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
GOOGLE INC. $1,220 (Nasdaq symbol GOOG; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 336.1 million; Market cap: $410.0 billion; Price-to-sales ratio: 6.9; No dividends paid; TSINetwork Rating: Above Average; www.google.com) continues to launch new services to cut its reliance on Internet search.

For instance, it now offers TV and Internet access through its own fibre optic networks in Kansas City, Missouri, Austin, Texas and Provo, Utah. Google’s networks are up to 100 times faster than its rivals’, and it’s considering expanding them to 34 more cities.

More users are watching video-streaming services like Google’s YouTube. As a result, Internet providers want video sites to pay more to compensate for the heavy demand this puts on their networks. Owning its own broadband service strengthens Google’s bargaining position.
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AMEREN CORP. $40 (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 242.6 million; Market cap: $9.7 billion; Price-to-sales ratio: 1.5; Dividend yield: 4.0%; TSINetwork Rating: Average; www.ameren.com) has received regulatory approval to build a 644-kilometre, $1.1-billion power line in central Illinois. The project will make the state’s power grid more reliable when it’s finished in 2019.

Meanwhile, the company earned $512 million in 2013, down 0.8% from $516 million in 2012. Due to more shares outstanding, earnings per share fell 1.4%, to $2.10 from $2.13. That’s mainly because the company had to shut down a nuclear reactor for refueling. Higher power rates raised its revenue by 1.0%, to $5.84 billion from $5.78 billion.

Ameren is a hold....
CEDAR FAIR L.P. $53 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.7 million; Market cap: $3.0 billion; Price-to-sales ratio: 2.7; Dividend yield: 5.3%; TSINetwork Rating: Average; www.cedarfair.com) owns 11 amusement parks, three outdoor water parks, one indoor water park and five hotels.

In 2013, the partnership earned a record $108.2 million, or $1.94 a unit. That’s up 6.2% from $101.9 million, or $1.81 a unit, in 2012. Revenue rose 6.3%, to a record $1.14 billion from $1.07 billion.

These gains are mainly because guests spent an average of 5.2% more at its parks. Out-of-park revenue (mainly from hotel rooms and food) rose 6.3%. The partnership’s parks and hotels attracted 23.5 million guests in 2013, up 0.9%.
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BUCKEYE PARTNERS L.P. $75 (New York symbol BPL; Income Portfolio, Utilities sector; Units outstanding: 123.2 million; Market cap: $9.2 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.8%; TSINetwork Rating: Average; www.buckeye.com) operates over 9,600 kilometres of pipelines in the northeastern and midwestern U.S. Its network pumps gasoline, jet fuel and other petroleum products. The partnership also owns oil and gas storage terminals.

Buckeye continues to expand by acquisition. In December 2013, it bought 19 oil-storage terminals on the U.S. east coast and one on the Caribbean island of St. Lucia from Hess Corp. (New York symbol HES). It now has over 120 terminals.

These assets cost Buckeye $850 million. To put that in context, it earned $351.6 million in 2013. That’s up 49.1% from $235.9 million in 2012, which included a $60.0- million charge for a pipeline closure. Earnings per unit rose 36.3%, to $3.23 from $2.37, on more units outstanding.
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FORD MOTOR CO. $15 (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 4.0 billion; Market cap: $60.0 billion; Price-to-sales ratio: 0.4; Dividend yield: 3.3%; TSINetwork Rating: Extra Risk; www.ford.com) sold 2.5 million vehicles in the U.S. in 2013, up 10.8% from 2.25 million in 2012. Truck sales supplied 38% of the 2013 total and rose 13.0%, followed by cars (34%, up 10.0%) and SUVs (28%, up 9.1%).

Thanks to its improving outlook, Ford recently raised its dividend by 25.0%. The new annual rate of $0.50 a share yields 3.3%. The stock also trades at a low 9.9 times the $1.51 a share that the company will probably earn in 2014.

Ford is a buy....
HONDA MOTOR CO. LTD. ADRs $36 (New York symbol HMC; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.8 billion; Market cap: $64.8 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.honda.com) is Japan’s secondlargest carmaker and the world’s biggest motorcycle manufacturer.

In 2013, the company sold 1.53 million cars and trucks in the U.S., up 7.2% from 1.42 million in 2012. Honda continues to see strong demand for its Civic compact and Accord sedan. As well, it sold over 300,000 of its CR-V sport utility vehicles for the first time in its history.

The company recently launched new motorcycle models in fast-growing markets like India and Indonesia. (Asia accounts for 87% of Honda’s worldwide motorcycle sales.)
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TOYOTA MOTOR CO. ADRs $116 (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.6 billion; Market cap: $185.6 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.toyota.com) is the world’s biggest carmaker by sales. It also makes industrial equipment, such as forklifts and prefabricated housing. Like most automakers, the company offers vehicle loans through its financing division.

In 2013, Toyota sold 2.24 million cars and trucks in the U.S., up 7.4% from 2.08 million in 2012. That’s partly due to strong demand for its hybrid cars, which use gasoline and electricity. The company has sold 6.1 million of these vehicles since it started offering them in 1997.

Toyota now sells 24 hybrid car models and one plug-in version in over 80 countries. Over the next two years, it plans to launch 15 new hybrids, which should help it maintain its leading 50% share of this fastgrowing market.
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HEWLETT-PACKARD CO. $30 (New York symbol HPQ; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.9 billion; Market cap: $57.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; TSINetwork Rating: Average; www.hp.com) is starting to benefit from a major restructuring that includes merging its computer and printing divisions and cutting 11% of its workforce.

In its fiscal 2014 first quarter, which ended January 31, 2014, earnings before unusual items rose 8.5%, to $1.7 billion from $1.6 billion a year earlier. Earnings per share rose 9.8%, to $0.90 from $0.82, on fewer shares outstanding.

Revenue in the quarter fell 0.7%, to $28.2 billion from $28.4 billion. Sales of computers rose 4% during the busy Christmas shopping season. However, printer sales fell 2%. Sales of servers and software to businesses also declined.

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MOLSON COORS BREWING CO. $57 (New York symbol TAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 184.2 million; Market cap: $10.5 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.6%; TSINetwork Rating: Average; www.molson coors.com) continues to make progress integrating StarBev LP, which it bought for $3.4 billion in June 2012. StarBev owns nine breweries in central and eastern Europe.

In 2013, Molson Coors’ earnings rose 2.3%, to $727.1 million from $710.5 million in 2012. Due to more shares outstanding, earnings per share gained 1.0%, to $3.95 from $3.91. Sales rose 7.4%, to $4.2 billion from $3.9 billion.

Molson Coors is doing a good job absorbing StarBev, and cutting costs at its existing businesses. In 2013, it lowered its expenses by $113 million.

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