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.

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Stock investment clubs can help new investors find quality stocks and develop their own investing style. But watch out for the drawbacks.
GENERAL ELECTRIC CO. $26 (New York symbol GE; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 10.0 billion; Market cap: $260.0 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.ge.com) is one of the world’s largest manufacturers. It makes machinery for power generation and distribution, such as turbines, as well as other products, like jet engines, medical equipment, appliances, lighting and locomotives.

The company also operates GE Capital, which mainly provides loans to GE’s clients. The company scaled back GE Capital after the division suffered big losses in the 2008/09 financial crisis. It now accounts for 30% of GE’s revenue and 37% of its earnings.

As part of these reductions, GE Capital will soon unload its North American consumer lending business as a separate firm called Synchrony Financial (New York symbol SYF). GE will sell 20% of Synchrony’s shares through an initial public offering. After that, the company will give its shareholders the chance to swap their GE stock for Synchrony shares.

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FAIR ISAAC CORP. $93 (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 31.1 million; Market cap: $2.9 billion; Price-to-sales ratio: 3.5; 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. FICO Scores dominates this niche market. Fair Isaac also sells software that helps credit card issuers control fraud and analyze cardholders’ spending patterns.

In January 2015, Fair Isaac paid $59.6 million for Tonbeller, a German firm whose software helps banks and insurance companies detect and prevent money laundering and fraud.

In its fiscal 2015 second quarter, which ended March 31, 2015, the company’s revenue increased 11.7%, to $207.1 million from $185.5 million a year earlier. Tonbeller contributed $3.2 million to revenue in the latest quarter.

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Investment Advice
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 advice on specific investment advice. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Value investing’s good reputation owes a great deal to Warren Buffett, but he and other successful investors owe their success to much more than just one relatively narrow approach to the market.” In last week’s Investor Toolkit, I pointed out that learning what not to do can be the hardest and costliest part of an investor’s education (see the Toolkit here). I focused on how this applies to technical analysis—the practice of trying to base investment decisions on past trading and market history. This week I want to expand on what I said, since the idea applies to a wide range of narrow approaches to investing....
stock picks
The outlook for automakers was grim following the financial crisis of 2008. Once-dominant firms like General Motors and Chrysler were forced to turn to the government for bailouts. But few industries have rebounded stronger than the automobile industry....
technical analysis
YUNUS ARAKON
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 advice on specific investment topics such as technical analysis. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Technical analysis can be a useful investment tool, but if you rely too heavily on it—or any other single facet of investing—you have little chance of profiting consistently.” Learning what not to do can be the hardest and costliest part of an investor’s education....
ALARMFORCE INDUSTRIES $11.23 (Toronto symbol AF; TSINetwork Rating: Speculative) (1-800- 267-2001; www.alarmforce.com; Shares outstanding: 11.9 million; Market cap: $134.1 million; Dividend yield: 1.1%) sells twoway voice-alarm systems and monitoring services in Canada and increasingly in the U.S.

In the quarter ended April 30, 2014, the company’s sales rose 8.7%, to $13.2 million from $12.1 million a year earlier. It earned $1.8 million, or $0.15 a share, up 34.3% from $1.3 million, or $0.11.

AlarmForce’s revenue rose along with its subscriber base. Earnings jumped because it spent a lot less on marketing after launching its VideoRelay system. This service lets subscribers watch their homes through computers and smartphones. AlarmForce now has 7,500 VideoRelay subscribers, with 4,400 in Canada and 3,100 in the U.S.

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FIRSTSERVICE CORP. $55.55 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 34.7 million; Market cap: $2.0 billion; Dividend yield: 0.8%) serves the following areas of the real estate market: commercial real estate, residential property management and property improvement. The company has more than 24,000 employees worldwide.

In the quarter ended March 31, 2014, FirstService’s revenue rose 15.1%, to $548.4 million from $476.4 million a year earlier (all figures except share prices in U.S. dollars). Excluding one-time items, earnings per share were $0.09, compared to a loss of $0.20. The first quarter is typically a slower time for the company.

Revenue rosRe at all three of FirstService’s divisions: Colliers International (commercial real estate), up 28%; FirstService Residential (residential property management), up 7%; and FirstService Brands (property services), up 11%. FirstService Brands operates Paul Davis Restoration, California Closets and CertaPro Painters.

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STUART OLSON INC. $10.79 (Toronto symbol SOX; TSINetwork Rating: Speculative) (780-454-3667; www.stuartolson.com; Shares outstanding: 24.9 million; Market cap: $270.0 million; Dividend yield: 4.4%) is the new name for The Churchill Corp. (old symbol CUQ).

Stuart Olson provides building construction, commercial and industrial electrical contracting, earth moving and industrial insulation services to government and private sector clients, mainly in Western Canada.

In the three months ended March 31, 2014, the company lost $614,000, or $0.02 a share. That’s an improvement from a loss of $1.2 million, or $0.05 a share, a year earlier. Revenue rose 15.9%, to $274.6 million from $236.8 million, thanks to rising construction activity in Western Canada.

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IAMGOLD $4.39 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 376.7 million; Market cap: $1.6 billion; No dividends paid) has signed an agreement with Calibre Mining (symbol CXB on Toronto) that gives it the option to invest in a proposed gold-silver mine in Nicaragua.

Under the deal, IAMGold can earn a 51% stake in Calibre’s Easter Borosi project over the next three years if it pays $450,000 and spends $5.0 million to develop the property (all amounts except share price in U.S. dollars).

After that, IAMGold can earn an additional 19% interest if pays Calibre another $450,000 and contributes $5.0 million more to development costs.

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