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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A conservative, step-by-step Canadian guide: account choice, W-8BEN, FX cost cuts, first trade, and DRIP, built for steady dividend income.
STUART OLSON INC. $7.65 (Toronto symbol SOX; TSINetwork Rating: Speculative) (780-454-3667; www.stuartolson.com; Shares outstanding: 25.0 million; Market cap: $191.3 million; Dividend yield: 6.3%) has agreed to buy Red Deer, Alberta-based Studon Electric & Controls for $76.2 million. The price could increase by up to $25.8 million over the next three years if Studon meets certain profitability targets.

Studon, which employs 500 to 1,000 electricians and instrumentation tradespeople at any given time, offers construction and maintenance services to the Western Canadian oil and gas, pipeline and petrochemical industries.

This business’s management team will keep leading its day-to-day operations, while Studon will report its results as part of Stuart Olson’s Industrial Group.

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YAMANA GOLD $4.38 (Toronto symbol YRI; TSINetwork Rating: Speculative)(416-815-0220; www.- yamana.com; Shares outstanding: 880.8 million; Market cap: $3.9 billion; Dividend yield: 1.6%) owns eight operating gold mines in Mexico, Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina and has a number of other properties in advanced stages of development.

Yamana now plans to form a subsidiary to hold some of its Brazilian assets. This will let the company focus on its main projects, including the Canadian Malartic gold mine in Quebec, in which it owns a 50% stake.

The new subsidiary, to be named Brio Gold Inc., will hold Yamana’s Fazenda Brasileiro and Pilar gold mines, as well as its C1 Santa Luz development project. Yamana will retain its Chapada and Jacobina mines in Brazil.

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FAIR ISAAC CORP. $68.40 (New York symbol FICO; TSINetwork Rating: Average)(415-472-2211; www.fairisaac.com; Shares outstanding: 32.1 million; Market cap: $2.2 billion; Dividend yield: 0.1%) earned $1.10 a share in its fiscal 2014 fourth quarter, which ended September 30, 2014. That was up 39.2% from $0.79 a year earlier.

Sales rose 16.4%, to $221.6 million from $190.3 million. The company saw stronger sales at its applications division (66% of total revenue) on increased licensing revenue from software that detects bank fraud.

The company expects to earn $2.78 to $2.88 a share for all of fiscal 2015, and it trades at a high 24.2 times the midpoint of that range. As well, the banking industry supplies 75% of Fair Isaac’s revenue, and slowing mortgage demand could hurt sales of its credit-scoring software.

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ADOBE SYSTEMS INC. $74.00 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 498.7 million; Market cap: $36.9 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 2014 fourth quarter, which ended November 28, 2014, Adobe earned $180.3 million, up 9.5% from $164.6 million a year earlier. Per-share earnings improved 12.5%, to $0.36 from $0.32, on fewer shares outstanding. Revenue rose 3.0%, to $1.07 billion from $1.04 billion.

Adobe continues to shift to a subscription-based model for selling software. It now gets 66% of its sales from recurring subscriptions, up from 44% a year ago.

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SYMANTEC CORP. $25.19 (Nasdaq symbol SYMC; TSINetwork Rating: Average)(408-517-8000; www.symantec.com; Shares outstanding: 690.1 million; Market cap: $17.4 billion; Dividend yield: 2.4%) sells computersecurity technology, including antivirus and emailfiltering software, to businesses and consumers.

In its fiscal 2015 second quarter, which ended October 3, 2014, Symantec’s earnings fell 7.5%, to $332 million from $359 million a year earlier. Per-share earnings declined 5.9%, to $0.48 from $0.51, on fewer shares outstanding. Revenue slipped 1.2%, to $1.62 billion from $1.64 billion.

The declines are mainly because consumers bought less security software and Symantec spent a high 17% of its revenue on research. But the company continues to restructure, including cutting jobs and simplifying product lines. That should lift its profits.

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DELPHI ENERGY $1.40 (Toronto symbol DEE; TSINetwork Rating: Speculative)(403-265-6171; www.delphienergy.ca; Shares outstanding: 155.4 million; Market cap: $217.6 million; No dividends paid) develops, produces and explores for oil and natural gas. About 67% of its output is gas. The remaining 33% is oil.

In the three months ended September 30, 2014, Delphi’s production rose 7.5%, to 9,461 barrels of oil equivalent a day from 8,797 a year earlier. Production was down 9.0% from 10,397 barrels a day in the quarter ended June 30, 2014, but that was due to processing delays caused by outside companies.

Those issues, which were resolved at the end of August, cut Delphi’s production by about 1,700 barrels a day in the latest quarter. Its output averaged 11,500 barrels a day in September and October.

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BIRCHCLIFF ENERGY $9.05 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Shares outstanding: 152.2 million; Market cap: $1.4 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 84% of its output is gas. The remaining 16% is oil.

In the three months ended September 30, 2014, Birchcliff’s production rose 38.8%, to 34,235 barrels of oil equivalent a day from 24,662 a year earlier. Cash flow per share jumped 66.7%, to $0.50 from $0.30, on the increased output and higher gas prices.

Birchcliff recently completed Phase 4 of its gasplant expansion in Pouce Coupe, Alberta. That raised the facility’s capacity by 20% and will let Birchcliff bring the additional gas it is now producing to market.

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MAJOR DRILLING $5.57 (Toronto symbol MDI; TSINetwork Rating: Speculative)(1-866- 264-3986; www.majordrilling.com; Shares outstanding: 80.1 million; Market cap: $446.4 million; Dividend yield: 3.7%) is a large contract-drilling firm that mainly serves the mining industry.

In the three months ended October 31, 2014, Major’s revenue fell 5.5%, to $87.2 million from $92.3 million a year earlier. However, its revenue was up 29.0% from $67.6 million in the previous quarter. The company also reported a loss of $0.13 a share, less than its year-ago loss of $0.24.

Despite the significant mining industry downturn, the company continues to report positive cash flow. That should let it maintain its semi-annual dividend of $0.10 a share, which gives the stock a 3.6% yield.

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BMTC GROUP $16.30 (Toronto symbol GBT.A; TSINetwork Rating: Extra Risk)(514-648-5757; No website; Shares outstanding: 45.1 million; Market cap: $733.3 million; Dividend yield: 1.5%) is one of Quebec’s biggest retailers of furniture, electronics and appliances, with 36 outlets. It mainly sells these products 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.

In 2013, BMTC opened four more EconoMax stores. It added another, in Joliette, in March 2014, and an additional one, in LaSalle, on October 24, 2014. BMTC is now considering purchasing land in Drummondville for a new store that would open in late 2015.

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