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
A conservative, step-by-step Canadian guide: account choice, W-8BEN, FX cost cuts, first trade, and DRIP, built for steady dividend income.
AMEREN CORP. $43 (www.ameren.com) has raised its quarterly dividend by 2.5%, to $0.41 a share from $0.40. The new annual rate of $1.64 yields 3.8%. Ameren should benefit from recent rate increases at its gas-distribution operations. However, most of its power plants burn coal, so it will have to convert them to gas and other fuels to comply with tougher environmental regulations....
GENUINE PARTS CO. $102 (www.genpt.com) earned $1.24 a share in the quarter ended September 30, 2014, up 10.7% from $1.12 a year earlier. Sales rose 8.2%, to a record $4.0 billion from $3.7 billion. Sales at its auto parts business (52% of the total) rose 4.1%....
VISA INC. $257 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 620.0 million; Market cap: $159.3 billion; Price-to-sales ratio: 12.8; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest electronic payments network, through which it processes credit, debit, prepaid and commercial transactions. Visa gets most of its revenue from fees it charges the card issuers and merchants that use its network. It bases these fees on transaction volumes and other factors. The banks that issue the cards are responsible for evaluating customer creditworthiness and collecting payments, not Visa.

Thanks to the continued growth of online shopping, which has encouraged more credit and debit card use, Visa’s revenue rose 57.5%, from $8.1 billion in fiscal 2010 to $12.7 billion in 2014 (fiscal years end September 30).

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BAXTER INTERNATIONAL INC. $72 (New York symbol BAX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 542.0 million; Market cap: $39.0 billion; Priceto- sales ratio: 2.4; Dividend yield: 2.9%; TSINetwork Rating: Average; www.baxter.com) earned $1.35 a share in the three months ended September 30, 2014, up 8.9% from $1.24 a year earlier. Sales rose 13.1%, to $4.2 billion from $3.7 billion.

Baxter’s medical products business (60% of total revenue) reported 17.2% higher sales, thanks to Gambro, a dialysisequipment maker the company bought for $3.9 billion in September 2013. Without Gambro, medical product sales rose 5%.

Sales at the BioScience division (40% of the total) gained 7.5%, mainly due to stronger demand for its Advate hemophilia drug.

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IDEXX LABORATORIES INC. $149 (Nasdaq symbol IDXX; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 47.7 million; Market cap: $7.1 billion; Price-to-sales ratio: 5.2; No dividends paid; TSINetwork Rating: Average; www.idexx.com) earned $1.05 a share in the quarter ended September 30, 2014, up 25.0% from $0.84 a year earlier. Sales rose 13.4%, to $383.5 million from $338.3 million.

These gains are mainly because veterinarians are buying more of Idexx’s equipment for detecting diseases in pets. That’s also spurring more demand for consumable products that vets must continuously replenish.

However, the stock has jumped 40% since the start of 2014 and now trades at a high 38.4 times the $3.88 a share that Idexx will likely earn over the full year.

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APACHE CORP. $72 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 376.8 million; Market cap: $27.1 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.4%; TSINetwork Rating: Average; www.apachecorp.com) is selling some of its less important oil and gas properties in Texas and Oklahoma.

It will receive $1.4 billion when it completes the sale by the end of 2014. To put that in context, Apache earned $528 million, or $1.38 a share, in the three months ended September 30, 2014.

The company will probably invest the cash in its more promising shale oil properties in the U.S. Apache is a hold.

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DIEBOLD INC. $36 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.6 million; Market cap: $2.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.2%; TSINetwork Rating: Average; www. diebold.com) aims to save a total of $150 million by the end of 2015, mainly through layoffs and plant closures.

In the third quarter of 2014, the company earned $33.0 million, or $0.51 a share, up from a year-earlier loss of $21.7 million, or $0.34. Without unusual items, earnings per share fell 3.6%, to $0.54 from $0.56.

Sales gained 8.9%, to $768.0 million from $705.4 million. Stronger demand for automated teller machines in Europe and Asia offset slower sales in North America and Latin America. Diebold also sold more security systems.

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FRONTIER COMMUNICATIONS CORP. $7.06 (Nasdaq symbol FTR; Income Portfolio, Utilities sector; Shares outstanding: 1.0 billion; Market cap: $7.1 billion; Price-to-sales ratio: 1.5; Dividend yield: 5.7%; TSINetwork Rating: Average; www.frontier.com) recently paid $2.0 billion for AT&T’s traditional phone business in Connecticut. The company now has 3.0 million residential and business customers in 28 states.

Excluding acquisition-related costs, Frontier earned $47.7 million, or $0.05 a share, in the third quarter of 2014. That’s down 15.6% from $56.5 million, or $0.06 a share, a year earlier. Even with the AT&T operations, revenue fell 3.7%, to $1.14 billion from $1.19 billion, as lower telephone revenue offset higher sales of Internet services.

The company borrowed most of the cash it needed for this purchase, which increased its long-term debt to $9.2 billion, or 1.3 times its market cap.

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WINDSTREAM HOLDINGS INC. $10 (Nasdaq symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 602.8 million; Market cap: $6.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 10.0%; TSINetwork Rating: Average; www.windstream.com) gets 73% of its revenue by selling high-speed Internet and other communication services to 357,700 businesses.

The other 27% comes from selling phone, Internet and video services to 3.2 million residential customers, mainly in the rural U.S.

In July 2014, the company announced that it would transfer its fibre optic and copper networks, some land and buildings to a new real estate investment trust (REIT). Windstream will then lease these assets from the REIT for at least the next 15 years at $650.0 million annually.

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