Pat McKeough

A professional investment analyst for more than 30 years, Pat has developed a stock-selection technique that has proven reliable in both bull and bear markets. His proprietary ValuVesting System™ focuses on stocks that provide exceptional quality at relatively low prices. Many savvy investors and industry leaders consider it the most powerful stock-picking method ever created.

As early as 1980, Pat was recognized as #1 in the world of published investment advice by the Washington, DC–based Newsletter Publishers Association, and he was the first multi-year winner of The Globe and Mail’s stock picking contest.

Both CBS MarketWatch and The Hulbert Financial Digest recognized Pat as one of North America’s top stock analysts. The Wall Street Journal called him “one of only four investment newsletter advisors who have managed to serve their readers well over the long haul.”

A best-selling Canadian author, he wrote Riding the Bull, his 1993 book that predicted the stock-market boom of the last half of that decade. Through his many television appearances, he is well-known to investors for his insightful analysis and his candid, unpretentious style.

Bottom line: Pat’s conservative, reduced-risk strategy is a proven approach to safe investing.

GLOBAL X COPPER MINERS ETF $15.44 (New York symbol COPX; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Copper Miners Index, which includes 20 to 40 international companies that mine, refine or explore for copper. Germany-based Structured Solutions AG created this index. Canadian firms make up 36.6% of the ETF’s holdings. They also include companies based in Australia (14.2%), Peru (5.1%), Mexico (5.0%) and China (4.5%). The fund’s MER is 0.65%. Its top holdings are Teck Resources at 7.7%; Oz Minerals, 7.0%; CST Mining Group, 6.5%; Glencore plc, 5.8%; First Quantum Minerals, 5.8%; Capstone Mining, 5.6%; Kaz Minerals plc, 5.5%; Lundin Mining, 5.0%; Southern Copper, 4.8%; Freeport-McMoran, 4.7%; Sandfire Resources, 4.5%; and Grupo Mexico, 4.5%....
PEYTO EXPLORATION & DEVELOPMENT CORP. $30.95 (Toronto symbol PEY; Shares outstanding: 159.2 million; Market cap: $4.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.3%; www.peyto.com) produces and explores for oil and natural gas in Alberta. Its average daily production of 97,028 barrels of oil equivalent is 93% gas and 7% oil. In the three months ended December 31, 2015, Peyto’s cash flow fell 15.9%, to $0.95 a share from $1.13 a year ago. It raised its production by 16.5%, but that was offset by lower oil and gas prices. Its realized oil price year over year fell 28.1%, and natural gas prices fell 20.9%. The company has cut it’s original 2016 capital spending of $600 million to $650 million down to between $500 million and $550 million. It spent $594 million in 2015....
BONAVISTA ENERGY $2.76 (Toronto symbol BNP; Shares outstanding: 214.0 million; Market cap: $626.1 million; TSINetwork Rating: Extra Risk; Dividend yield: 4.4%; www.bonavistaenergy.com) explores for oil and gas in Alberta, Saskatchewan and B.C. Its output is 68% gas and 32% oil. In the quarter ended December 31, 2015, Bonavista’s cash flow per share fell 30.2%, to $0.44 from $0.63 a year earlier. Most of that drop came from lower oil and gas prices, but also because of falling output. It declined 6.9%, to 79,862 barrels of oil equivalent per day from 85,810 barrels. Like many producers, the company will cut its exploration and development. In 2016, it plans to spend $145 million to $190 million. That’s a reduction from Bonavista’s initial announcement of $210 million, which is down from the $283.4 million it spent in 2015. It spent $639.6 million in 2014....
CENOVUS ENERGY $18.88 (Toronto symbol CVE; Shares outstanding: 833.2 million; Market cap: $15.8 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.cenovus.com) owns oil sands operations and conventional wells in Western Canada. It ships its oil to its 50%- owned refineries in Illinois and Texas. Due to low oil prices, Cenovus has shrunk its workforce by 31% since the start of 2015. These cuts will save it $200 million this year. They should also help expand its cash flow when oil prices recover. In the first quarter of 2016, the company’s cash flow was just $26 million, or $0.03 a share, Meanwhile, the balance sheet is strong: Cenovus holds cash of $3.9 billion, or $4.68 a share. Long-term debt of $6.1 billion is a manageable 38% of its market cap....
ISHARES S&P/TSX 60 INDEX ETF $20.09 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index—the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.18% of assets, and it yields 2.9%. The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include. The index’s top holdings are Royal Bank, 8.6%; TD Bank, 7.7%; Bank of Nova Scotia, 5.9%; CN Railway, 4.6%; Suncor Energy, 4.4%; Bank of Montreal, 3.9%; BCE, 3.8%; Enbridge, 3.6%; Canadian Natural Resources, 3.1%; CIBC, 3.0%; and Brookfield Asset Management, 2.8%....
ISHARES CANADIAN SELECT DIVIDEND INDEX ETF $21.88 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highestyield Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of the ETF’s assets. The fund’s MER is 0.55%, and it yields 4.3%. iShares Canadian Select Dividend’s MER is higher than, say, the iShares S&P/TSX 60 Index ETF because it’s more actively managed. Most market indexes are set up so that the stocks in the index are those with the highest market capitalization and also the most widely traded. However, the iShares Canadian Select Dividend Index ETF aims to zero in on the 30 stocks that it sees as having the highest dividend yields—and yet also the best propects for dividend growth and sustainability. The fund’s top holdings are CIBC, 8.4%; Agrium, 7.4%; Bank of Montreal, 6.0%; Royal Bank, 5.8%; Bank of Nova Scotia, 5.0%; BCE, 4.5%; IGM Financial, 4.1%; Laurentian Bank of Canada, 4.1%; National Bank, 4.0%; TransCanada Corp., 4.0%; TD Bank, 3.5%; and Emera, 3.1%....
SPDR S&P 500 ETF $205.01 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. companies chosen based on their market cap, liquidity and industry group. The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Facebook, Johnson & Johnson, JPMorgan Chase, AT&T, General Electric, Berkshire Hathaway and Wells Fargo. The fund’s MER is just 0.11%, and it yields 2.1%. SPDR S&P 500 ETF is a top ETF pick for 2016.
SPDR DOW JONES INDUSTRIAL AVERAGE ETF $176.32 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average. This ETF’s top holdings are Goldman Sachs, IBM, Home Depot, Travelers Cos., Johnson & Johnson, UnitedHealth, United Technologies, McDonald’s, 3M and Boeing. The fund’s expenses are about 0.17% of its assets, and it yields 2.4%. SPDR Dow Jones ETF is a buy.
POWERSHARES QQQ ETF $105.05 (Nasdaq symbol QQQ; buy or sell through brokers; www. invescopowershares.com), formerly called Nasdaq 100 Trust Shares, holds stocks representing the Nasdaq 100 Index. That consists of the 100 largest shares on the Nasdaq exchange by market cap. The Nasdaq 100 Index contains shares of companies in a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial firms. The fund’s expenses are about 0.20% of its assets. It yields 1.2%. The index’s highest-weighted stocks are Apple, Microsoft, Texas Instruments, Alphabet Inc., Cisco Systems, Intel Corp., Amazon.com, Gilead Sciences, Comcast and Facebook....