Text size: Small font Default font Larger font

Have an account? Please log in.

.
TSI Network
Patrick McKeough is one of Canada’s top safe-money advisors. The Wall Street Journal, Forbes and The Hulbert Financial Digest have all recognized his ability to find stocks with hidden value. He is editor and publisher of The Successful Investor, Stock Pickers Digest, Wall Street Stock Forecaster and Canadian Wealth Advisor; inventor of the Quick Profit/Value System and the ValuVesting System™. A best-selling Canadian author, he wrote Riding the Bull, the book that predicted the 1990s stock-market boom.

Our portfolio investing advice on 3 Canadian stocks

June 11, 2010 -  3 Comments
Posted by: Pat McKeough Filed in: Portfolio Management
  • Comments
  •  
  •  
.

Members of our Inner Circle service often ask for our portfolio investing advice on stocks they are thinking of buying that we don’t cover in our newsletters. These companies range from the most speculative penny mines to large multinational corporations.

Many of these stocks fall into a grey area. Sometimes our advice is that they are “okay to hold,” but we wouldn’t recommend them for new portfolio investing. When Inner Circle members ask about one of these companies, that’s what our advice would be: it’s “okay to hold.” But when they ask about companies we don’t recommend, we say so.

Here are three recent examples from our Inner Circle portfolio investing advice. One is a gold miner that could be on the verge of breathing new life into an old mine, another is a real-estate investment trust that’s overly concentrated in western Canada, and the third is a technology firm that aims to develop a safety-monitoring system for airliners.

Trelawney Mining and Exploration (symbol TRR on Toronto), owns three gold properties that are located halfway between the northern Ontario cities of Timmins and Sudbury. The properties centre on the Chester mine, which was nearly completed in the 1980s, but never went into production.

In early March 2010, Trelawney’s shares jumped from $0.60 to as high as $1.35. That’s when the company reported results from its latest drilling at Chester, which it conducted to see how much gold is beyond the known deposits. The drilling results included 107.11 metres of a high 8.20 grams per tonne of gold, including 313.55 grams per tonne over 2.56 metres.

Trelawney took advantage of the price rise to issue 14.2 million shares at $1.05 each. That raised $14.9 million, which the company will use to continue its exploration program at Chester.

Our portfolio investing advice: To make the Chester mine attractive, Trelawney needs gold prices to remain high. But the existing infrastructure and the 269,300-ounce resource base already established at the mine give it appeal. Trelawney is okay to hold, but only for highly aggressive investors.

In today's turbulent economy, you need clear, personalized investment guidance more than ever. That's what you get when you become a client of my portfolio management services. When you hire me and my expert staff to manage your investments for you, we employ the same value-investing principles I've followed for my entire career. But hurry, space is limited. Click here to learn more about how you can profit from my portfolio management services.

Artis REIT (symbol AX.UN on Toronto), is a real estate investment trust that owns industrial, office and retail properties in western Canada.

Artis continues to grow by acquisition. It recently bought a number of new properties in western Canada, including four in Alberta. The new properties will increase the company’s leasable space to 8.4 million square feet in 105 properties. Geographically, its leasable space breaks down as follows: Alberta (49.7%), Manitoba (31.6%), B.C. (11.0%) and Saskatchewan (7.7%).

The company’s largest corporate tenants include TransAlta, Sobeys, Shoppers Drug Mart, MTS Allstream and Bell Canada. Other major tenants include the federal government and the provincial governments of Alberta, Saskatchewan and Manitoba.

Artis pays a monthly distribution of $0.09 per unit. The annual rate of $1.08 yields 9.8%.

Our portfolio investing advice: Artis’s high yield gives it some appeal, but its concentration in western Canada adds risk. Focusing on any one province or region is more speculative than spreading out across the country. That’s especially true in western Canada, which depends more on high commodity prices than other parts of the country. The company’s growth-by-acquisition strategy also adds risk. We don’t recommend Artis REIT.

Star Navigation Systems Group (symbol SNA on Toronto), is developing a safety-monitoring system for airliners. Star’s technology collects and records flight data as it happens, and relays it to the company that owns the aircraft.

Star has sold few of its systems to date, and none to major airlines. In the three months ended March 31, 2010, its revenue was $75,660 compared to $196,503 a year earlier. The company lost $821,402, or $0.01 per share, in the latest quarter. A year earlier, it lost $490,606, or $0.01.

Star operates in a narrow and competitive market. To be successful, it will need to keep increasing its marketing and research spending: In the latest quarter, it spent $288,398 on these activities, up 44.7% from $199,254 a year earlier.

Our portfolio investing advice: Even if Star’s safety systems had substantial advantages over current systems, it would face a huge challenge to persuade doubtful purchasing agents to buy. Judging by revenue achieved to date, it doesn’t seem to have made any progress in that area. We don’t recommend Star Navigation.

If you have investment-related questions, or if you’d like to ask me about stocks you’re considering buying (or selling), you should join my Inner Circle service. Click here to learn more.

3 Comments
.

Permalink: http://www.tsinetwork.ca/?p=39609


All of our articles are available for republishing as long as you provide a link back to the original article.

Tags: , , , , , , , , , , , ,

  • Comments
  •  
  •  
.

Would you like us to inform you when new articles are posted?

What do you think? Go ahead and add your comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.

3 Responses to “Our portfolio investing advice on 3 Canadian stocks”

  1. “Portfolio Risk Management” – Stock Trading Lesson | Currency Trading Exchange Guide on June 11th, 2010 at 10:36 am

    [...] TSI Network»PostArchive » O&#965r portfolio investing advice &#959&#1495 3 Canadian stoc… [...]

  2. Vw Crosstouran, Volkswagen’s Newest Crossover Model | Discount MP3 Players on June 13th, 2010 at 6:41 pm

    [...] TSI Network»PostArchive » Our portfolio investing advice on 3 … [...]

  3. Canadian Stock Market - Topic Research, Trends and Surveys on July 17th, 2010 at 7:40 pm

    [...] trade at below-average price-to-earnings ratios. (In the latest issue of The Successful … Read More RECOMMENDED BOOKS REVIEWS AND OPINIONS Ezine Articles » Canadian Stock [...]

.

Free Subscription to
The Successful Investor Network Daily

  • Daily investment advice you can act on
  • Free access to our special stock market reports
  • Plus much, much more! Try it today
Twitter Facebook
Follow TSI Network on Twitter and Facebook!

TSI Network Products

In today's economy, it's more important than ever to have clear investment advice that is tailored to your own personal goals. This is where Pat McKeough's conservative safe-investing philosophy comes in. Through TSI Network, you get access to reports, monthly newsletters and premium services that go beyond the daily headlines to give you all the advice and information you need to build a portfolio with long-term growth potential. Simply click on the links below to discover which service is right for you.

.
.