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.
CAMECO CORP. $21.57 (Toronto symbol CCO; TSINetwork Rating: Extra Risk) (306-956-6200; www.cameco.com; Shares outstanding: 395.8 million; Market cap: $8.5 billion; Dividend yield 1.9%) has decided to postpone developing its Millennium uranium deposit in central Saskatchewan. Cameco owns 69.9% of this property, and Japan’s JCU Exploration holds the other 31.1%.

Uranium prices have declined from around $42 U.S. a pound in February 2014 to $28 today. That’s because delays in restarting Japan’s nuclear reactors have caused uranium inventories to rise. However, prices should recover once the Japanese reactors begin operating.

Cameco is still a buy.

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ACI WORLDWIDE $55.40 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 37.9 million; Market cap: $2.1 billion; No dividends paid) makes software that processes transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. Its products also help cut fraud.

The company has added another major client for its Postilion retail point-to-point encryption (PSPE) software. This technology encrypts credit card numbers and other sensitive information from the point of entry (card swipe) at the merchant to the other end (issuing bank or other payment processor).

The client is Ecentric Payment Systems, South Africa’s leading payment processor. Ecentric processes nearly 400 million transactions a year for retailers. This number should rise as African markets continue to develop and South African retailers expand into other countries on the continent.

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BIRCHCLIFF ENERGY $14.75 (Toronto symbol BIR; TSINetwork Rating:Speculative) (403-261-6401;www.birchcliffenergy.com; Units outstanding: 145.0million; Market cap: $2.2 billion; No dividends paid) reports that its daily production rose 21.6% in the three months ended March 31, 2014, to 31,749 barrels of oil equivalent from 26,108 a year earlier. Cash flow per share jumped 122.2%, to $0.60 from $0.27, on the increased production and higher oil and gas prices.

The company plans to spend $291 million on exploration and development this year, which should boost its 2014 output to a record 34,000 barrels a day. Birchcliff expects to generate full-year cash flow of $331 million, or $2.30 a share, so it can comfortably afford these outlays.

Birchcliff Energy is still a buy.

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CALIAN TECHNOLOGIES $18.82 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613- 599-8600; www.calian.com; Shares outstanding: 7.4 million; Market cap: $135.5 million; Dividend yield: 6.0%) operates in two areas: the business and technology services division (which supplies 70% of Calian’s revenue) provides engineers, health care workers and other skilled professionals to clients on a contract basis. The systems engineering division (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems.

In the three months ended March 31, 2014, the company earned $2.4 million, or $0.32 a share. That’s down 29.5% from $3.4 million, or $0.44 a share, a year ago. Revenue declined 13.1%, to $51.2 million from $58.9 million.

The business and technology services division continues to benefit from recurring orders from Canadian federal government departments, including the Department of National Defence. However, these clients placed fewer orders in the latest quarter, cutting the division’s revenue by 9.5%. That hurt Calian’s profit margins, which lowered its earnings.

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COMPUTER MODELLING GROUP $14.88 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 78.6 million; Market cap: $1.2 billion; Dividend yield: 2.7%) (all figures split 2-for-1) sells software and consulting services that help oil and gas producers use advanced recovery techniques to get more out of their wells. It has customers in over 50 countries and offices in Calgary, Houston, London, Caracas, Bogota, Kuala Lumpur and Dubai.

In the quarter ended March 31, 2014, Computer Modelling’s revenue rose 3.6%, to $20.0 million from $19.3 million a year earlier. Software licence sales (89% of total revenue) rose slightly, but consulting and professional services (11%) jumped 39.1%, thanks to new projects and a large consulting agreement.

Earnings gained 6.7%, to $7.7 million from $7.25 million. Per-share earnings jumped 18.8%, to $0.095 from $0.08, on fewer shares outstanding.

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AEROPOSTALE $3.55 (New York symbol ARO; TSINetwork Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding:78.5 million; Market cap: $277.6 million; No dividends paid) reported better-than-expected earnings this week. However, the high teenage unemployment rate is still weighing on its sales.

In the three months ended May 3, 2014, Aeropostale’s sales fell 12.5%, to $395.9 million from $452.3 million a year earlier. Samestore sales declined 13%.

The company is now closing all 125 of its mall-based P.S. from Aeropostale stores. If you exclude closure and other costs, it lost $0.52 a share. That was better than the consensus forecast of a $0.72-a-share loss. A year earlier, Aeropostale lost $0.16 a share.

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LEON’S FURNITURE LTD. $14.30 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 70.9 million; Market cap: $1.0 billion; Dividend yield: 2.8%) has steadily opened new stores, growing from 27 in 2003 to 78 today.

But the company more than quadrupled in size overnight with its March 28, 2013, purchase of its main rival, The Brick, for $700 million. The Brick has 228 outlets across Canada. Leon’s and The Brick will continue to operate as separate chains.

As a result of the acquisition, Leon’s sales jumped to $426.0 million in the three months ended March 31, 2014, from $162.5 million a year earlier. Earnings fell sharply, to $818,000, or $0.01 a share, from $5.4 million, or $0.08.

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AMAZON.COM $334.38 (Nasdaq symbol AMZN; TSINetwork Rating: Extra Risk) (206- 266-1000; www.amazon.com; Shares outstanding: 460.2 million; Market cap: $150.8 billion; No dividends paid) has launched Prime Music, a music streaming service that’s now bundled with a $99-a-year Amazon Prime subscription.

This is the fourth part of the Amazon Prime service. The other three are unlimited shipping, a Kindle e-book library and Prime Instant Video (streaming movies and TV shows). Prime customers spend three to four times more than regular Amazon shoppers.

The company’s music service will start off with just over a million songs, with no ads and no limit on how much users can listen. It will also offer playlists curated by music experts Amazon will hire.

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BROADRIDGE FINANCIAL SOLUTIONS $40.95 (New York symbol BR; TSINetwork Rating: Extra Risk) (201-714-3000; www.broadridge.com; Shares outstanding: 120.7 million; Market cap: $4.9 billion; Dividend yield: 2.1%) 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 $55.1 million in its fiscal 2014 third quarter, which ended March 31, 2014. That’s up 11.3% from $49.5 million a year earlier. Earnings per share rose 12.8%, to $0.44 from $0.39, on fewer shares outstanding.

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