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.

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The market followed up Wednesday’s big-volume turnaround with further gains yesterday—at day’s end, the Dow rose 216 points and the Nasdaq gained 40 points. The push higher by the major indexes took them above resistance levels, and gives us a clear Cabot Tides buy signal. As we mentioned on Wednesday, the market still faces many headwinds, the most important of which is that the longer-term trend remains down for the indexes and many stocks. But there’s no question the evidence has improved during the past three weeks, and with our Tides now positive, we’ll begin to put money to work in a couple of well-situated stocks with big growth expectations. The first is Sabre (SABR), which operates the most popular distribution network for air and hotel bookings in the world. Growth has been steady and should accelerate in 2016, and after a sharp correction, the stock has found huge-volume support after its recent earnings report and should do well going forward....
NEWELL RUBBERMAID INC. $38 (New York symbol NWL; Aggressive Growth and Income Portfolios, Consumer sector; Shares outstanding: 267.1 million; Market cap: $10.1 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.0%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, pens and many other household goods. Its main brands include Sharpie markers, Parker and Paper Mate pens, Calphalon cookware, Irwin tools and Graco car seats and strollers. Newell is up 26.7% since we named it our Stock of the Year for 2014 at $30. That’s mainly because of its successful multi-year cost-cutting plan, which included closing plants and merging distribution centres. Since it began the plan in October 2011, these moves have reduced its annual expenses by $360 million. The company is also selling less-important businesses and using the proceeds to buy smaller firms with more-profitable products, such as baby strollers and reusable water bottles....
UNITED TECHNOLOGIES CORP. $94 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 836.4 million; Market cap: $78.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.utc.com) jumped $5 on news that rival Honeywell International (New York symbol HON) seeks to merge the two firms. Anti-trust regulators are unlikely to approve such a merger: the combined company would dominate several markets, including aerospace products (such as jet engines and landing gear) and building equipment (elevators, thermostats). Meanwhile, United Technologies earned $5.6 billion in 2015. That’s down 5.5% from $5.9 billion in 2014. The company used the $9.1 billion it received from last year’s sale of its Sikorsky helicopter operations to buy back $10.0 billion of its shares. As a result, its per-share earnings fell just 2.5%, to $6.30 from $6.46. If you factor out exchange rates, per-share earnings gained 0.5% to $6.49....
TUPPERWARE BRANDS CORP. $49 (New York symbol TUP; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 49.7 million; Market cap: $2.4 billion; Price-to-sales ratio: 1.7; Dividend yield: 5.6%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) makes plastic food and beverage containers, as well as cosmetics and fragrances. It sells these products through 3.1 million independent dealers, which keeps its distribution costs down. We made Tupperware our Stock of the Year in 2011 when it was trading at $47. The stock got as high as $97 in 2013, but has moved down since. That’s mainly because the company gets over 80% of its revenue from outside of North America, and the high U.S. dollar has hurt the contribution of its overseas operations. Tupperware’s sales were flat at $2.6 billion in 2011 and 2012, but rose to $2.7 billion in 2013. Due to unfavourable exchange rates, sales fell to $2.6 billion in 2014, and to $2.3 billion in 2015. Without exchange rates, sales rose 3.5% in 2015....
MCDONALD’S CORP. $117 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 918.2 million; Market cap: $107.4 billion; Price-to-sales ratio: 4.2; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.mcdonalds.com) plans to sell 4,000 of its company-owned outlets to franchisees. As a result, franchisees will operate 93% of the chain’s 35,000 restaurants by 2018, compared to 81% today. This will lower the company’s operating expenses and free it from maintaining and upgrading these outlets. In addition, McDonald’s plans to cut $500 million a year from its administrative costs by the end of 2017. To put that goal in perspective, the company earned $4.5 billion in 2015, down 4.8% from $4.8 billion in 2014. Earnings per share fell just 0.4%, to $4.80 from $4.82, on fewer shares outstanding. If you disregard unfavourable currency exchange rates, earnings gained 5%, while per share earnings rose 10%....
YUM! BRANDS INC. $71 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 408.7 million; Market cap: $29.0 billion; Price-to-sales ratio: 2.2; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.yum.com) plans to spin off its operations in China as a separate, publicly traded firm. The company will hand out shares in Yum China to its own investors, who won’t be liable for capital gains taxes until they sell them. The company aims to complete the spinoff by the end of 2016. Currently, as a unit, Yum China operates 7,176 fast-food outlets (as of December 26, 2015) under the KFC, Pizza Hut and Taco Bell banners. In 2015, this division supplied 53% of Yum’s overall sales....