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.

Posts by the author
What does a diversified portfolio look like? A well-diversified portfolio balances risk by spreading investment holdings out by industry sector and other factors
VANGUARD GROWTH ETF $110.65 (New York symbol VUG; buy or sell through brokers) aims to track the Center for Research in Security Prices (CRSP) U.S. Large Cap Growth Index, a broadly diversified index that mainly consists of big U.S. companies. The fund’s MER is just 0.09%.

The $48.1-billion Vanguard Growth ETF’s top holdings are Apple, Alphabet, Coca-Cola, Facebook, Visa, Home Depot, Comcast, Amazon.com, Gilead Sciences and Walt Disney Co. The fund’s breakdown by industry is as follows: Technology, 23.9%; Consumer Services, 22.2%; Health Care, 13.7%; Financials, 12.5%; Industrials, 11.9%; Consumer Goods, 10.1%; Oil and Gas, 4.0%; Materials, 1.3%; and Telecom Services, 0.3%.

Vanguard Growth ETF is a buy.

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IBM $141.63 (New York symbol IBM; Shares outstanding: 979.5 million; Market cap: $137.4 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.ibm.com) continues to transition from selling mainframes and consulting services to high-growth areas like cloud computing and analytics software, which processes huge amounts of data.

IBM has successfully shifted from unprofitable businesses to fast-growing ones in the past, but investors remain cautious of the latest changes in a time of rapidly evolving technology and customer demands. That’s why the shares trade at just 9.5 times IBM’s forecast 2015 earnings.

In the three months ended September 30, 2015, the company’s revenue fell 13.9%, to $19.3 billion from $22.4 billion a year earlier. Revenue from cloud computing and analytics jumped 27%, but consulting and mainframe sales fell.

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CANADIAN PACIFIC RAILWAY $181.50 (Toronto symbol CP; Shares outstanding: 161.0 million; Market cap: $27.8 billion; TSINetwork Rating: Above Average; Yield: 0.8%; www.cpr.ca) ships freight over a 22,000-kilometre rail network between Montreal and Vancouver and links with hubs in the U.S. Midwest and northeast.

In the three months ended September 30, 2015, CP’s earnings per share rose 16.5%, to $2.69 from $2.31 a year earlier. Revenue increased 2.3%, to $1.71 billion from $1.67 billion.

CP’s operating ratio improved to a record 59.9% from 62.8% a year ago. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.) It continues to benefit from its efficiency improvements, including speeding up trains. The company saw higher revenue from shipping forest products, potash, grain, chemicals and automotive products. But lower shipments of oil and metals offset these gains.

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The many industrial uses of copper give copper stocks an advantage over gold and other precious metal stocks.
Far better to base investment decisions on hard facts rather than stock market predictions
Costco’s membership fees and low prices make it a strong growth stock. We look at whether it can sustain growth against fierce competition
Vanguard EFT
We recommend that investors diversify up to 30% of their portfolios into U.S. stocks and as much as 10% into international securities. One attractive way for safety-conscious investors to do this is with exchange-traded funds (ETFs). Today we look at several ETFs from a U.S. firm that offer a low-fee way to achieve this diversification. We profile two Vanguard ETFs that track a U.S. large-cap index and an emerging market index.

Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. In all, it administers almost $3 trillion U.S. in 170 mutual funds.

Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions. For that matter, some Canadian funds aren’t available in all provinces.

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Bank of Montreal
Today, we look at a Canadian bank stock that has consistently paid dividends for 186 years. Bank of Montreal has benefited both from expansion outside of Canada and low interest rates in recent years. The bank continues to make acquisitions in the U.S. and the U.K. Recently it agreed to buy General Electric’s transportation-financing business, adding $11.5 billion in assets. Low interest rates have also helped the bank by increasing demand for loans. Between 2010 and 2014, the bank’s earnings rose by more than 50% and over the past three years, BMO has raised its dividend six times. We recommend BMO as a blue chip stock to buy for conservative investors.

BANK OF MONTREAL (Toronto symbol BMO; www.bmo.com) is Canada’s fourth-largestbank, with $672.4 billion of assets.

The bank has steadily expanded beyond Canadain recent years. For example, in 2011, it acquiredWisconsin-based banking firm Marshall & Ilsley for$4.0 billion in stock. That more than doubled thenumber of branches Bank of Montreal operates inthe U.S. and added two million customers.

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One of the great investing rules to live by comes from poker: if you can’t spot the sucker, it’s probably you