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
PASON SYSTEMS $18.47 (Toronto symbol PSI; TSINetwork Rating: Speculative)(403-301-3400; www.pason.com; Shares outstanding: 83.4 million; Market cap: $1.5 billion; Dividend yield: 3.7%) rents equipment for monitoring and managing oil and gas rigs. It also sells communication technology, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas producers and drilling contractors in Canada, the U.S., Mexico, Argentina and Australia.

In the three months ended September 30, 2014, the company’s revenue rose 28.9%, to $134.0 million from $104.0 million a year earlier. Pason saw higher sales of its technology in all of its major markets, but especially in the U.S.

The company earned $26.5 million, or $0.32 a share, in the latest quarter, up from $9.1 million, or $0.11. Earnings rose on the higher revenue and an increased contribution from Pason’s U.S. profits because of the stronger U.S. dollar.

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COMPUTER MODELLING GROUP $12.73 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgl.ca; Shares outstanding: 78.6 million; Market cap: $1.0 billion; Dividend yield: 3.1%) sells software and consulting services that help conventional oil and gas producers create complex 3D models of reservoirs. That lets them squeeze more out of those reservoirs using advanced recovery techniques such as injecting steam or chemicals. Typically, only 25% to 30% of oil and gas is recovered during primary production.

Unconventional producers, using hydraulic fracturing, or fracking, of oil and gas-bearing shale, can also use Computer Modelling’s software to determine optimal drilling locations and depths.

In the three months ended December 31, 2014, Computer Modelling’s revenue rose 31.1%, to $25.2 million from $19.2 million a year earlier. Software licensing revenue (92% of the total) rose 34.8%, and consulting and professional services revenue (8%) was virtually unchanged.

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FAIR ISAAC CORP. $81.96 (New York symbol FICO; TSINetwork Rating: Average)(415-472-2211; www.fairisaac.com; Shares outstanding: 31.4 million; Market cap: $2.6 billion; Dividend yield: 0.1%) makes FICO Scores, a computer program that helps businesses make better decisions about customer creditworthiness. Fair Isaac also sells software that helps credit card issuers control fraud and analyze cardholders’ spending patterns.

In its fiscal 2015 first quarter, which ended December 31, 2014, Fair Isaac’s revenue rose 2.8%, to $189.6 million from $184.3 million a year earlier.

Earnings per share fell 6.8%, to $0.68 from $0.73. Fair Isaac spent more on research and marketing, and that hurt profits.

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HECLA MINING COMPANY $3.35 (New York symbol HL; TSINetwork Rating: Extra Risk) (208-769- 4100; www.hecla-mining.com; Shares outstanding: 367.4 million; Market cap: $1.2 billion) explores for, mines and processes silver and gold in the U.S. and Mexico.

Most of the company’s silver output comes from its Greens Creek mine in Alaska and its Lucky Friday project in Idaho. Hecla’s Casa Berardi mine in Quebec supplies the majority of its gold production.

In the three months ended December 31, 2014, Hecla produced 3.2 million ounces of silver, up 29.1% from 2.5 million ounces a year earlier. Gold output rose 16.1%, to 54,674 ounces from 47,108. Cash flow per share climbed 18.2%, to $0.13 from $0.11.

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CAMECO CORP. $19.80 (Toronto symbol CCO; TSINetwork Rating: Extra Risk)(306-956-6200; www.cameco.com; Shares outstanding: 395.8 million; Market cap: $7.9 billion; Dividend yield 2.0%) is the world’s largest uranium producer. It supplies 16% of global mine production and has large, high-grade reserves, low-cost operations, significant market share and many mines.

Cameco is also one of the western world’s largest converters of enriched uranium for use in nuclear reactors. In addition, it owns NUKEM, a nuclear-fuel trader and broker.

In the three months ended December 31, 2014, Cameco’s revenue fell 9.0%, to $889 million from $977 million a year earlier. It sold more uranium at higher prices in the latest quarter. However, the yearago quarter included revenue from the company’s 31.6% stake in Ontario’s Bruce Power partnership, which it sold in early 2014.

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p>FIRSTSERVICE CORP. $72.00 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960- 9500; www.firstservice.com; Shares outstanding: 34.5 million; Market cap: $2.6 billion; Div. yield: 0.7%) plans to spin off its Colliers International business into a new firm called Colliers International Group. FirstService will hand out Colliers shares to its own investors. Colliers is one of the world’s top three commercial real estate firms, offering a range of services around the globe. In 2014, it had revenue of $1.7 billion U.S.

After the spinoff, FirstService will carry on with residential property management and improvement, which had $1.1 billion U.S. of revenue in 2014. FirstService shareholders won’t pay income taxes on the transaction until they sell shares of the new FirstService or Colliers International.

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MENTOR GRAPHICS CORP. $24.74 (Nasdaq symbol MENT; TSINetwork Rating: Extra Risk) (503-685-7000; www.mentor.com; Shares outstanding: 115.1 million; Market cap: $2.8 billion; Dividend yield: 0.8%) 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.

The company sells its products and services worldwide, mainly to large firms in the communications, technology, military and transportation industries.

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TOROMONT INDUSTRIES LTD. $27.71 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667- 5511; www.toromont.com; Shares outstanding: 77.1 million; Market cap: $2.1 billion; Dividend yield: 2.2%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. It also makes refrigeration systems through its CIMCO division.

The company completed the spinoff of Enerflex Ltd. (see right) in 2011. Shareholders received shares of both the new Toromont Industries and Enerflex.

In the three months ended September 30, 2014, Toromont’s revenue fell 6.2%, to $467.4 million from $498.3 million a year earlier.

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STANTEC INC. $30.05 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 93.8 million; Market cap: $2.8 billion; Dividend yield: 1.2%) (all figures adjusted for a 2-for-1 share split in November 2014) sells a range of consulting, project-delivery, design and technology services. The company’s clients operate in a variety of industries, including oil and gas, transportation and construction.

In the quarter ended September 30, 2014, Stantec’s revenue rose 12.2%, to $544.2 million from $484.8 million a year earlier. Earnings gained 5.7%, to $48.6 million, or $1.04 a share, from $46.0 million, or $0.99.

Stantec continues to grow by acquisition. It has now completed its purchase of Montreal-based Dessau, a distressed firm that’s one of a number of companies caught up in a Quebec government inquiry into corruption in the construction industry. Under the deal, Stantec won’t be responsible for any of the millions of dollars in fines or penalties Dessau may have to pay.

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