver production fell on the year, refined silver output (all of it occurring at Kennecott Utah) was +32.61% to 4.732 million ounces.

Primary Aluminum
13 of the 21 mines are 100% owned. Those 13 produced 2442 thousand tonnes of aluminum in 2011 up 30.73% from 2010 when output was 1868.

The largest of Rio's three diamond mines is Argyle in Western Australia. Argyle produced 7.441m carats in 2011 which is down 24.1% from 2010. In contrast, the 60% owned Diavik mine in NWT increased its output by 2.72% to 6.677m carats while 77.8% owned Murrowam Zimbabwe produced 2.06X more at 367,000 carats.

Sunday, February 12, 2012

Peak Oil? Suncor, Cenovus Energy, Penn West, CNRL & Alberta: Conventional Output Higher

        With the exception of a brief period in the late 1990's when oil prices were too low as to encourage oil sands growth, oil production in Alberta has been in a long term upward trend.

Over the last decade output of crude and synthetic crude has risen sharply, however conventional sources like light & medium oil have not and that has given some credibility to the peak oil theory. Recent data coming out of Alberta shows a surprising reversal to this trend: Production light and medium oil will reach 500,000 bpd in 2014. In 2011 alone, medium/light oil output increased by 70,000 bpd which represents the largest year on year gain in over a decade; that trend is expected to continue into the near future. Keep in mind that the trend is still very new, between 2002 and 2010 output from conventional sources declined by 33%, 50% since 1995. The last time conventional oil was produced at a rate higher than it currently is, was back in 2006. Remember though that future supply depends a lot more on heavier crude than conventional (the oil sands are on track to account for 88% of Alberta's oil production by 2017 up from 64% in 2007).

Alberta disadvantages:
--> More than half of oil exports go to refineries in an area known as PADD II in the US Midwest. Because of a glut of supply, Canadian oil is more heavily discounted there than it is in PADD III which is Texas (why getting the Keystone pipeline approved is so important).
--> Western Canadian Select (WCS) oil trades $33 below West Texas Intermediate (WTI).
--> Export market not diversified : 99% of Canadian oil goes to only one market, the United States.

Alberta advantages:
--> Among lowest royalties in the world, something that makes it easier to attract foreign investment.
--> Canada is home to 90% of the world's oil reserves outside opec.
--> Calgary is home to more than 2,000 petroleum companies. TSX Venture Exchange makes attracting investment easier to do for statups.

At Canadian Natural Resources Limited Canada's leading producer, drills for conventional are are yielding better results; conventional oil production will grow by 17% in 2012 even though the number of wells drilled will be reduced by 62 (956/2000 wells vs 1018/2004 in 2011).

The company's reserves of light and medium oil in Alberta came in at 150 on Dec 31, 2010 up 6.4% from a year before. That compares to a -4.9% in the North Sea (to 252M bbls) and -11.8% offshore West Africa (to 120M bbls). Furthermore, in November 2011 company president Steve Laut credited much of the 24% 2012 increase in crude oil output to "Canadian light oil & NGL's growth". Growth in North American light oil will be +17% in 2012 due to the implementation of a new Enhanced Oil Recovery (EOR) program. The overall growth in BOE will also be spurred by expansion of the company gas facility in NE British Columbia but still Alberta will remain the most important source.
As oil sands production grows, companies such as Canadian Natural Resources are improvising in order to reduce their reliance on water from the Athabasca river, so that they continue to remain below the usage limit set by the province (was 360 million m3 a couple years ago, only about 1% of water from the river is used by the province and oil and gas operations); CNRL now separates water from solids more effectively by injecting carbon dioxide captured from its hydrogen plant into tailings lakes reducing the need for additional water. The Athabasca River is fed by a glacier 1,200 km away. 90% of conventional oil reserves are controlled by state owned oil companies.

Cenovus Energy                 (more indepth coverage by me can be found at Cenovus Energy production reserves)  
On February 15, 2012 Cenovus released data for the 2011 fiscal year and the results are very impressive!  Even though the stock was down little more than 1% on the day of the news TD Newcrest upgraded CVE from hold to buy.
Net asset value per share is $37 up 32% from 2010 year-end ($28).
Net Income $1.95/share (+37%) even though operating earnings were +55% to $1.64/share.  The company profited $1.478b on the year ($1.081m in 2010, $680m in 2009, $2.487b in 2008).

-> Total proved reserves up 17% to 1.9455 billion barrels of oil equivalent.  What's most notable there is the amount of bitumen reserves.  On December 31, 2010 bitumen reserves were 1.154B boe.  Today they are 1.455B boe an increase of 26%.  Contingent resources increased 34% to 8.2B boe.  Reserves of light and medium oil (& ngl's) +3.6% to 115M boe but natural gas -13% to 200M boe (which is inline with company plans to focus capital away from gas to bitumen, long-term production target is 400 MMcf/d, 575-600 for 2012). 2P proved + probable reserves +10.7% to 2,660.7M boe.
-> Production:  Total Oil/Bitumen/NGL's 134,000 bpd which is up 3.88% vs 2010 (129,000 bpd), up 12.61% vs 2009 (119,000 bpd).
Oil sands +13.56% or 8 bpd to 67,000 bpd, +52.27% vs 2009.  Christina Lake 12,000 bpd +50% vs 2010 (4Q2011 150% higher than 4Q2010 20,000 bpd).  Quarterly high was 4Q2011 at 75,000 bpd (13.6% higher than 3Q2011 which is the largest quarter to quarter increase in a while).
Conventional oil down 2,000 bpd to 68,000 bpd (Pelican Lake, Weyburn -10% to 36,000 bpd).
Natural gas output took a 737 nosedive (no pun intended :) from 737 MMcf/d (122.8 boe/d) to 656 MMcf/d (~110,000 boe/d).  Gas production averaged 837 MMcf/d in 2009 (140 boe/d).
 -> CAPEX: $3.1-$3.4B planned for 2012 which is more than the $2.7B spent in 2011 ($900M at Foster Creek + Christina Lake, $400M at the Wood River Refinery in Roxana, Illinois).
-> Cash flow +33% to $3.3.  Operating Cost at CL +23% to $20.2/bbl (+28% not excl fuel).  Weyburn's operating costs were also up but they are still roughly half of CL.

Christina Lake consists of seven phases of development.  The last phase G won't be completed until the start of 2019.  Phase E is 30% complete, phase D is 70% complete.  When project is complete Christina Lake will production at a rate of 278,000 bpd (in the last quarter production was only 20,000 bpd).

Last year Suncor's total production was hit hard by the situtation in Libya however there is optimism surrounding the company right now; 3 of its 5 fields there have already resumed operations (Jan 2012).
Also up at Suncor, oil sands output ! In December of 2011 Suncor's oil sands output averaged a monthly record high of 345,000 bpd, that record was broken the next month in January 2012 when 355,000 bpd production was reached.
Remember too, that oil sands output was only 162,000 bpd as recently as May 2011. Suncor finished 2011 averaging just over 10,000 bpd in Libya up from nothing; 2Q of last year it took on a $514 million writedown in the value of its Libyan assets.

Suncor is Canada's largest oil company by market capitalization (though second to Canadian Natural Resources in terms of production) and is the largest producer of oil sands oil through a 12% interest in the Syncrude Canada Ltd. mine, a 41% stake in the Fort Hills mine and operations at Firebag & Mackay river.

Penn West Exploration        Penn West 3Q 2011 Report    Penn West 4Q 2011 Report

4Q: For the 2011 year 18.0% of total oil and gas sales went to royalty payments ($661m/$3667m) down from 17.8% in 2010.  Expenses were 69.0% higher ($1503m --> $2540m) mostly due to the company's gain on dispositions being $910m lower than in 2010.
Prices In the 4Q, light oil and liquids was sold at an average price of $88.76/boe (up 25%), heavy oil $76.88/boe (up 24%), natural gas $3.47/mcf (down 8%).  For the year oil and liquids were priced at $86.19 (up 24%), heavy oil $69.07 (up 14%), natural gas $3.78/mmcf (down 10%).  HOWEVER because of the company's constantly changing hedging strategy, oil prices realized varied even more;  light oil realized in 2011 was $87.18 (up 30% from 2010), heavy oil $76.88 (up 24%), natural gas hedging included, $3.47 (down 15% because in 2010 hedging caused it to gain an additional $0.31/mcf).
In 2011, light oil and ngl's represent 52.31% of total output (85,316/163,094 bpd) up from 49.02% in 2010 (80,706/164,633 bpd) heavy oil 17,892 bpd or 10.97% of production (down from 11.09% 18,260 bpd), natural gas 59,886 boe/d or 36.72% of production (down from 39.9% 65,667 bpd).
Overall, operating netback declined the most for natural gas, -53% to $0.99/mcf.  The reserve replacement ratio was 234% up from 122% in 2010, 73% of which was liquids (65% liquids in 2010).  Although gross revenue (+19% to $3.604B) and funds flow (+30% to $1.537B) were up, net income was -43% to $638M making earnings per share $1.37 basic (-45%), $1.36 diluted (-45%).

For 2012 the company has hedged 60,000 bpd of liquids at between US$85.53 and US$101.16.

In 2011, light oil and ngl's production was up 6.20% to 85,316 bpd (+2% to 90,185 in the 4Q), conventional heavy oil down 2.0% to 17,892 bpd (but +6.15% to 17,886 bpd in the 4Q), natural gas down 9% to 359 mcf/d (but steady in the last quarter at 364 mcf/d).
Royalties for the 2011 fiscal year: +23% to $16.83/boe for light oil, +15% to $10.01/boe for heavy oil, $0.54/mcf for natural gas (down 7%).  Overall risk management loss per boe was $1.06/boe (+212%) but overall netback (profit) per boe was still up 23% due to prices being 20% higher overall.

Risk management losses (hedging prices) were less negative than they were in 2010.  $2.03/bbl for light oil (down 25% vs 2010), and $0 for natural gas (compared to a gain of $0.42/mcf in 2010).

3Q: During the first nine months of 2011 revenue from light oil and ngl's went up 36% ($1417 --> C$1921m) compared to only 5% for heavy oil. Peak oil doesn't seem to be a reality for Penn West either: For the first three quarters of 2011 light oil production was up by 7.14% or 5,578 bpd even though total oil production by Penn West declined 1.80% or 2,952 bpd to 161,171 bdp.
9M2011 light oil & ngl's output: 83,675 bbls/d (3Q: 83,287 b/d) total production: 161,171 bbls/d (3Q: 161,323 b/d)
9M2010 light oil & ngl's output: 78,087 bbls/d (3Q: 80,614 b/d) total production: 164,123 bbls/d (3Q: 164,087 b/d)

2012 forecast: total production up to 174-178,000 bpd up from 162-164,000 bpd in 2011. capex spending in 2012 estimated to be $1.6B.         Like North American Interests on Facebook

Wednesday, February 8, 2012

Companies Piquing Interest Research in Motion RIMM, Transforce TFI, McDonalds MCD

Research in Motion (RIM in Toronto, RIMM on Nasdaq)

  The maker of the BlackBerry smartphone has seen heavy trading volume ever since January 25, the day Toronto-based investment firm Fairfax initiated its purchase of 14.1 million RIM shares for $400M which raised its stake to just over 5.1% (about the same as what's held by RIM founder Balsille).

That same day outgoing RIM Chair, Lazaridis upped his interest by 3.1 million shares (over $50M worth) bringing his total up to 30M shares (5.6% of company). Volume of trading in shares of RIMM (Nasdaq) has ranged from 1.5X to as high as 5-6X the average.
The company still trades 18% below book value which isn't fair given that the book value of the company actually went up last quarter consequently the stock price continued its descent. As well, RIM has not lost its title as market share leader in South Africa 70% (2nd is Nokia), Canada 35.8% (in November among platforms, leading Apple which is just over 30%), Indonesia 46% (3Q2011 up from 40%, 2nd is Android at 29%) and Latin America 25.6% (2nd is Samsung at 23%).
In my opinion, the company is being valued at a price uncharacteristic for tech companies. Take Book Value Per Share for example; Feb 9, 2012: RIM's 0.83X is much lower than Apple 4.94X, Google 3.41X & even Nokia 1.12X, Motorola 2.36X; RIM's book value per share of 0.83 on Feb 9, 2012 is near a record low, only one year ago on Feb 28, 2011 it was 3.88X.
P/E ratio continues to be under 4.0 which remains much lower than competitors Motorola and Nokia, companies that are also losing market share in the U.S. to Apple and Android. In my opinion the market is giving rim's 2012 QNX product launch NO respect meaning that the next generation blackberry phones don't need to be groundbreaking for the stock to capitalize. RIM has had years to work on development and its research and development spending is comparable to Apple's (doesn't even take into consideration the 2010 acquisition of QNX) and has been going up (+3.4% to $369M last quarter).
Apple losing market share in Germany, France; In the three months ending November 2011 Apple's share of the smartphone market in Germany slipped to 22% from 27% subsequently in France it declined to 20% from 29%. Opportunity for BlackBerry ? Perhaps, but it still must contend with Android which leads by a significant margin in Germany where's it's at 61%.
Update : On February 14, 2012 it was revealed that Greenlight Capital Inc bought more shares of RIMM (total investment in technology stocks increased by 8.1%). During the same quarter, Leon Cooperman's Omega Advisers bought 1.51 million shares doubling its position. 2012 earnings estimate for RIM puts eps at $2.92.  Week of February 27, 2012 Wordpress releases an app that makes updating and creating content easier to do for PlayBook users.

RIM recently showed off what the QNX platform can do in a concept Porche. All of the systems in the QNX platform are available to auto manufacturers, which can tailor the technologies to their own specifications, so in the future RIM's business might not be limited to just handheld devices. The next generation of QNX auto will be more auto-centric and based on HTML5. Also of note: An NFC chip makes it possible to link a blackberry phone to the car. The console allows for easier navigation and better sound quality!
Over the last month RIMM was up over 9% but the stock has severely underperformed in the long term, -12% last three months, -24% last six months meaning there's still a lot of room to grow (even Nokia is up over 6% last six months). In the short term the overall trend seems to be up for tech companies so I'd expect the same for Research In Motion.

*RIM recently received FIPS 140-2 certification of its BlackBerry 7 smartphones. The award emphasizes security and is issued by a Canadian agency.
*November 14, 2011: BlackBerry 7 phones awarded common criteria EAL4+ Certification meaning that the combination of security mechanisms and product design meets the highest level of accreditation. This applies directly to the BlackBerry® Bold™ 9900, BlackBerry® Torch™ 9810, BlackBerry® Torch™ 9860 and BlackBerry® Curve™ 9360
*Carriers such as Sprint still refuse to carry the Playbook despite it being recommended by the US federal government and BlackBerry already being ingrained in the corporate market through mobile enterprise. Much of the 42% growth in tablet sales in 2012 will come from outside North America where companies rely less on Sprint for marketing. I think that will play well for RIM which currently has only 1% of the tablet market. Currently, RIM's tablet business only makes up 0.2% of the company's stock price (by comparison phones are 52%, according to trefis). Also of note: 18% of Apple's share price comes from cash net of debt, comparable to RIM's 17%. The iPad contributes 12.7% of Apple's price.
*Revenue outside the U.S., UK, and Canada was up 48% over the last three quarters of 2011 to US$8.24B. That compares to a revenue decrease of 44% in the United States. I think that the future of the smartphone market is outside of the USA (smartphones are already becoming commonplace there unlike much of the developing world like Indonesia and even Brazil where bandwidth remains constrained). Investors are undoubtedly overly concerned with the American market rather than looking at the global picture. More info at RIM & BlackBerry still leaders.

Transforce (tsx:TFI)
Canada's biggest trucking company and one of the five biggest in North America. It's not afraid of making acquisitions. Over the last year it has become a player in the United States through acquisitions Dynamex ($248M) and IE Miller Services (Nov. 2011, $138M in annual revenue). It has also become a major player in the oil and gas sector where it now operates oil rig transporters/oil field terminals in both Alberta and North Dakota (shale).

Also to consider before choosing this company:
*Canadian trucks have FULL ACCESS to US roads.
*Transforce dividend in this current fiscal year is on track to be at least 12-15% higher than last year (45c vs 40c, could be more if the final quarter shows new growth). That's significant considering the company's annual dividend has been stagnant the previous two years.
*TFI stock as traded on the Toronto Stock Exchange is up 28% last 3 months, 34% last 6 months.
*Revenue for the quarter ended September 30, 2011 was $742.98M 32.4% higher than the quarter ended March; quarterly revenue had been stuck between $500 and $560M for a number of quarters prior to that. As compared to the March 2011 quarter the September quarter earnings per share did not increase HOWEVER dividends were up by 25% !

McDonalds (nyse:MCD)

6.7% overall increase in same-store sales in January 2012; 7.8% increase in the USA, 7.3% increase in Asia, 4.0% increase in Europe (any growth in Europe is a positive sign considering the region's economic turmoil). Even more, without considering the changes in currency same-stores sales showed an overall increase of 9.1%. The 7.8% increase for the USA compares to just 3.1% last year which bodes well for the US market. Other notes: Results from Russia are included in the category for Europe. Sales from franchisee operated locations (80% of the 33,000 locations) are only considered in system-wide sales not in company revenue.

In the quarter ended December 2011, McDonalds revenue was $6.8227 billion up 9.80% from 4Q2010 but down 4.80% from the previous quarter, profit was down 8.7% q2q HOWEVER dividend per share was 14.75% higher than the previous quarter at 71 cents. Remember too that McDonald's dividend had been the same quarterly for over a year before the latest quarter when it went up to 70 cents from the usual 61 cents. The company profited 1.376B in the December quarter and $5.503B on the year. Fiscal 2011 revenue +12.1% on the year compared to only +5.85% in 2010 and -3.306% in 2009 so the long term trend is also a source of optimism.
Your next question is probably how's the stock doing. Very well, it's up 1.7% last 5 days, been stable over the last month, but 5.76% higher over the last 3 months. Long term: +21.85% last 6 months, +32.76% last 12 months, +124.63% last 5 years, +274.44% last 10 years. Both short-term and long-term performance is great which bodes well for investor confidence. I also like how diversified McDonalds has become. It is less reliant on the US market than it ever was before. How many other companies get 68 million customers in 119 countries every day ?

McDonalds has also been busy renovating stores, in Canada at least. The company has already begun its $1 billion 2012 effort to modernize 1,400 locations across Canada.

Bombardier (tsx:BBD.B) led the Toronto Stock Exchange in terms of volume trading on February 8, 2012. The volume was 8,862,715 shares.

Gold Investing  On Feb 9, 2012 Warren Buffet argued against owning gold in an article posted on Forbes.  He raises some interesting points but in my opinion the assessment makes assumptions that aren't relevant today.  Didn't give enough examples of when cash wasn't king as was the case in the 1930's.  Also fallacious:  Noone is able to choose Pile A (all the world's gold) and Pile B (all the world's crop land).  Simply stated, it's unrealistic.
Also, consider that 64% of Ron Paul's investments are mining stocks.  UBS: 22% of central banks consider gold the most important reserve asset for the next 25 years.  Billionaires like George Soros are investing in gold like never before.