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
Learn which Canadian sectors have historically delivered more dependable dividends—and why. This safety-first guide explains the cash-flow mechanics, key risks (rates, regulation, credit cycles), and how to build a balanced income mix without chasing yield.
FAIR ISAAC CORP. $56 (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 32.2 million; Market cap: $1.8 billion; Price-to-sales ratio: 2.7; Dividend yield: 0.1%; TSINetwork Rating: Average; www.fico.com) makes FICO Scores, a computer program that helps businesses make better decisions about customer creditworthiness. It also makes software that helps credit card issuers control fraud and analyze their cardholders’spending patterns.

In its 2014 third quarter, which ended June 30, Fair Isaac earned $29.2 million, down 0.1% from $29.3 million a year earlier. Earnings per share rose 3.8%, to $0.83 from $0.80, on fewer shares outstanding.

Overall revenue gained 7.5%, to $197.6 million from $183.8 million. Revenue from its applications division (66% of the total) rose 12.9% on increased licensing fees from software that detects bank fraud.

...
DUN & BRADSTREET CORP. $117 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 36.3 million; Market cap: $4.2 billion; Price-to-sales ratio: 2.7; Dividend yield: 1.5%; TSINetwork Rating: Average; www.dnb.com) provides credit reports on over 230 million companies. Its clients use this information to make lending and buying decisions.

Credit reports supply two thirds of Dun & Bradstreet’s revenue. The remaining third comes from other information products, including software that helps businesses manage websites and customer data.

In the quarter ended June 30, 2014, Dun & Bradstreet’s revenue rose 1.8%, to $393.0 million from $386.0 million a year earlier. Stronger demand for its credit reports and other products in North America (72% of total revenue) and Europe (16%) offset weaker sales in Asia (12%).

...
BROADRIDGE FINANCIAL SERVICES INC. $42 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 119.5 million; Market cap: $5.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.6%; TSINetwork Rating: Average; www.broadridge.com) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. The company processes 85% of all proxy votes in the U.S.

Without one-time items, Broadridge earned $144.6 million in its fiscal 2014 fourth quarter, which ended June 30, 2014. That’s up 1.5% from $142.4 million a year earlier. Earnings per share rose 0.9%, to $1.16 from $1.15, on more shares outstanding.

Overall revenue gained 2.4%, to $885.9 million from $865.1 million. Revenue from contracts that pay recurring fees rose 7% and accounted for two-thirds of the total. The remaining third comes from one-time events, such as notifications of special shareholder meetings and sending out information when mutual funds change managers.

...
STATE STREET CORP. $68 (New York symbol STT; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 423.5 million; Market cap: $28.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 1.8%; TSINetwork Rating: Average; www.statestreet.com) sells accounting and administrative services to large institutional investors, like mutual funds and pension plans.

The company’s fee income rises and falls with the value of the mutual funds and other securities it administers. Thanks to improving stock markets and new contracts, its assets under custody and administration rose to $28.4 trillion as of June 30, 2014, up 10.3% from a year earlier.

These gains offset the lower interest income the company earned on bank deposits and certain securities. As a result, its overall revenue rose 3.7% in the three months ended June 30, 2014, to $2.7 billion from $2.6 billion a year earlier.

...
INTERNATIONAL BUSINESS MACHINES CORP. $162 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 997.6 million; Market cap: $161.6 billion; Priceto- sales ratio: 1.8; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.ibm.com) is selling its computer chip manufacturing operations to Globalfoundries Inc.

However, IBM will not get any payment for these assets. Instead, it will pay $1.5 billion to Globalfoundries to take over this money-losing business. IBM has also agreed to buy chips from Globalfoundries for the next 10 years.

This move is part of IBM’s plan to focus on its more-profitable computer services and software divisions.

...
PROCTER & GAMBLE CO. $84 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $226.8 billion; Price-to-sales ratio: 2.9; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.pg.com) began operating in 1837 and is now one of the world’s largest makers of household and personal care products.

The company has five main business lines: fabric and home care products, such as Tide laundry detergent and Duracell batteries (32% of fiscal 2014 sales, 26% of earnings); baby and family care goods, including Pampers diapers (25%, 25%); beauty items like Olay cosmetics (24%, 23%); grooming products, including Gillette razors (10%, 17%); and health care items, such as Crest toothpaste (9%, 9%). Wal-Mart accounts for 14% of the company’s sales.

Procter’s sales rose 6.6%, from $78.9 billion in 2010 to $84.2 billion in 2013 (fiscal years end June 30). However, sales fell 1.3%, to $83.1 billion, in 2014. That’s because Procter sold 80% of its pet food business to Mars, Inc. for $2.9 billion. It expects to complete the sale of the remaining 20% in 2015.

...
Retirement Planning
Retirement is a subject we’re asked about all the time. And it’s one that we deal with on a practical day-to-day basis with our Successful Investor Wealth Management clients. That’s why I’ve just released a new Special Report: Your 12-Step Countdown to the Retirement You Want. Just like our other Special Reports, we make it available to our readers free of charge. You can download it here. In this report, we present a progression of 12 steps that successful investors take to ensure a secure and rewarding retirement. A fulfilling retirement is not simply a matter of accumulating sufficient wealth to give you peace of mind. It is equally a matter of knowing what you will do—in effect, ensuring that you will be as active and productive with your time as you were during your working days....
Income Investing
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific investment advice. Each Investor Toolkit update gives you a fundamental piece of strategy, including stock trading advice, and shows you how you can put it into practice right away. Today’s tip: “Frequent portfolio turnover is a drain on your profits, so most of your investments should be ones you want to hold on to indefinitely.”...
Investment Counsellor
Every Monday we feature “A Stock to Sell” as our daily post. With every stock we recommend as a sell, we give you a full explanation of why we advise against investing in the stock at this time. Leisureworld Senior Care Corp., $13.28, symbol LW on Toronto (Shares outstanding: 36.3 million; Market cap: $481.6 million; www.leisureworld.ca), is one of Canada’s largest operators of seniors’ housing and the biggest licensed long-term care provider in Ontario....