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.

DOMINO’S PIZZA $111.62 (New York symbol DPZ; TSINetwork Rating: Average)(734-930-3008; www.dominos.com; Shares outstanding: 54.9 million; Market cap: $6.1 billion; Dividend yield: 1.1%) is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 11,700 outlets in the U.S. and 75 other countries. Franchisees run most of these stores.

In the three months ended June 14, 2015, the company’s earnings per share jumped 20.9%, to $0.81 from $0.67 a year earlier.

Sales gained 8.5%, to $488.6 million from $450.5 million. Same-store sales rose 6.7% internationally, but more important, they increased 12.8% in the U.S., home to most of the company’s stores.

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WESTJET $24.77 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493- 7853; www.westjet.com; Shares outstanding: 125.8 million; Market cap: $3.0 billion; Div. yield: 2.3%) recently took delivery of the first of its four Boeing 767 extended-range wide-body aircraft.

Over the next several months, this new plane will fly between Toronto and Calgary; the other three aircraft will arrive separately over the next eight months. The next two 767s will fly from Alberta to Hawaii and between Toronto and Montego Bay, Jamaica, beginning in December 2015.

The fourth and final aircraft, which features 262 seats and an 11-hour range, will arrive next spring to launch WestJet’s new service to London, England, in May 2016.

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REITMANS (CANADA) LTD. $4.62 (Toronto symbol RET.A; TSINetwork Rating: Extra Risk) (514-384- 1140; www.reitmans.com; Shares outstanding: 64.6 million; Market cap: $303.1 million; Dividend yield: 4.3%) owns 794 women’s clothing stores across Canada.

The chain consists of 333 Reitmans, 135 Penningtons, 107 Addition Elle, 80 RW & Co., 69 Thyme Maternity and 70 Smart Set outlets. It also has 21 Thyme Maternity boutiques in Canadian Babies “R” Us stores.

In the three months ended August 1, 2015, Reitmans’ sales fell 2.1%, to $253.0 million from $258.3 million a year earlier. That’s because the company closed 51 less profitable locations. Same-store sales gained 1.7%, with brick-and-mortar stores decreasing 0.6% and e-commerce jumping 70.1%.

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LEON’S FURNITURE LTD. $14.00 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 71.2 million; Market cap: $996.6 million; Dividend yield: 2.9%) has steadily opened new stores, growing from 27 in 2003 to 80 today.

However, the company more than quadrupled in size overnight with its March 2013 purchase of its main rival, The Brick, for $700 million. The Brick has 223 locations across Canada; the chains continue to operate separately.

In the three months ended June 30, 2015, the company’s sales rose 2.1%, to $484.3 million from $474.5 million a year earlier. On a same-store basis, sales gained 1.7%.

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ALIMENTATION COUCHETARD $60.49 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 567.4 million; Market cap: $34.1 billion; Dividend yield: 0.4%) is at new all-time highs after reporting improved profits in the latest quarter.

In the three months ended July 19, 2015, Couche-Tard’s sales fell 2.2%, to $8.98 billion from $9.19 billion a year earlier (all figures except share price and market cap in U.S. dollars).

The fall came from lower gasoline prices, while the higher U.S. dollar cut the contribution from its European operations. That was partly offset by a full quarter of sales from The Pantry, which Couche-Tard bought for $1.7 billion on March 16, 2015.

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MENTOR GRAPHICS CORP. $25.25 (Nasdaq symbol MENT; TSINetwork Rating: Extra Risk) (503-685-7000; www.mentor.com; Shares outstanding: 116.3 million; Market cap: $3.0 billion; Dividend yield: 0.9%) makes systems that improve the design of electronic products and speed up their development. Its products are used in a range of industries.

As an example, Mentor’s software lets automotive component and chip makers use less wiring, identify potential safety and security issues and minimize electromagnetic effects on sensitive modules. The auto business is one of the company’s biggest growth areas because it’s quickly shifting from mechanical to electronic systems: electronics now make up roughly 40% of a car’s cost.

Whether or not regulators ever approve a true driverless car, research on those vehicles is rapidly accelerating advanced driver assistance systems, such as collision avoidance; infotainment, including GPS; and connectivity apps that record data about a car’s performance, sync with smartphones and notify emergency services.

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BMO dividend fund

Today, we look at a hedged ETF, a BMO dividend fund that Pat McKeough was asked to evaluate by a Member of his Inner Circle....
Penny stock Semafo aims to multiply its gold production with a big West African acquisition—and we assess the opportunities and risks
Selling software to call centres has made Enghouse Systems a rising growth stock, but we see plenty of risk in its flurry of acquisitions.