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.
L BRANDS INC. $68 (New York symbol LB; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 292.4 million; Market cap: $19.9 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.0%; TSINetwork Rating: Average; www.lb.com) owns 1,113 Victoria’s Secret lingerie stores and 1,640 Bath & Body Works personal care products outlets. Smaller chains include 153 La Senza (lingerie) locations in Canada and 29 Henri Bendel (jewellery) stores in the U.S.

L Brands is removing some clothing and slowerselling items like cosmetics from its Victoria’s Secret online store. However, to clear the discontinued goods, L Brands has cut their prices. That could squeeze its profit margins in the next few months.

Meanwhile, the company earned $188.4 million in its fiscal 2015 second quarter, which ended August 2, 2014. That’s up 5.3% from $178.9 million a year earlier. Per-share earnings rose 3.3%, to $0.63 from $0.61, on more shares outstanding.

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MACY’S INC. $60 (New York symbol M, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 353.1 million; Market cap: $21.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.1%; TSINetwork Rating: Average; www.macysinc.com) operates 840 Macy’s and Bloomingdale’s department stores in 45 states.

The company is benefiting from its strategy of tailoring its merchandise to local tastes. It’s also doing a good job of blending its online business with its stores.

For example, shoppers can now buy goods on the company’s website and pick them up at any Macy’s location. The company has also brought in new radio frequency identification tags that help it keep track of merchandise and avoid product shortages.

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ADOBE SYSTEMS INC. $69 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 497.4 million; Market cap: $34.3 billion; Price-to-sales ratio: 8.5; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) earned $140.6 million in its fiscal 2014 third quarter, which ended August 29, 2014. That’s down 14.5% from $164.4 million a year earlier. Per-share earnings declined 12.5%, to $0.28 from $0.32, on fewer shares outstanding. Revenue rose 1.0%, to $1.01 billion from $995.1 million.

The company continues to shift away from selling software as a one-time purchase and toward a subscription model. It now gets 63% of its revenue from recurring subscriptions.

Adobe ended the latest quarter with 2.8 million subscribers to its Creative Cloud package of photo editing and desktop publishing programs, up 21.8% from a year earlier. Adobe Marketing Cloud, a package of software aimed at improving online marketing efforts and website performance, saw its revenue rise 13.8%.

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SYMANTEC CORP. $24 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 690.3 million; Market cap: $16.6 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.5%; TSINetwork Rating: Average; www.symantec.com) sells antivirus software and other computer security services.

Home Depot (New York symbol HD) recently hired Symantec and another firm to help investigate a major data breach. Online intruders secretly installed software on Home Depot’s systems that let them steal about 56 million credit card numbers and related data, but not personal identification numbers for debit cards.

Symantec has been trying to expand in the fast-growing cyber-security software/services market, and this contract will give it a lot of industry credibility.

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TIM HORTONS INC. $80 (New York symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 132.8 million; Market cap: $10.6 billion; Price-to-sales ratio: 3.7; Dividend yield: 1.5%; TSINetwork Rating: Average; www.timhortons.com) still plans to go ahead with its deal to merge with Miami-based Burger King Worldwide (New York symbol BKW), even though the U.S. government is now clamping down on “tax inversion” deals like this.

The combined firm will be based in Oakville, Ontario, which will let it take advantage of Canada’s 15% corporate tax rate, compared to 35% in U.S.

Under the new rules, it is now more difficult for the foreign parent firm to shift funds between subsidiaries.

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GOOGLE INC. (Nasdaq symbols GOOG $588 (class C: nonvoting) and GOOGL $598 (class A: one vote per share); Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 676.4 million; Market cap: $397.7 billion; Price-to-sales ratio: 6.1; No dividends paid; TSINetwork Rating: Above Average; www.google.com) operates the world’s leading Internet search service. The company has about 70% of this market, mainly because its innovative technology helps users quickly find the information they’re seeking. The U.S. supplies 45% of Google’s revenue.

The company gets about 95% of its revenue by selling advertising on its websites. It mainly does this with its AdWords program.

Using AdWords, advertisers bid on certain search words or phrases. The company then charges advertisers when users click on their ads.

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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, and shows you how you can put it into practice right away. Today’s tip: “Dividends can produce as much as a third of your total return over long periods.”...
PAYPAL HOLDINGS INC. $34 (Nasdaq symbol PYPL; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $40.8 billion; Price-to-sales ratio: 4.7; No dividends paid; TSINetwork Rating: Above Average; www. paypal.com) stopped processing transactions on U.S. online gambling websites following its 2002 acquisition by eBay.

But now that it’s an independent company again, PayPal is testing its online payment system with four U.S. gaming firms, including Caesar’s Entertainment. Online gambling could become a big source of revenue for PayPal, particularly if more states approve it. Right now, Internet gambling is only legal in Nevada, New Jersey and Delaware.

PayPal is a hold.

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Energy service stock
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. Keyera Corp. (symbol KEY on Toronto; www.keyera.com), provides a number of services to the oil and gas industry, including gathering, processing, storage and transportation....