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
ADOBE SYSTEMS INC. $76.03 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 500.3 million; Market cap: $38.0 billion; No dividends paid) makes software that lets computer users create, edit and share documents in the popular PDF format. Graphic designers also use its programs to create print publications and web pages.

In its fiscal 2015 first quarter, which ended February 27, 2015, Adobe earned $0.44 a share, up 46.7% from $0.30 a year earlier. Revenue gained 10.9%, to $1.11 billion from $1.00 billion.

Like Symantec, Adobe is shifting from selling software as a one-time purchase and toward a subscription model. It now gets 70% of its revenue from recurring sources, up from 52% a year ago.

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SYMANTEC CORP. $23.79 (Nasdaq symbol SYMC; TSINetwork Rating: Average)(408-517-8000; www.symantec.com; Shares outstanding: 682.4 million; Market cap: $16.3 billion; Dividend yield: 2.5%) sells computersecurity technology, including antivirus and emailfiltering software, to businesses and consumers.

In its fiscal 2015 third quarter, which ended January 2, 2015, Symantec earned $367 million, unchanged from a year earlier. However, per-share earnings rose 1.9%, to $0.53 from $0.52, on fewer shares outstanding.

Revenue slipped 3.9%, to $1.64 billion from $1.71 billion. But if you disregard the negative impact of the high U.S. dollar on the company’s overseas sales, revenue was flat.

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CHESAPEAKE ENERGY $16.02 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chk.com; Shares outstanding: 665.0 million; Market cap: $10.1 billion; Dividend yield: 2.2%) has filed regulatory reports showing that its chairman, Archie W. Dunham, recently purchased one million of the company’s shares at prices ranging from $13.92 to $14.05, for a total of $14 million. Dunham now holds 2.6 million shares.

As well, activist investor Carl Icahn recently increased his stake in the company to 10.98% from 9.98%. He bought his shares for $14.15 each and now holds 73 million shares, up from 66 million. Icahn has a long history of pushing companies to make changes that increase shareholder value.

Investors can put too much weight on insider trading, since insiders can delude themselves about their employer just as easily as outsiders—and it pays to remember that insiders may sell for a variety of personal reasons that have nothing to do with the company. On the other hand, insiders only make substantial buys for one reason—they think the company has investment appeal.

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DELPHI ENERGY $1.78 (Toronto symbol DEE; TSINetwork Rating: Speculative)(403-265-6171; www.delphienergy.ca; Shares outstanding: 155.5 million; Market cap: $269.0 million; No dividends paid) develops, produces and explores for oil and natural gas in Alberta. Its average daily production of 12,035 barrels of oil equivalent is 69% gas and 31% oil.

In the quarter ended December 31, 2014, Delphi’s cash flow per share rose 42.9%, to $0.10 from $0.07. That’s because it raised its production by 33.9% and realized higher oil prices.

Like Birchcliff, Delphi will cut spending this year: its outlays will now total $50 million, down from $101 million in 2014. However, that should still let it keep production steady at today’s levels. The company could also raise its spending later this year if oil and gas prices move higher.

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BIRCHCLIFF ENERGY $7.73 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Shares outstanding: 152.3 million; Market cap: $1.1 billion; No dividends paid) develops, produces and explores for oil and gas, mainly in the Peace River Arch area near the Alberta/B.C. border. About 85% of its output is gas. The remaining 15% is oil.

In the three months ended December 31, 2014, Birchcliff’s cash flow per share rose 17.1%, to $0.41 from $0.35 a year earlier. The company raised its daily output by 32.8%, offsetting lower oil prices and boosting its cash flow.

Like many oil and gas producers, Birchcliff plans to cut back on exploration and development spending. This year, it will devote $266.7 million to this purpose, down from $450.0 million in 2014.

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IAMGOLD CORP. $2.67 (Toronto symbol IMG; TSINetwork Rating: Speculative)(1-888- 464-9999; www.iamgold.com; Shares outstanding: 391.3 million; Market cap: $1.0 billion; No dividends paid) will sell its 1% revenue royalty on the Diavik diamond mine in the Northwest Territories to Sandstorm Gold Ltd. (symbol SSL on Toronto).

Diavik is Canada’s largest diamond mine and has been in operation since 2003.

Sandstorm will pay $52.5 million U.S. in cash plus three million warrants. IAMGold can exercise the warrants for up to five years after production from a new zone at Diavik starts up. The exercise price is $4.50; Sandstorm currently trades at $4.38.

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BMTC GROUP $16.50 (Toronto symbol GBT.A; TSINetwork Rating: Extra Risk)(514-648-5757; No website; Shares outstanding: 44.9 million; Market cap: $725.0 million; Dividend yield: 1.5%) is one of Quebec’s biggest retailers of furniture, electronics and appliances, with 37 outlets. It mainly sells these items through its two affiliates: Brault & Martineau and Ameublements Tanguay.

In March 2012, BMTC introduced a new banner, Economax, which offers lower-priced products. The company rebranded four outlets that it had operated as Brault & Martineau liquidation centres.

BMTC has opened seven more Economax stores since then. It has also bought land in Drummondville for a new store to open in late 2015.

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REITMANS (CANADA) LTD. $7.26 (Toronto symbol RET.A; TSINetwork Rating: Extra Risk) (514-384- 1140; www.reitmans.com; Shares outstanding: 64.6 million; Market cap: $451.7 million; Dividend yield: 2.8%) owns 823 women’s clothing stores across Canada.

The chain consists of 341 Reitmans, 139 Penningtons, 107 Smart Set, 105 Addition Elle, 76 RW & Co. and 68 Thyme Maternity stores. It also has 21 Thyme Maternity boutiques in Canadian Babies “R” Us stores.

In the quarter ended January 31, 2015, Reitmans’ sales fell 1.8%, to $236.3 million from $240.7 million a year earlier. Sales declined because it closed 55 lessprofitable stores. Same-store sales gained 2.1%.

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CALIAN TECHNOLOGIES $18.50 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613-599-8600; www.calian.com; Shares outstanding: 7.4 million; Market cap: $136.6 million; Dividend yield: 6.1%) has won a $15- million contract with the Royal Canadian Air Force (RCAF) to provide airworthiness engineering and support. The contract starts immediately and will run to March 31, 2017. It includes one additional option year.

Calian, through its Amtek subsidiary and in conjunction with subcontractor Valcom Consulting Group, will supply 40 engineers to help the RCAF meet its regulatory requirements for the safe and effective operation of its equipment.

This latest deal will add to Calian’s revenue, which should reach $220 million this year. It also demonstrates the company’s ongoing ability to win recurring orders from Canadian federal government departments, including the Department of National Defence.

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