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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If you want to ensure a higher (and safer) rate of return for your retirement portfolio, then it’s important to know what not to invest in after retirement
WAL-MART STORES INC. $76 (New York symbol WMT; Conservative Growth Portfolio: Consumer sector; Shares outstanding: 3.2 billion; Market cap: $243.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.walmart.com) will soon let customers trade in their used video games for a credit they can use to buy other merchandise. The company will then refurbish the games and resell them in its stores.

This move should help Wal-Mart attract more customers and could spur video game console sales. As well, profit margins on used games tend to be much higher than those on new games.

Wal-Mart is a buy.
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BOEING CO. $124 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 743.4 million; Market cap: $92.2 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.4%; TSINetwork Rating: Above Average; www. boeing.com) has discovered hairline cracks on the wings of 40 of its 787 Dreamliner passenger planes that are currently in production.

The problem, which does not affect planes already in service, is because the Japanese company that makes the wings changed its manufacturing process. Boeing feels it can make repairs quickly, which would let it meet its target of delivering 110 Dreamliners this year.

Boeing is a buy....
FAIR ISAAC CORP. $54 (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 34.9 million; Market cap: $1.9 billion; Price-to-sales ratio: 2.7; 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. The company also makes software that helps credit card issuers control fraud and analyze cardholder spending patterns.

In its fiscal 2014 first quarter, which ended December 31, 2013, Fair Isaac’s earnings fell 17.6% to $26.2 million, or $0.73 a share. A year earlier, it earned $31.8 million, or $0.88. Revenue fell 3.0%, to $184.3 million from $190.0 million. The declines mainly resulted from a big order in the year-earlier quarter.

The company also raised its research spending by 24.3% in the latest quarter, to $18.1 million (or 9.8% of revenue) from $14.6 million (or 7.7%) a year earlier.
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BROADRIDGE FINANCIAL SERVICES INC. $37 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 119.4 million; Market cap: $4.4 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.broadridge.com) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. The company processes 85% of all proxy votes in the U.S.

In its fiscal 2014 second quarter, which ended December 31, 2013, Broadridge earned $31.2 million, up 43.1% from $21.8 million a year earlier. Earnings per share rose 47.1%, to $0.25 from $0.17, on fewer shares outstanding.

Revenue gained 5.6%, to $520.6 million from $493.2 million. Revenue from contracts that pay Broadridge recurring fees (two-thirds of the total) rose 9% and accounted for almost all of the overall gain. The remaining third comes from one-time events, such as special shareholder meetings and distributing information when a mutual fund changes managers.
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GENERAL MILLS INC. $51 (New York symbol GIS, Conservative Growth Portfolio, Consumer sector; Shares outstanding: 614.5 million; Market cap: $31.3 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.generalmills.com) is one of the world’s largest food makers. Its top brands include Big G (cereal), Green Giant (canned and frozen vegetables), Pillsbury (baking dough), Old El Paso (tacos), Progresso (soups and salads) and Yoplait (yogurt).

In its fiscal 2014 third quarter, which ended February 23, 2014, the company’s sales fell 1.2%, to $4.38 billion from $4.43 billion a year earlier. General Mills raised its prices to cover rising costs, but it sold less food, partly because unusually cold winter weather kept U.S. shoppers at home. Unfavourable currency exchange rates, particularly in Venezuela, also weighed on sales.

Earnings rose 3.1%, to $410.6 million from $398.4 million. Per-share earnings gained 6.7%, to $0.64 from $0.60, on fewer shares outstanding. However, if you exclude unusual items, such as gains on hedging contracts General Mills uses to lock in wheat and corn prices, per-share earnings fell 6.1%, to $0.62 from $0.66.
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CINTAS CORP. $59 (Nasdaq symbol CTAS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 120.1 million; Market cap: $7.1 billion; Price-to-sales ratio: 1.6; Dividend yield: 1.3%; TSINetwork Rating: Average; www.cintas .com) is selling its document-shredding operations to Toronto-based Shred-it International. In exchange, Cintas will receive 42% of the combined company, which will use the Shred-it brand, plus $180 million in cash. To put that in context, Cintas earned $84.6 million, or $0.69 a share, in the quarter ended February 28, 2014.

The partners plan to make this business more profitable by combining plants and pick-up routes. The sale will also let Cintas focus on its larger uniform rental and office cleaning operations.

Cintas is a buy....
PHILIPS ELECTRONICS N.V. ADRs $34 (New York symbol PHG; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 913.3 million; Market cap: $31.1 billion; Priceto- sales ratio: 1.0; Dividend yield: 2.9%; TSINetwork Rating: Average; www.philips.com) has agreed to merge its LED (light emitting diode) lighting product business in Saudi Arabia with local firm General Lighting.

As part of the deal, Philips will also contribute $235 million, which is equal to 42% of the $566 million, or $0.59 per ADR, that it earned in the quarter ended December 31, 2013. In return, Philips will receive a 51% stake in the combined company.

Teaming up with a well-established local firm should help Philips take advantage of fast-growing demand for LED lighting, particularly as the Saudi government aims to cut its energy use.
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QUAKER CHEMICAL CORP. $75 (New York symbol KWR; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 13.2 million; Market cap: $990.0 million; Price-to-sales ratio: 1.4; Dividend yield: 1.3%; TSINetwork Rating: Average; www.quakerchem.com) makes lubricants and chemicals that keep mechanical parts from rusting.

Quaker needs oil to make its products, and rising crude prices have slowed its earnings growth. As well, it gets 60% of its sales from overseas, and the higher U.S. dollar has also weighed on its results.

The company has raised its prices and cut its costs in response. It has also acquired smaller, related firms, which has helped increase its sales and earnings.
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BRIGGS & STRATTON CORP. $22 (New York symbol BGG; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 47.0 million; Market cap: $1.0 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.briggsandstratton.com) is the world’s largest maker of lawn mower engines. The company also makes a variety of other home and garden equipment, such as portable power generators, pressure washers and snow blowers.

In Briggs’s 2014 second quarter, which ended December 31, 2013, its sales fell 5.1%, to $416.6 million from $439.1 million a year earlier.

Sales of engines to manufacturers (61% of total sales) fell 3.1%, mainly because the year-earlier sales benefited from strong generator demand after Hurricane Sandy. A lack of major storms also caused sales of consumer products (39%) to decline 13.2%.
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