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.

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If you want to find out how to hire a stock broker who meets your needs, you need to watch out above all for conflicts of interest
NORDSTROM INC. $74 (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 191.0 million; Market cap: $14.1 billion; Price-to-sales ratio: 1.0; Dividend yield: 2.0%; TSINetwork Rating: Average; www.nordstrom.com) first expanded to Canada in 2014, when it opened a department store in Calgary. It recently opened a second location in Ottawa.

The company now plans to open four more Canadian stores in the next two years: three in Toronto and one in Vancouver. Meanwhile, it continues to add Nordstrom Rack stores, which sell off-price goods, and expand its e-commerce business.

These developments helped boost Nordstrom’s sales by 9.7% in the three months ended May 2, 2015, to $3.2 billion from $2.9 billion a year earlier. Same-store sales gained 4.4%. However, the extra costs to open and run the new stores cut the company’s earnings per share by 8.3%, to $0.66 from $0.72.

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SNAP-ON INC. $158 (New York symbol SNA; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 58.1 million; Market cap: $9.2 billion; Price-to-sales ratio: 2.6; Dividend yield: 1.3%; TSINetwork Rating: Average; www.snapon.com) makes tools for auto mechanics and sells them through a fleet of franchised vans that visit garages. It also makes specialized tools for industrial customers.

The company continues to benefit as the improving economy gives mechanics more cash to spend on tools. Its sales rose 5.1% in the quarter ended April 4, 2015, to $827.8 million from $787.5 million a year earlier. Without the impact of exchange rates and acquisitions, sales gained 9.9%. Earnings per share rose 15.4%, to $1.87 from $1.62.

The stock hit a record high of $158 in May 2015. It now trades at 19.8 times the $7.98 a share Snap-On will likely earn this year. That’s a somewhat high p/e ratio for a company that serves the cyclical automotive industry. The $2.12 dividend yields 1.3%.

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STANLEY BLACK & DECKER INC. $103 (New York symbol SWK; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 153.7 million; Market cap: $15.8 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.0%; TSINetwork Rating: Average; www.stanleyblack anddecker.com) is one of the world’s largest makers of hand and power tools for consumers. Its top-selling brands include Stanley, Black & Decker, FatMax and Powerlock. This business supplies 62% of the company’s sales.

Stanley also makes building-security products, such as locks and gates (19% of sales) and specialized tools for industrial users, including auto mechanics and construction firms (19%).

The company has a long history of using acquisitions to diversify its operations. Since 2002, it has spent $6.2 billion buying related firms, excluding its March 2010 purchase of rival toolmaker Black & Decker for $4.5 billion in stock.

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RESTAURANT BRANDS INTERNATIONAL INC. $39 (New York symbol QSR, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 467.0 million; Market cap: $18.2 billion; Price-to-sales ratio: n.a.; Dividend yield: 1.0%; TSINetwork Rating: Average; www.rbi.com) took its current form on December 12, 2014, after Burger King Worldwide (old symbol BKW) acquired Tim Hortons (old symbol THI).

The company is the world’s third-largest fast-food operator, after McDonald’s and Yum Brands, with 14,387 Burger King outlets and 4,724 Tim Hortons locations in 100 countries. Franchisees own and operate all of these restaurants.

If you assume the takeover occurred at the start of 2014, Restaurant Brands cut its loss to $8.1 million, or $0.04 a share, in the three months ended March 31, 2015, from $226.5 million, or $1.12, a year earlier.

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HEWLETT-PACKARD CO. $34 (New York symbol HPQ; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $61.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.9%; TSINetwork Rating: Average; www.hp.com) is selling 51% of its data-networking equipment and server business in China. Demand for these products has suffered on fears that the U.S. government is using them to collect data on Chinese companies. Hewlett will receive $2.3 billion when it completes the sale by the end of 2015.

Meanwhile, its earnings fell 5.6% in the quarter ended April 30, 2015, to $1.6 billion from $1.7 billion a year earlier. Earnings per share declined 1.1%, to $0.87 from $0.88, on fewer shares outstanding. Revenue fell 6.8%, to $25.5 billion from $27.3 billion.

The company still plans to split into two firms in November 2015: Hewlett-Packard Enterprise will sell computing products, like servers and analytics software, to businesses and governments, while HP Inc. will focus on personal computers and printers. Hewlett expects breakup-related costs of $400 million to $450 million.

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YUM! BRANDS INC. $92 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 432.4 million; Market cap: $39.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.yum.com) aims to spur sales at its U.S. KFC restaurants with several new initiatives, including upgrading stores and launching new menu items. The company also plans a new series of TV and online ads featuring an actor playing Colonel Harland Sanders, the late founder of Kentucky Fried Chicken.

The stock is up 26% since the start of 2015, partly due to speculation that Yum may spin off its KFC and Pizza Hut chains in China, which account for half of its revenue. Food-safety concerns and strong competition from other fast-food restaurants have hurt Yum’s Chinese operations in the past two years.

Yum Brands is still a hold.

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CAMPBELL SOUP CO. $48 (New York symbol CPB; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 311.8 million; Market cap: $15.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.campbellsoupcompany.com) is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices.

To cut its reliance on canned foods, Campbell is expanding its fresh-food businesses. In 2013, it paid $1.55 billion for Bolthouse Farms, a producer of carrots, dressings and fruit juices. It also acquired leading organic food producer Plum for $249 million.

At the same time, Campbell is cutting costs by eliminating management positions and merging overlapping functions at its divisions. The company expects these moves to save it $200 million a year starting in fiscal 2016.

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CONAGRA FOODS INC. $39 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 427.1 million; Market cap: $16.7 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.conagrafoods .com) makes packaged foods, including Chef Boyardee canned pasta, Hunt’s tomato sauce, Peter Pan peanut butter, Orville Redenbacher popcorn and Reddiwip whipped cream.

Consumers supply 70% of ConAgra’s sales. Businesses, including restaurants and other food makers, provide the remaining 30%.

In January 2013, the company bought Ralcorp Holdings, the largest private-label food maker in the U.S., for $4.75 billion.

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GENERAL MILLS INC. $56 (New York symbol GIS, Conservative Growth Portfolio, Consumer sector; Shares outstanding: 596.1 million; Market cap: $33.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.generalmills.com) is one of the world’s largest food makers. Its top brands include Big G (cereal), Green Giant (canned and frozen vegetables), Pillsbury (baking dough), Old El Paso (tacos), Progresso (soups and salads) and Yoplait (yogourt).

In its fiscal 2015 third quarter, which ended February 22, 2015, General Mills earned $343.2 million, down 16.4% from $410.6 million a year earlier. Earnings per share declined 12.5%, to $0.56 from $0.64, on fewer shares outstanding.

Without unusual items, such as gains and losses on hedging contracts General Mills uses to lock in certain ingredient prices, earnings per share gained 12.9%, to $0.70 from $0.62.

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