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.
MCCOY GLOBAL $5.00 (Toronto symbol MCB; TSINetwork Rating: Speculative) (780- 453-8451; www.mccoyglobal.com; Shares outstanding: 27.7 million; Market cap: $142.7 million; Dividend yield: 4.0%) has now sold its Inotec Coatings and Hydraulics business for $9.3 million. Inotec makes coatings for oil and gas drilling tools and mining equipment. It also repairs and maintains hydraulic cylinders.

This deal follows McCoy’s sale of its mobile solutions unit earlier this year and completes the company’s shift toward its faster growing and more profitable energy products and services segment.

This business sells hydraulic gear, including power tongs, for drilling rigs. (Power tongs are large wrench-like tools that tighten and loosen the pipe in the drill hole.)

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ADOBE SYSTEMS INC. $62.19 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 498.7 million; Market cap: $30.4 billion; No dividends paid) reported a 12.5% earnings decline in the quarter ended August 29, 2014, to $0.28 a share from $0.32 a year earlier. Revenue rose 1.0%, to $1.0 billion from $995.1 million.

The company continues to shift away from selling software as a one-time purchase and toward a subscription model. That hurts Adobe’s short-term sales and profits, but it should bring more predictable revenue streams as users continue to switch over.

The stock now trades at 30.8 times the $2.02 a share that Adobe will likely earn in 2015. That’s a high p/e ratio for a company that mainly serves customers in cyclical businesses like publishing.

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FAIR ISAAC CORP. $54.86 (New York symbol FICO; TSINetwork Rating: Average) (415-472-2211; www.fairisaac.com; Shares outstanding: 32.1 million; Market cap: $1.8 billion; Dividend yield: 0.2%) makes FICO Scores, the program that dominates the market for software that businesses use to evaluate customer creditworthiness. The company is also profiting by selling programs that help credit card issuers control fraud and analyze cardholders’ spending patterns.

In its fiscal 2014 third quarter, which ended June 30, 2014, Fair Isaac’s earnings per share rose 9.1%, to $0.60 from $0.55 a year ago.

Revenue gained 7.5%, to $197.6 million from $183.8 million. The company saw stronger sales at its main applications division (66% of the total) on increased licensing revenue from software that detects bank fraud. That offset a decline in sales of creditscoring software and customized programs for analyzing large amounts of a business’s data.

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BROADRIDGE FINANCIAL SOLUTIONS $39.39 (New York symbol BR; TSINetwork Rating: Extra Risk) (201-714-3000; www.broadridge.com; Shares outstanding: 119.5 million; Market cap: $4.7 billion; Dividend yield: 2.7%) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. The company processes 90% of all proxy votes in the U.S. and Canada.

Without one-time items, Broadridge earned $114.6 million, or $1.16 a share, in its fiscal 2014 fourth quarter, which ended June 30, 2014. That’s up 1.5% from $142.4 million, or $1.15 a share, a year earlier.

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 distributing information when mutual funds change managers.

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IAMGOLD $2.80 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 376.7 million; Market cap: $1.0 billion; No dividends paid) is selling its Niobec niobium mine in Quebec’s Saguenay- Lac-Saint-Jean region. When used as an additive, niobium makes steel stronger, more heat-resistant and easier to weld.

The company will receive $500 million U.S. when the sale closes later this year. It will get another $30 million U.S. when an adjacent deposit of rare earth elements goes into production.

Following the sale, the company will hold cash and gold bullion worth over $800 million U.S. That puts IAMGold in a strong position to pay down its long-term debt of $641 million U.S.

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AMERIGO RESOURCES $0.37 (Toronto symbol ARG; TSINetwork Rating: Speculative) (604-681-2802; www.amerigoresources.com; Shares outstanding: 173.7 million; Market cap: $66.0 million; No dividends paid) processes copper and molybdenum from waste rock at Chile’s El Teniente, the world’s largest underground copper mine. This includes rock from the mine’s current production and tailings from the nearby Colihues deposit. This contract runs at least through 2037.

Amerigo gets 94% of its revenue by processing copper. The remaining 6% comes from molybdenum.

In the quarter ended June 30, 2014, Amerigo’s copper output fell 2.2%, to 9.34 million pounds from 9.55 million a year earlier. Molybdenum production declined 13.5%, to 152,340 pounds from 176,845.

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AURICO GOLD $4.36 (Toronto symbol AUQ; TSINetwork Rating: Speculative) (604-681-2802; www.auricogold.com; Shares outstanding: 248.5 million; Market cap: $1.0 billion; Dividend yield: 0.4%) operates the El Chanate gold mine in Mexico. The company also started up its Young-Davidson gold project in northern Ontario last year. It’s now at full production.

In the three months ended June 30, 2014, AuRico’s production jumped 47.2%, to 56,198 ounces from 38,186 ounces a year earlier. That increased its revenue by 31.0%, to $75.5 million from $57.7 million.

Cash flow per share declined to $0.05 from $0.08. The company’s costs rose as it moved from open pit to underground mining at Young-Davidson, but they should fall as AuRico completes the mine’s new infrastructure.

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SYMANTEC CORP. $22.15 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (408-517- 8000; www.symantec.com; Shares outstanding: 690.3 million; Market cap: $15.5 billion; Dividend yield: 2.7%) plans to break itself into two publicly traded companies.

One will keep the Symantec name and focus on antivirus and security software and services. The other will consist of its information management (IM) operations, which include data backup and recovery software.

Symantec aims to hand out shares in the IM business by the end of 2015.

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DOREL INDUSTRIES $32.77 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.1 billion; Dividend yield: 4.0%) makes a range of items, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational goods, mainly bicycles.

In the three months ended June 30, 2014, Dorel’s sales rose 9.2%, to $655.8 million from $600.4 million a year earlier (all figures except share price and market cap in U.S. dollars). Sales rose 20.2% at the recreational segment and 3.2% at the juvenile products division. Home furnishing sales fell slightly.

Earnings per share rose 14.6%, to $0.47 from $0.41. Sales of its highly profitable Cannondale and Pacific Cycle premium bikes remain strong. That offset a small loss from Dorel’s 70% stake in Caloi, which it bought for an undisclosed amount last year.

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