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
When we get questions about investing in stocks through split-share, our advice is, avoid the risk and invest in good stocks individually
DEVON ENERGY CORP. $78.50 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235- 3611; www.dvn.com; Shares outstanding: 407.9 million; Market cap: $31.9 billion; Dividend yield: 1.2%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 53% gas and 47% oil.

In 2011, Devon sold all of its international and Gulf of Mexico properties, which it saw as risky and expensive to develop.

The company is narrowing its focus even further with its recent agreement to sell some of its properties to Linn Energy LLC for $2.3 billion. The sale includes Devon’s holdings in the Rockies, the onshore Gulf Coast and the Mid-Continent region (which includes Oklahoma, Kansas and Texas).

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Investment Advice
Every Monday we now feature “A Stock to Sell” as our daily post. With each sell, we give you a full explanation of why we advise against investing in these stocks. This is part of our new approach offering you buy, hold and sell advice in our daily posts. You also get “Best Canadian Stocks” on Tuesday, “Our Top U.S. Stocks” on Thursday, and every Friday, our advice on one of the stocks that members of Pat’s Inner Circle have asked about in their weekly Question & Answer sessions. Rite Aid (symbol RAD on New York; www.riteaid.com), is one of the largest drugstore chains in the U.S., with 4,623 outlets in 31 states and Washington, D.C....
PENGROWTH ENERGY $7.35 (Toronto symbol PGF; Shares outstanding: 527.5 million; Market cap: $3.9 billion; TSINetwork Rating: Average; Dividend yield: 6.5%; www.pengrowth.com) produces oil and natural gas in Western Canada and off the Nova Scotia coast. Gas accounts for 55% of its production; the other 45% is oil.

Pengrowth produced 75,102 barrels a day (including gas) in the first quarter of 2014, down 16.3% from 89,702 a year earlier. That’s mainly because it sold several less important oil and gas properties in Western Canada. It’s investing the proceeds in more promising projects, including its Lindbergh oil sands development in Alberta’s Cold Lake region.

The company’s cash flow fell 6.9%, to $0.27 a share from $0.29.

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ENBRIDGE INC. $50.81 (Toronto symbol ENB; Shares outstanding: 834.8 million; Market cap: $4242 billion; TSINetwork Rating: Above Average; Dividend yield: 2.8%; www.enbridge.com) has won approval from Ottawa for its Northern Gateway pipeline.

The line will pump crude from Alberta’s oil sands to Kitimat, B.C. From there, tankers would ship the oil to customers in Asia.

It will cost $7.9 billion to build this project. However, that estimate is sure to rise as other oil sands and pipeline projects drive up labour and material costs.

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SPDR S&P CHINA ETF $76.51 (New York symbol GXC; buy or sell through brokers; www.spdrs.com) aims to track the S&P China BMI Index, which is made up of all publicly traded Chinese stocks available to foreign investors. Right now, this ETF holds 269 stocks.

The $841.1-million fund’s top holdings are Tencent Holdings, 8.5%; China Construction Bank, 6.0%; Industrial & Commercial Bank, 5.3%; China Mobile, 5.2%; Baidu, 5.2%; Bank of China, 3.4%; CNOOC Ltd., 2.9%; PetroChina, 2.8%; China Petroleum & Chemical, 2.4%; and China Life, 2.0%.

The ETF was launched on March 19, 2007. It has a 0.59% MER and yields 2.5%.

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POWERSHARES QQQ ETF $94.06 (Nasdaq symbol QQQQ; buy or sell through brokers; www.invescopowershares.com), formerly called Nasdaq 100 Trust Shares, holds stocks that represent the Nasdaq 100 Index, which consists of the 100 largest shares on the Nasdaq exchange, based on market cap.

The Nasdaq 100 Index contains shares of companies in a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial companies. The fund’s expenses are about 0.20% of its assets.

The index’s highest-weighted stocks are Apple, Microsoft, Qualcomm, Google, Cisco Systems, Intel, Amazon.com, Gilead Sciences, Comcast Corp. and Facebook.

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SPDR DOW JONES INDUSTRIAL AVERAGE ETF $169.58 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average.

The SPDR Dow Jones ETF’s top holdings are Visa, IBM, Goldman Sachs Group, ExxonMobil, Chevron, 3M, McDonald’s, Caterpillar, United Technologies and Boeing. The fund’s expenses are about 0.17% of its assets.

SPDR Dow Jones ETF is a buy.

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SPDR S&P 500 ETF $197.12 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major in U.S. companies that are chosen based on their market cap, liquidity and industry group.

The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, IBM, Chevron, General Electric, Pfizer, Berkshire Hathaway, Verizon, Wells Fargo and AT&T. The fund’s expenses are just 0.10% of its assets.

If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.

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ISHARES S&P/TSX 60 INDEX FUND $21.94 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.

The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include.

The index’s top holdings are Royal Bank, 8.1%; TD Bank, 7.4%; Bank of Nova Scotia, 6.4%; Suncor Energy, 4.8%; CN Railway, 4.2%; Canadian Natural Resources, 3.9%; Bank of Montreal, 3.7%; Enbridge, 3.1%; Valeant Pharmaceuticals, 3.0%; Manulife Financial, 2.9%; CIBC, 2.8%; BCE, 2.7%; TransCanada Corp., 2.6%; Potash Corp., 2.5%; CP Rail, 2.2%; and Cenovus, 1.9%.

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