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
MONDELEZ INTERNATIONAL INC. $40 (Nasdaq symbol MDLZ; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $64.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.mondelezinternational.com) makes cookies and biscuits (Oreo, Chips Ahoy, Ritz), chocolate bars (Cadbury, Toblerone) and gum and candy (Trident, Chiclets and Halls cough drops).

In May 2014, the company agreed to merge its packaged coffee business with European coffee maker D.E. Master Blenders. Under the deal, Mondelez will contribute its coffee brands, including Jacobs, Gevalia and Tassimo, to a new firm called Jacobs Douwe Egberts. It will get about $4.5 billion in cash and 49% of the new company in return.

Mondelez aims to close the deal by the end of 2015. It will use the cash to buy back shares and pay down its $12.8-billion long-term debt, or 20% of its market cap.

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WAL-MART STORES INC. $75 (New York symbol WMT; Conservative Growth Portfolio: Consumer sector; Shares outstanding: 3.2 billion; Market cap: $240.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.walmart .com) aims to spur its online sales with a new plan called ShippingPass that offers U.S. shoppers unlimited threeday shipping for $50 a year. This should help it compete with Amazon’s Prime service, which offers two-day shipping for an annual fee of $99.

Thanks to investments like this, Wal-Mart’s online sales jumped 17% in the first quarter of its 2016 fiscal year, which ended April 30, 2015.

Wal-Mart is also starting to see the benefits of its efforts to improve sales at its U.S. stores, including speeding up checkout lines and opening smaller stores. Same-stores sales in the U.S. (62% of total sales) rose 1.1%, the third straight quarter of growth.

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GOOGLE INC. (Nasdaq symbols GOOG $540 [class C: nonvoting] and GOOGL $554 [class A: one vote per share]; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 682.4 million; Market cap: $368.8 billion; Priceto- sales ratio: 5.4; No dividends paid; TSINetwork Rating: Above Average; www.google.com) controls about two-thirds of the global Internet search market, mainly because its innovative technology helps users quickly find the information they’re seeking. The U.S. supplies 43% of the company’s revenue.

Google gets 90% of its revenue by selling advertising on its websites. It mainly does this through its AdWords program. Using AdWords, advertisers bid on certain search words or phrases. The company then charges advertisers when users click on their ads.

In addition to search, Google offers other free services and soft- ware, including Gmail (email), YouTube (videos), Google+ (social networking), Chrome (a web browser) and Android (mobile phone software). These services draw more users to Google’s sites, which lets it sell more ads and charge higher ad rates.

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A high dividend yield can signal risk, as with Ares Capital and its high-risk loans funded with shadowy methods like mezzanine debt.
Stock Investing
Anthia Cumming
Pat McKeough responds to many requests from members of his Inner Circle. Every week, his comments on the most intriguing questions of the past week go out to all Inner Circle members. Each week, we offer you a highlight from these Q&A sessions.

Q: Pat: What is your opinion of Unilever going forward? Thank you.

A: Unilever plc (ADR) (symbol UL on New York; www.unilever.com) is one of the world’s largest makers of consumer goods. Asia and Africa supply 43% of its sales, followed by the Americas (33%) and Europe (24%). The company gets 59% of its sales from emerging markets.

Unilever operates through four divisions:

  • Personal Care (37% of sales) makes skin and hair care products, deodorants and oral care goods. Top brands include Dove and Lux (soap), Sunsilk (shampoo), Axe (deodorant), Pond’s (skin cream), Vaseline (petroleum jelly) and Close Up (toothpaste).
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Worrying about things that are out of your control can lead to untimely buy or sell decisions that seriously reduce your long-term profits.
Meta Description: Exchange-traded funds (ETFs) give investors a low-fee way to match market indexes, and these two ETFs are the cream of the Canadian crop.
Stock Investing
We believe most investors could benefit from holding some foreign investments in their portfolios for added diversification. Still, investing internationally remains riskier than investing in North America. With stocks markets around the globe, you may face language barriers, uncertain investor-protection laws, and in some cases a less pronounced commitment to openness, fairness and other qualities we tend to take for granted in established markets. One of the best ways to make it easier to profit on foreign markets is with American Depositary Receipts (ADRs). An American Depositary Receipt is an investment unit for foreign companies that trade on a U.S. stock market. These units can represent fractions of shares, whole shares, or multiple shares in the foreign company. ADRs can help you simplify your international investing by letting you buy foreign shares on U.S. exchanges without the complications of buying or selling on a foreign exchange, in a foreign currency....