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
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
Promoting clean, environmentally sound solutions for office design, DIRTT has a respected CEO but may struggle against strong competition.
AGRIUM INC. $102 (www.agrium.com) gets 76% of its revenue and 46% of its earnings from its retail stores, which sell fertilizer, seeds and other supplies to farmers in North America, South America and Australia. That cuts its reliance on bulk fertilizer sales. Best Buy.
Commodity Investments
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.

Linn Energy (symbol LINE on Nasdaq; www.linnenergy.com) acquires and develops oil and gas properties in the Mid-Continent region in the southern U.S., the Permian Basin (Texas and New Mexico) and the Hugoton Basin (Texas and Kansas), as well as in California, Michigan and Illinois.

In December 2013, Linn bought Berry Petroleum for $4.3 billion in stock. The move added long-lasting, mature properties and boosted Linn’s growth prospects. Berry’s reserves were roughly 75% oil.

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EMERA INC. $43 (www.emera.com) earned $2.23 a share in 2014, up 13.8% from $1.96 in 2013. Revenue jumped 33.3%, to $3.0 billion from $2.2 billion. These gains are largely due to the company’s November 2013 purchase of three gas-fired power plants in New England for $541 million U.S....
ENBRIDGE INC. $62 (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 851.6 million; Market cap: $52.8 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) gets 90% of its revenue from pipelines that pump oil and natural gas from Western Canada to Eastern Canada and the U.S. The remaining 10% mainly comes from distributing gas to 2.1 million consumers in Ontario, Quebec, New Brunswick and New York State.

New projects boost revenue

Since 2008, Enbridge has spent $20 billion on 39 new pipelines and other projects. Thanks to these investments, the company’s revenue soared 164.1%, from $12.5 billion in 2009 to $32.9 billion in 2013. Its revenue probably increased to $37.7 billion in 2014.

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IMPERIAL OIL LTD. $50 (Toronto symbol IMO; Conservative Growth and Income Portfolios, Shares outstanding: 847.6 million; Market cap: $42.4 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.0%; TSINetwork Rating: Average; www.imperialoil.ca) spent $5.7 billion on exploration and capital upgrades in 2014, down 29.5% from $8.0 billion in 2013. That’s mainly because it completed the first phase of its 71%-owned Kearl oil sands project. U.S.-based ExxonMobil (New York symbol XOM), which owns 69.6% of Imperial, owns the remaining 29% of Kearl.

For 2015, Imperial expects to spend $4.0 billion on capital projects. Most of that will go toward expanding Kearl, as well as its Cold Lake oil sands property. These projects will last decades, so the recent drop in oil prices will have little impact on their long-term prospects.

Imperial Oil is a buy.

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POTASH CORP. OF SASKATCHEWAN $47 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 830.2 million; Market cap: $39.0 billion; Price-to-sales ratio: 5.9; Dividend yield: 4.1%; TSINetwork Rating: Average; www.potashcorp.com) sold more potash fertilizer in the latest quarter and is benefiting from lower operating costs. But potash prices remain weak.

In the three months ended December 31, 2014, earnings jumped 77.0%, to $407 million from $230 million a year earlier (all amounts except share price and market cap in U.S. dollars). Per-share earnings rose 88.5%, to $0.49 from $0.26, on fewer shares outstanding.

Sales gained 23.4%, to $1.9 billion from $1.5 billion. The company sold 2.5 million tonnes of potash, up 41.6% from 1.8 million a year earlier. However, the average price per tonne rose just 0.7%, to $284 from $282.

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TORSTAR CORP. $7.07 (Toronto symbol TS.B; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 80.1 million; Market cap: $566.3 million; Price-to-sales ratio: 0.5; Dividend yield: 7.4%; TSINetwork Rating: Average; www.torstar.com) gets 60% of its revenue from advertising on its newspapers and their websites, including The Toronto Star, Canada’s largest daily by circulation. Subscriptions account for most of the remaining 40%.

As part of a new strategy to increase online ad sales, Torstar plans to drop the paywall on The Toronto Star’s website and launch a new version for tablet computers. The shift will likely hurt its 2015 revenue but should attract more readers.

The company is debt-free and holds cash of $277.3 million, or $3.46 a share. That will help it adjust to the new online strategy. In addition, dividends total roughly $42 million a year, so the current payout still seems safe.

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TRANSCONTINENTAL INC. $16 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.0%; TSINetwork Rating: Average; www. tctranscontinental.com) is Canada’s leading printer of flyers, magazines, newspapers and books. It also publishes magazines and newspapers.

The company recently agreed to sell its consumer magazine division to TVA Group (Toronto symbol TVA.B). This business publishes 15 English- and French-language magazines, including Elle Canada, Canadian Living and The Hockey News. As part of the deal, Transcontinental will keep printing these magazines, as well as other TVA publications, to the end of June 2022.

Selling these magazines will let the company focus on its smaller newspapers and related websites, which serve local advertisers instead of relying on less profitable national ads.

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