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
TD BANK $54.90 (Toronto symbol TD; Shares outstanding: 1.8 billion; Market cap: $100.5 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.td.com) is Canada’s largest bank, with $1.03 trillion of assets. It also operates more branches in the U.S. than Canada (1,302 vs. 1,165) and owns 40.72% of TD Ameritrade (New York symbol AMTD), a leading online brokerage.

Excluding one-time items, TD’s earnings per share rose 4.6% in its fiscal second quarter ended April 30, 2015, to $1.14 from $1.09 a year earlier. Revenue gained 4.4%, to $7.8 billion from $7.4 billion, as low interest rates continue to spur loan demand.

The bank’s loan-loss provisions fell 4.3%, to $375 million from $392 million, because more U.S. credit card customers are repaying their loans on time.

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TORSTAR $6.12 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $492.2 million; TSINetwork Rating: Average; Dividend yield: 8.6%; www.torstar.com) reported revenue of $192.3 million in the three months ended March 31, 2015. That was down 9.0% from $211.3 million a year earlier, mainly due to to lower ad revenue across its newspapers.

However, cost cutting, including layoffs, kept its per-share earnings unchanged at $0.02, before one-time items.

The company plans to launch a digital version of The Toronto Star for tablet computers in the fall of 2015. That should help it attract younger readers and spur online ad sales.

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LOBLAW COMPANIES $64.10 (Toronto symbol L; Shares outstanding: 412.6 million; Market cap: $26.0 billion; TSINetwork Rating: Above Average; Dividend yield: 1.6%; www.loblaw.ca) saw its sales jump 37.8% in the three months ended March 28, 2015, to $10.0 billion from $7.3 billion a year earlier.

Shoppers Drug Mart contributed $2.6 billion to the latest quarterly sales. Even so, same-store sales at Loblaw’s supermarkets rose 4.0%, while Shoppers’ same-store sales gained 3.1%.

Earnings per share rose 35.2%, to $0.73 from $0.54, mostly due to successful cost cutting. The strong earnings prompted Loblaw to raise its dividend by 2.0%. The new rate yields 1.6%.

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ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $18.22 (New York symbol ESR; buy or sell through brokers) has 66.4% of its assets invested in Russia, followed by Poland at 26.2%; Hungary, 3.7%; and the Czech Republic, 3.1%.

The fund’s top holdings are Gazprom (Russia: gas utility), 13.4%; Lukoil (Russia: oil), 10.2%; Magnit PJSC (Russia: retailing), 5.7%; MMC Norilsk Nickel (Russia: mining), 4.2%; Sberbank (Russia: bank), 4.0%; and Novatek (Russia: natural gas), 4.0%. The iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.67%.

The fund’s concentration in Russia adds considerable risk. The country’s currency, the ruble, is near record lows against the U.S. dollar. This comes in the wake of falling oil prices, Western sanctions after Russia’s takeover of Crimea and the country’s continued threats against the rest of Ukraine.

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ISHARES MSCI BRAZIL INDEX FUND $33.27 (New York symbol EWZ; buy or sell through brokers) is an ETF that’s designed to track the Brazilian stock market.

Its top holdings are Cia Itau Unibanco Holding (banking), 9.6%; AmBev SA (beer and beverages), 8.8%; Petrobras (oil and gas), 8.7%; Banco Brandesco SA, 7.1%; Vale do Rio Doce (mining), 5.3%; BRF SA (food), 4.2%; and Cielo SA (payment processing), 3.8%.

The ETF was launched on July 10, 2000. It has a 0.62% expense ratio.

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ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $40.22 (New York symbol ECH; buy or sell through brokers) is an ETF that aims to track the MSCI Chile Investable Market Index, which consists of stocks that mainly trade on the Santiago Stock Exchange.

The fund’s top holdings are S.A.C.I. Falabella (retail), 10.9%; Enersis SA (electricity), 9.9%; Empresas Copec SA (conglomerate), 7.6%; Empresa Nacional de Electricidad (electricity), 7.1%; Banco Santander Chile (banking), 5.0%; Empresas CMPC (pulp and paper), 4.9%; Cencosud SA (retailer), 4.6%; Banco de Chile, 4.5%; Colbun SA (utility), 4.1%; and LATAM Airlines, 3.9%.

The fund’s industry breakdown consists of Utilities, 28.6%; Financials, 18.0%; Consumer Discretionary, 12.9%; Materials, 11.0%; Consumer Staples, 9.3%; Energy, 8.0%; Industrials, 7.0%; Telecommunications, 2.3%; and Information Technology, 2.2%.

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ISHARES MSCI GERMANY FUND $29.74 (New York symbol EWG; buy or sell through brokers) tracks the stocks in the MSCI Germany Index.

This index aims to replicate 85% of the market capitalization of the German stock market. The remaining 15% is unavailable for investment, partly due to limitations on foreign ownership.

The ETF’s top holdings are Bayer (diversified chemicals), 9.8%; Daimler (autos), 7.5%; BASF (chemicals), 7.1%; Siemens (engineering conglomerate), 6.9%; SAP (software), 6.1%; Allianz (insurance), 6.0%; Deutsche Telekom, 4.5%; Deutsche Bank AG, 3.5%; Volkswagen AG, 3.3%; and BMW AG, 3.1%.

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ISHARES MSCI SOUTH KOREA INDEX FUND $56.70 (New York symbol EWY; buy or sell through brokers) aims to track the MSCI Korea Index.

The ETF’s top holdings are Samsung Electronics, 19.8%; SK Hynix Semiconductor, 4.6%; Hyundai Motor, 3.9%; Shinhan Financial, 2.8%; Naver (Internet), 2.7%; Posco (steel), 2.5%; KB Financial, 2.5%; Hyundai Mobis (auto parts), 2.4%; AmorePacifi

c (cosmetics), 2.0%; and Kia Motors, 2.0%. The fund’s industry breakdown is as follows: Information Technology, 36.1%; Consumer Discretionary, 15.7%; Financials, 14.0%; Industrials, 11.6%; Materials, 7.8%; Consumer Staples, 7.6%; Utilities, 2.1%; Energy, 1.8%; Telecommunication Services, 1.2%; and Health Care, 1.0%.

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ISHARES MSCI EMERGING MARKETS INDEX FUND $40.91 (New York symbol EEM; buy or sell through brokers) aims to track the MSCI Emerging Markets Index. The fund’s geographic breakdown includes China, 24.8%; South Korea, 14.6%; Taiwan, 12.9%; South Africa, 7.4%; Brazil, 7.2%; India, 7.0%; Mexico, 4.6%; Russia, 3.9%; Malaysia, 3.3%; Indonesia, 2.5%; Thailand, 2.1%; and Turkey, 1.5%.

Its top holdings are Samsung Electronics (South Korea), 3.2%; Taiwan Semiconductor (computer chips), 2.9%; Tencent Holdings (China: Internet), 2.6%; China Mobile, 2.0%; China Construction Bank, 1.8%; Industrial & Commercial Bank of China, 1.6%; Naspers (South Africa: media and Internet), 1.4%; Hon Hai Precision Industry (Taiwan), 1.0%; and Ping An Insurance of China, 1.0%.

Its industry breakdown includes Financials, 28.1%; Information Technology, 19.0%; Consumer Discretionary, 9.3%; Consumer Staples, 8.0%; Energy, 7.8%; Telecommunication Services, 7.3%; Materials, 7.0%; and Industrials, 6.8%.

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