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
CHIPOTLE MEXICAN GRILL $658.56 (New York symbol CMG; TSINetwork Rating: Speculative) (303- 595-4000; www.chipotle.com; Shares outstanding: 31.0 million; Market cap: $20.4 billion; No dividends paid) is a Denverbased Mexican restaurant chain. It charges slightly higher prices than fast food companies, but it offers better quality food, including naturally raised meat, and superior decor and service.

In the three months ended September 30, 2014, Chipotle’s sales jumped 31.1%, to $1.08 billion from $826.9 million a year earlier. Its restaurants attracted more customers during the quarter, which pushed up same-restaurant sales by 19.8%. Traffic increased even though Chipotle raised its prices.

Chipotle also opened 43 new outlets and now has a total of more than 1,700. In all of 2014, it aims to open 180 to 195 locations. In 2015, it plans to add 190 to 205 more.

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WYNDHAM WORLDWIDE $79.11 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 123.7 million; Market cap: $9.8 billion; Dividend yield: 1.8%) is one of the world’s largest hospitality companies, with 7,600 franchised hotels worldwide.

Wyndham also manages vacation resorts, rental properties, luxury clubs and time-shares. It now has 107,000 vacation-rental properties in 100 countries.

In the three months ended September 30, 2014, the company’s revenue rose 6.1%, to $1.51 billion from $1.43 billion a year earlier. Wyndham gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up its occupancy rate by 2.0%.

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TOROMONT INDUSTRIES LTD. $28.65 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 77.1 million; Market cap: $2.2 billion; Dividend yield: 2.1%) reported revenue of $467.4 million in the three months ended September 30, 2014. That’s down 6.2% from $498.3 million a year earlier.

Earnings declined 7.9%, to $40.0 million from $43.5 million. Per-share earnings fell 8.8%, to $0.52 from $0.57, on more shares outstanding.

However, the lower results were mostly because the year-earlier quarter included Toromont’s biggest-ever mining order: an $82-million delivery to the Baffinland iron ore project.

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YAMANA GOLD $4.48 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.- yamana.com; Shares outstanding: 880.8 million; Market cap: $4.0 billion; Dividend yield: 1.5%) 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’s mines include 50% of the Canadian Malartic gold project in Quebec. The company teamed up with Agnico-Eagle Mines in June 2014 to buy Osisko Mining, which owned Canadian Malartic, for $1.5 billion each (all figures except share price and market cap in U.S. dollars).

In the three months ended September 30, 2014, Yamana’s gold equivalent production (including copper and silver, which are significant by-products of the company’s gold mining) rose 27.5%, to 391,277 ounces from 306,935.

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NEW GOLD $4.71 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold- .com; Shares outstanding: 504.0 million; Market cap: $2.4 billion; No dividends paid) has four mines: the Mesquite project in the U.S., Cerro San Pedro in Mexico, the Peak mine in Australia and the New Afton mine in B.C.

New Gold also owns 30% of the El Morro copper/ gold project in Chile, 100% of the Blackwater property in B.C. and 100% of Ontario’s Rainy River project.

In the three months ended September 30, 2014, New Gold’s cash flow per share rose 60.0%, to $0.16 from $0.10 a year earlier. Gold production fell slightly, to 93,367 ounces from 94,038. But an 8.2% rise in copper output from New Afton and lower overall costs increased New Gold’s cash flow.

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LEON’S FURNITURE $15.20 (Toronto symbol LNF; TSINetwork Rating: Average) (416- 243-7880; www.leons.ca; Shares outstanding: 71.0 million; Market cap: $1.1 billion; Dividend yield: 2.6%) reported sales of $629.2 million in the three months ended September 30, 2014, up slightly from $628.6 million a year earlier.

Earnings gained 25.4%, to $27.3 million, or $0.38 a share. A year earlier, Leon’s earned $21.8 million, or $0.31 a share.

Growth by acquisition can be risky, especially with a deal as big as The Brick purchase. However, Leon’s is doing a good job of integrating The Brick. It’s also finding savings by combining both companies’ distribution networks and computer systems.

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ACI WORLDWIDE $19.49 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 114.9 million; Market cap: $2.2 billion; No dividends paid) makes software for processing transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. The company’s products also help cut fraud.

In the quarter ended September 30, 2014, ACI’s revenue rose 16.7%, to $249.6 million from $213.9 million a year earlier, mainly due to contributions from acquisitions. Earnings per share rose 5.9%, to $0.18 from $0.17.

The company has purchased a number of other firms recently. In November 2013, it paid $109 million for Official Payments Holdings, which processes about 20 million payments totalling over $9 billion annually. ACI also bought Retail Decisions (ReD) in August 2014 for $205 million. ReD is an e-commerce and fraud-prevention firm whose software serves the payments industry.

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MITEL NETWORKS $11.35 (Toronto symbol MNW; TSINetwork Rating: Extra Risk) (613-592-2122; www.mitel.ca; Shares outstanding: 99.9 million; Market cap: $1.1 billion; No dividends paid) has reported its third quarter of results that include Aastra Technologies, a Stock Pickers Digest recommendation that Mitel acquired in a friendly takeover on January 31, 2014.

In the latest quarter, Mitel’s revenue jumped 101.2%, to $272.4 million from $135.0 million a year ago (all figures except share price in U.S. dollars). Most of the increase came from Aastra.

Without one-time items, earnings gained 134.6%, to $19.0 million from $8.1 million. However, earnings per share rose just 28.6%, to $0.18 from $0.14, as the company issued new shares to pay for Aastra.

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WESTJET AIRLINES $31.05 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1- 877-493-7853; www.westjet.com; Shares outstanding: 127.8 million; Market cap: $3.9 billion; Dividend yield: 1.6%) has just reached a tentative labour agreement with its 1,200 pilots.

This deal follows a tentative agreement with a group representing its 2,600 flight attendants.

The company has a great hidden asset in its workforce, which continues to refrain from unionizing in favour of cooperating directly with management. Many flyers find that WestJet provides friendlier service than they get from unionized airlines. WestJet also benefits from the fact that most of its employees are also shareholders.

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