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.
LOBLAW COS. $47.65 (Toronto symbol L; Shares outstanding: 412.5 million; Market cap: $18.9 billion; TSINetwork Rating: Above Average; Yield: 2.0%; www.loblaw.ca) has closed its purchase of Shoppers Drug Mart, which has 1,253 drugstores across Canada.

Loblaw paid $12.4 billion, consisting of $6.6 billion in cash and $5.8 billion in shares. Shoppers shareholders now own 29% of the combined company.

In all, the firm will have $43 billion of annual revenue and $3 billion of gross earnings. Combining marketing and distribution should save $100 million in the first year and $300 million annually by the end of the third year.

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ENERPLUS CORP. $24.31 (Toronto symbol ERF; Shares outstanding: 202.8 million; Market cap: $5.0 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.5%) produces an average of 94,167 barrels of oil equivalent a day (54% gas and 46% oil).

The company’s properties are mainly in Alberta, Saskatchewan, B.C., North Dakota and Montana, as well as the Marcellus shale, which passes through Pennsylvania, New York, Ohio and West Virginia.

In the three months ended December 31, 2013, Enerplus’s production increased 10.1% from a year earlier. However, cash flow per share fell 11.9%, to $0.89 from $1.01, as a short-term lack of pipeline capacity made it harder for the company to sell its oil at market prices.

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ARC RESOURCES $32.52 (Toronto symbol ARX; Shares outstanding: 314.9 million; Market cap: $10.4 billion; TSINetwork Rating: Speculative; Dividend yield: 3.7%; www.arcresources.com) produces oil and natural gas in Western Canada. Its average daily output of 100,883 barrels of oil equivalent is weighted 59% to gas and 41% to oil.

In the three months ended December 31, 2013, ARC’s cash flow per share rose 11.8%, to $0.76 from $0.68 a year earlier. Production gained 5.4%, and the company’s realized gas price rose 8.7%. Oil prices increased 2.9%.

ARC’s long-term debt is $859.2 million, or a low 8.3% of its market cap. It trades at 9.7 times its forecast 2014 cash flow of $3.34 a share.

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CRESCENT POINT ENERGY $44.59 (Toronto symbol CPG; Shares outstanding: 395.7 million; Market cap: $17.6 billion; TSINetwork Rating: Extra Risk; Div. yield: 6.2%; www.crescentpointenergy.com) continues to add to its production in southeastern Saskatchewan’s Bakken light-oil area.

The Bakken, which covers parts of Montana, North Dakota and Saskatchewan, could contain more than 500 billion barrels of oil.

Oil was first discovered in the Bakken region in 1951, but it has always been hard to extract from the shale rock. However, modern techniques, such as horizontal (or slant) drilling, have made it easier for companies like Crescent Point to access the oil.

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CANADIAN PACIFIC RAILWAY $171.14 (Toronto symbol CP; Shares outstanding: 175.7 million; Market cap: $29.0 billion; TSINetwork Rating: Average; Dividend yield: 0.8%; www.cpr.ca), transports freight between Montreal and Vancouver, and connects with hubs in the U.S. Midwest and northeast.

In the quarter ended March 31, 2014, CP’s earnings per share rose 16.1%, to $1.44 from $1.24 a year earlier. Revenue increased 0.9%, to $1.51 billion from $1.50 billion.

CP’s operating ratio improved to 72.0% from 75.8% a year ago. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.) It continues to benefit from its efficiency improvements, mainly replacing locomotives, improving tracks and adding software that optimizes train loads and speeds.

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investing in stocks
red and yellow pills on white background
Pat McKeough responds to many requests from members of his Inner Circle for specific advice about investing in stocks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle. This week an Inner Circle member asked us about a drug company that specializes in combatting viruses. Hepatitis C is the primary target of treatments developed by Gilead Sciences, but it also plays a significant role in treatments for HIV/AIDS. Pat examines the status of the company’s leading drugs and analyzes its ability to maintain a position of leadership in a fiercely competitive field. ...
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 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: “When you see performance numbers issued by brokers, money managers and newsletter publishers, ask yourself just how hypothetical those figures might be.”...
stock market advice
Too much investor attention tends to be focused on economic forecasts. The fact is, forecasts provide little, if any, advantage when it comes to helpful stock market advice. Most experienced, successful investors feel skeptical, if not downright cynical, about economic forecasts, for three reasons....
PFIZER INC. $30 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 6.4 billion; Market cap: $192.0 billion; Price-to-sales ratio: 3.9; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.pfizer.com) is the world’s largest maker of prescription drugs. Its main brands include Lyrica (epilepsy), Celebrex (arthritis), Viagra (erectile dysfunction) and Prevnar (a pneumonia vaccine).

Pfizer also makes popular over the-counter drugs, including Advil (pain relief), Centrum (vitamins) and Robitussin (cough syrup).

These acquisitions tend to cut risk

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