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
BANK OF NOVA SCOTIA $61 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $73.2 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.scotiabank.com) has extended its Scene loyalty card program with Cineplex Entertainment (Toronto symbol CGX) for an additional 10 years, to October 31, 2025....
MANITOBA TELECOM SERVICES INC. $29 (Toronto symbol MBT; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 78.9 million; Market cap: $2.3 billion; Price-to-sales ratio: 1.4; Dividend yield: 4.5%; TSINetwork Rating: Average; www.mtsallstream.com) has expanded its recent restructuring plan, under which it is cutting 25% of its Allstream subsidiary’s workforce and lowering this business’s capital spending by 20% to 30%....
MAPLE LEAF FOODS INC. $21 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 136.6 million; Market cap: $2.9 billion; Price-to-sales ratio: 0.9; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) will soon complete a multi-year restructuring that mainly involves closing older meat-processing plants and shifting their operations to newer facilities....
FORTIS INC. $38 (www.fortisinc.com) paid $4.5 billion for UNS Energy in August 2014. This business operates power plants and distributes electricity and gas to 658,000 clients in Arizona. In the three months ended September 30, 2015, UNS increased Fortis’s earnings by 116.4%, to $145 million from $67 million a year earlier....
NVIDIA CORP. $21 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 543.5 million; Market cap: $11.4 billion; Price-to- sales ratio: 2.6; Dividend yield: 1.6%; TSINetwork Rating: Average; www.nvidia.com) is a leading designer of 3D-capable video chips, which make video games run more smoothly and appear more lifelike. The company outsources most of its production to Asian chipmakers.

In its fiscal 2015 third quarter, which ended October 26, 2014, Nvidia’s revenue rose 16.3%, to a record $1.2 billion from $1.1 billion a year earlier. Earnings jumped 43.3%, to $220.4 million from $153.8 million. The company spent $810.0 million on share buybacks in the past nine months. As a result, its earnings per share rose 50.0%, to $0.39 from $0.26.

Nvidia spends around 30% of its revenue on research, which is helping it expand into new areas, particularly chips for mobile devices. Its new Tegra chips now power Google’s new Nexus 9 tablet and Chromebook laptop computer. The company also recently launched its own tablet, called Shield, specifically for video game enthusiasts.

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KRAFT HEINZ CO. $75 (www.kraftheinzcompany.com) earned $0.44 a share in the third quarter of 2015, down 4.3% from $0.46 a year earlier. Sales fell 9.0%, to $6.4 billion from $7.0 billion. If you exclude exchange rates and businesses it sold since the July 2015 merger of Kraft Foods Group and H.J....
BUCKEYE PARTNERS L.P. $67 (www.buckeye.com) is seeing strong demand for its oil-storage terminals as many producers store their crude instead of selling it at today’s depressed prices. However, lower prices are hurting revenue at Buckeye’s wholesaling business, which sells refined fuels, such as gasoline, home heating oil and propane....
UNITED TECHNOLOGIES CORP. $97 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 887.0 million; Market cap: $86.0 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.utc.com) has four main businesses: Climate, Controls & Security (30% of revenue, 32% of earnings) makes heating and air conditioning equipment under the Carrier brand, as well as burglar alarms and fire-safety products; Aerospace Systems (25%, 24%) makes enginecontrol systems and other parts for aircraft; Pratt & Whitney (23%, 17%) manufactures aircraft engines; and Otis (22%, 27%) makes elevators.

Major takeover paid off

The company’s revenue rose 7.1%, from $54.3 billion in 2010 to $58.2 billion in 2011. In 2012, it paid $18.3 billion for North Carolina-based Goodrich Corp., which makes aircraft parts (such as landing gear, wheels and brakes) and maintains and fixes planes. However, it also sold smaller businesses, so its revenue fell 0.8%, to $57.7 billion, in 2012.

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DIEBOLD INC. $34 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 65.0 million; Market cap: $2.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.4%; TSINetwork Rating: Average; www.diebold.com) is buying German ATM maker Wincor Nixdorf AG for $1.8 billion (80% in cash and 20% in stock).

The combined firm will be the world’s largest maker of ATMs, with 35% of the market and $5.2 billion in annual revenue. Diebold aims to close the deal in mid-2016.

The company plans to borrow $2.8 billion to pay for Wincor, which will increase its total debt to around $3.5 billion. However, it should save $160 million a year by eliminating overlapping operations, which will help it pay down this debt. It will also cut its dividend rate by 67%, from $1.15 to $0.38, which would yield 1.1%.

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