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.

WAL-MART STORES INC. $64 (New York symbol WMT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 3.2 billion; Market cap: $204.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.walmart.com) is the world’s largest retailer, with 11,600 stores in 27 countries....
The lower Canadian dollar has made it more expensive to buy U.S. stocks. However, the American market gives you access to the world’s leading companies. What’s more, U.S. dollar investments give you foreign currency diversification. We feel it’s more important than ever to build a varied portfolio of high-quality stocks. For 2016, we’ve chosen one from each of our portfolios (Aggressive, Conservative and Income). We think all three could post strong gains in the next two to five years. ALPHABET INC. (Nasdaq symbols GOOG $700 [class C: nonvoting] and GOOGL $718 [class A: one vote per share]; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 687.7 million; Market cap: $493.5 billion; Priceto- sales ratio: 7.0; No dividends paid; TSINetwork Rating: Above Average; www.abc.xyz) is the new parent company of Google’s Internet search business (still called Google) and other operations. Each of these subsidiaries functions independently....
SYMANTEC CORP. $19 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 680.0 million; Market cap: $12.9 billion; Priceto- sales ratio: 2.1; Dividend yield: 3.2%; TSINetwork Rating: Average; www.symantec.com) said in 2014 that it would split into two publicly traded firms. One would keep the Symantec name and focus on antivirus and security software. The other, called Veritas Technologies, would focus on Symantec’s information-management business, which makes products for data backup and recovery. However, the company instead decided to sell Veritas to the Carlyle Group (Nasdaq symbol CG) for $8.0 billion. Now Carlyle seems to be having trouble raising the funds to buy Veritas. As a result, Symantec and Carlyle have altered the deal’s terms. Symantec will now receive $7.0 billion, including $6.6 billion in cash and $400 million in Veritas stock. It plans to complete the sale by the end of January 2016....
ADOBE SYSTEMS INC. $85 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 498.3 million; Market cap: $42.4 billion; Price-to-sales ratio: 9.0; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) makes software for publishing companies and website developers. Its main products include Adobe Acrobat, which lets users create and edit electronic documents in the widely used PDF format, and its Creative Suite package of photo editing and desktop publishing programs. In 2012, Adobe started selling its Creative Suite software as a cloud-based service called Creative Cloud. The company now gets 74% of its revenue from recurring sources....
TEXAS INSTRUMENTS INC. $51 (Nasdaq symbol TXN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.0 billion; Market cap: $51.0 billion; Price- to-sales ratio: 3.9; Dividend yield: 3.0%; TSINetwork Rating: Average; www.ti.com) specializes in analog chips, which convert inputs like touch, sound and pressure into electronic signals that computers can understand. Manufacturers use these chips in a variety of products, including cars, cameras, medical devices and appliances. In 2015, Texas Instruments’ earnings rose 5.8%, to $3.0 billion from $2.8 billion in 2014. It spent $2.7 billion on share buybacks during the year, so earnings per share gained 9.7%, to $2.82 from $2.57. Overall revenue fell 0.3%, to $13.00 billion from $13.05 billion. Sales of analog chips (64% of the total) rose 2.9%. Revenue from embedded processor chips (21%), which perform mathematical calculations, gained 1.7%. However, revenue from other chips and calculators (15%) fell 14.9%....
APPLE INC. $93 (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.5 billion; Market cap: $511.5 billion; Price-to-sales ratio: 2.4; Dividend yield: 2.2%; TSINetwork Rating: Average; www.apple.com) gets about two-thirds of its revenue from its iPhone smartphone. The remaining third comes from its Mac computers, iPad tablets, iPod music players and sales of software, movies and music through its iTunes online store. In its fiscal 2016 first quarter, which ended December 26, 2015, Apple sold 74.8 million iPhones, up just 0.4% from 74.5 million a year earlier. That’s mainly due to slowing demand in China. Users are also waiting for the company to launch a new model later this year....
Computer technology continues to change— and spread— rapidly. We feel the best way to profit from this growth is by investing in well-established companies that lead their markets, like the four we analyze below. All of them have strong earnings and balance sheets. That lets them spend heavily on product development and buy smaller firms with attractive technologies. We have a high opinion of all four, but we see only two as buys right now....
INTERNATIONAL BUSINESS MACHINES CORP. $121 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 970.1 million; Market cap: $117.4 billion; Price-to-sales ratio: 1.5; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.ibm.com) recently paid $130 million for Ustream, a private firm specializing in cloud-based videostreaming services. Its clients include NASA, Samsung, Facebook, Nike and the Discovery Channel. The purchase will help IBM with its plan to bring its analyticssoftware expertise to online video content. This will help its clients make better use of their video libraries and protect their copyrighted material. The company expects the market for cloud-based video services and software to total $105 billion by 2019. IBM is a buy....
BHP BILLITON LTD. ADRs $21 (New York symbol BHP; Conservative Growth Portfolio, Resources sector; ADRs outstanding: 1.6 billion; Market cap: $33.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 11.8%; TSINetwork Rating: Average; www.bhpbilliton.com) will write down its U.S. onshore oil holdings by $4.9 billion (after taxes) in response to the decline in oil prices. In 2011, it spent $20.6 billion on acquisitions of U.S. shale oil and gas properties. The company is also seeing sharply lower prices for its other commodities, including iron ore, metallurgical coal and copper. The resulting decline in BHP’s cash flow will probably prompt it to cut its $2.48 dividend, which yields a high 11.8%. BHP Billiton is still a hold.