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.

TEMPUR SEALY $78.04 (New York symbol TPX; TSINetwork Rating: Speculative) (800-878-8889; www.tempursealy.com; Shares outstanding: 61.9 million; Market cap: $4.8 billion; No dividends paid) has been forced to make changes to its management and board of directors after activist investor H Partners Management, which holds 10% of Tempur Sealy’s shares, won the support of enough investors at the company’s May 8, 2015, annual meeting.

H Partners believes Tempur Sealy has performed poorly compared to other mattress makers since it acquired rival Sealy in March 2013.

After the meeting, chief executive officer Marc Sarvaray, chairman P. Andrews McLane and board director Christopher Mastro resigned. H Partners executive Usman Nabi took Mastro’s spot on the board. Timothy Yaggi, Tempur Sealy’s current chief operating officer, became interim CEO as a search committee made up of Nabi and three independent directors looks for a replacement for Sarvaray. Board member Frank Doyle became chairman.

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AIMIA INC. $12.27 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-897-6800; www.aimia.com; Shares outstanding: 160.8 million; Market cap: $2.0 billion; Dividend yield: 6.2%) has announced that its members can now earn and redeem points for travel on Brazilian airline Avianca. This brings Aeroplan’s total number of airline partners to 34.

Avianca offers 200 daily flights to 23 cities throughout Brazil, operating from its main hub at São Paulo-Guarulhos International Airport.

Aimia is a buy.

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AGT FOOD & INGREDIENTS $29.79 (Toronto symbol AGT; TSINetwork Rating: Extra Risk) (306-525-4490; www.alliancegrain.com; Shares outstanding: 23.1 million; Market cap: $684.0 million; Dividend yield: 2.0%) earned $0.44 a share in the three months ended June 30, 2015, up 2.3% from $0.43 a year earlier.

Revenue gained 5.1%, to $378.2 million from $359.8 million. The gains came from recent acquisitions and higher processing activity.

AGT continues to benefit from its plan to focus on more-profitable products, such as ingredients and packaged foods, as opposed to simply cleaning, splitting and bagging bulk crops. Food makers use these ingredients in products such as baked goods, soups and beverages, as well as pet food and animal feed.

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CHEMTRADE LOGISTICS INCOME FUND $18.83 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics.com; Units outstanding: 69.0 million; Market cap: $1.3 billion; Dividend yield: 6.3%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base metal processors, whose operations create sulphur, acid and other by-products. Chemtrade converts these substances into useful chemicals, like sulphuric acid.

In the three months ended June 30, 2015, Chemtrade’s revenue rose 9.3%, to $338.8 million from $310.1 million a year earlier. The gain mainly came from the higher U.S. dollar, which increased the contribution from its operations in that country.

The trust’s overall cash flow rose 5.3%, to $47.0 million from $44.6 million, but cash flow per share declined 8.1%, to $0.68 from $0.74, on more shares outstanding.

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INTACT FINANCIAL $92.22 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $12.2 billion; Dividend yield: 2.3%) is Canada’s largest provider of property and casualty insurance. Its brands include Intact Insurance, Canada BrokerLink and belairdirect.

In the three months ended June 30, 2015, Intact’s revenue rose 6.0%, to $2.34 billion from $2.21 billion a year earlier. Revenue improved across all of the company’s insurance lines and geographic regions. Its $197-million acquisition of Canadian Direct Insurance in early 2015 also added to its sales. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C.

Earnings rose 1.9%, to $210 million, or $1.56 a share, from $206 million, or $1.53. Intact continues to write more-profitable insurance policies and cut its operating costs.

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RESTAURANT BRANDS INTERNATIONAL $42.61 (New York symbol QSR; TSINetwork Rating: Average) (905-845-6511; www.rbi.com; Shares outstanding: 467.0 million; Market cap: $19.9 billion; Dividend yield: 1.1%) is the world’s thirdlargest fast-food operator, after McDonald’s and Yum Brands, with 14,528 Burger King outlets and 4,776 Tim Hortons locations.

In the three months ended June 30, 2015, the company earned $142.7 million, up 27.3% from $112.1 million a year earlier.

Earnings per share gained 25.0%, to $0.30 from $0.24, on more shares outstanding. Overall sales fell 1.6%, to $1.04 billion from $1.06 billion. That’s because the high U.S. dollar hurt the contribution from Restaurant Brands’ overseas operations.

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ATLANTIC TELE-NETWORK $74.34 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 16.0 million; Market cap: $1.2 billion; Dividend yield: 1.6%) owns wireless and wireline (traditional telephone and Internet) operations in the U.S. Southwest, New England, New York State, Guyana, Bermuda and parts of the Caribbean islands.

The company continues to expand its wireless capacity and coverage. That’s paying off as customers use more mobile data for services like music downloads, mobile gaming and e-books.

As well, earlier this year, Atlantic entered the solar energy market by acquiring 28 solar farms in Massachusetts, California and New Jersey. The company paid $103 million for these assets ($64 million in cash and the assumption of $39 million of debt).

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GOODYEAR TIRE & RUBBER CO. $32.22 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 269.6 million; Market cap: $8.8 billion; Dividend yield: 0.7%) is the world’s largest tire maker, with 50 plants in 22 countries.

In the three months ended June 30, 2015, Goodyear’s revenue fell 10.4%, to $4.17 billion from $4.66 billion a year earlier. The rising U.S. dollar cut the contribution from the company’s foreign sales (particularly in Europe and Brazil) by $401 million.

Excluding one-time items, earnings rose 1.8%, to $229.0 million, or $0.84 a share, well ahead of the consensus estimate of $0.74. A year earlier, the company earned $225.0 million, or $0.80 a share.

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CHESAPEAKE ENERGY $7.34 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chk.com; Shares outstanding: 665.1 million; Market cap: $5.2 billion; No dividends paid) has eliminated its dividend to conserve cash in the face of low oil and gas prices. The company had been paying a quarterly dividend of $0.0875 a share. The cut will save it $240 million a year.

As well, Chesapeake will spend $3.5 billion to $4.0 billion on exploration and development in 2015, down from its earlier estimate of $4.0 billion to $5.0 billion. It spent $5.8 billion in 2014.

The stock now trades at just 1.3 times the company’s annual cash flow of $5.52 a share, based on the latest quarter.

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