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
Stock Investing
Every Monday we feature “A Stock to Sell” as our daily post. With every stock or investment we recommend as a sell, we give you a full explanation of why we advise against investing in it at this time.

SolarCity Corp. (symbol SCTY on Nasdaq; www.solarcity.com) provides rooftop solar systems for homeowners, businesses, schools and government agencies in the U.S.

The company creates a customized energy plan for each customer, then sells, finances, engineers, installs, monitors and maintains the system. Customers can “sell” any electricity they don’t use onto the power grid for credits they can use to “buy” electricity at night.

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Stock Investing
Pat McKeough responds to many requests from members of his Inner Circle for specific stock advice as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions.

Q: Pat: Could you give an update on Northland Power?

A: Northland Power Inc. (symbol NPI on; www.northlandpower.ca) develops, builds, owns and operates natural-gas-fired power plants, wind farms, solar projects and hydroelectric facilities. The company converted to a corporation from an income trust on January 1, 2011.

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ATLANTIC TELE-NETWORK $70.10 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 15.9 million; Market cap: $1.1 billion; Dividend yield: 1.7%) owns wireless and wireline telecom operations in the U.S. Southwest, New England, New York State, Guyana, Bermuda and parts of the Caribbean islands.

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

Big departure from telecom

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MENTOR GRAPHICS CORP. $24.33 (Nasdaq symbol MENT; TSINetwork Rating: Extra Risk) (503- 685-7000; www.mentor.com; Shares outstanding: 116.1 million; Market cap: $2.9 billion; Dividend yield: 0.9%) makes hardware and software for improving the design of electronic products and speeding up their development.

For example, Mentor’s software lets automakers use less wiring in a car, identify potential safety issues and minimize electromagnetic effects on sensitive components.

In the quarter ended January 31, 2015, Mentor’s revenue rose 9.5%, to $439.1 million from $401.0 million a year earlier. Excluding one-time items, earnings per share gained 18.5%, to $1.09 from $0.92.

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DOREL INDUSTRIES $35.02 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.1 billion; Dividend yield: 4.3%) (All amounts except share price and market cap in U.S. dollars) makes a number of items, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and sporting goods, mainly bicycles.

In the three months ended December 31, 2014, Dorel’s sales rose 10.7%, to $701.6 million from $633.5 million a year earlier. Sales rose 6.0% at the sports segment and 13.5% at the juvenile products division. Home furnishing sales gained 14.2%.

Excluding one-time items, earnings fell 9.1%, to $11.0 million, or $0.34 share, from $12.1 million, or $0.38. The high U.S. dollar made the company’s international sales less profitable.

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HECLA MINING COMPANY $3.33 (New York symbol HL; TSINetwork Rating: Extra Risk) (208-769- 4100; www.hecla-mining.com; Shares outstanding: 369.4 million; Market cap: $1.2 billion) explores for, mines and processes silver and gold in the U.S. and Mexico.

Recently, the company agreed to buy Revett Mining Company (symbol RVM on New York) for $20 million in Hecla shares.

Hecla will keep moving ahead with permitting on Revett Mining’s Rock Creek project in northwestern Montana.

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TEMPUR SEALY $58.80 (New York symbol TPX; TSINetwork Rating: Speculative)(800-878-8889; www.tempursealy.com; Shares outstanding: 61.0 million; Market cap: $3.5 billion; No dividends paid) continues to fend off attempts by activist investor H Partners Management to replace the company’s CEO.

H Partners, which owns 10% of Tempur Sealy’s shares, is best known for taking part in the turnaround of theme-park operator Six Flags Entertainment between 2010 and 2013. H Partners believes Tempur Sealy has performed poorly compared to other mattress makers since its 2013 purchase of Sealy Corp.

Whatever the outcome of H Partners’ investment, the activist investor’s involvement should draw attention to Tempur Sealy’s growth prospects.

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RESTAURANT BRANDS INTERNATIONAL $38.99 (New York symbol QSR; TSINetwork Rating: Average) (212-333-3810; www.rbi.com; Shares outstanding: 467.0 million; Market cap: $18.2 billion; Dividend yield: 0.2%) is testing a new premium coffee blend, called Three Peaks Colombian, at five of its Tim Hortons outlets in Ontario, New Brunswick and Quebec.

This coffee comes from Colombia’s Cauca mountain region, where volcanic ash in the soil gives it what Tim Hortons describes as “a hint of caramel and a smooth finish.”

The chain will sell the new brew for 15% more than its current coffees. Right now, Tim Hortons makes its coffee from a blend of various beans from sources in different countries. This helps offset varying growing seasons, as well as local droughts and other supply disruptions.

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CHIPOTLE MEXICAN GRILL $677.60 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.0 million; Market cap: $21.1 billion; No dividends paid) offers only naturally raised meat that comes from animals that are raised humanely, never given antibiotics or hormones and fed a pure vegetarian diet.

Chipotle had a total of 1,783 outlets at the end of 2014 and plans to add 190 to 205 more this year. However, its strict adherence to its food standards could make continued expansion increasingly difficult.

That’s because demand for natural and humanely raised livestock is growing, especially in the U.S., where fast-food chains ranging from Dunkin’ Donuts to McDonald’s are switching over. In addition, new chains using naturally raised meat, like Five Guys and Shake Shack, are expanding rapidly.

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