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
STANTEC INC. $66.17 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.4 million; Market cap: $3.1 billion; Dividend yield: 1.0%) sells a range of consulting, project delivery, design and technology services. Its clients operate in a variety of industries, including transportation, construction and oil and gas.

The company continues to grow through acquisitions. It just agreed to pay an undisclosed sum for California-based Processes Unlimited International, which has 450 employees in seven offices across California, Texas, Georgia and Tennessee.

Processes Unlimited offers engineering, project management and design services to customers in a wide range of markets, including oil and gas, alternative energy, utilities, food and beverage, packaging, mining and building products.
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SHERRITT INTERNATIONAL $3.02 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 297.3 million; Market cap: $1.0 billion; Dividend yield: 1.3%) has announced that its new Ambatovy mine on the island nation of Madagascar, off Africa’s east coast, has achieved commercial production.

Commercial production is defined as 70% of capacity on average over a 30-day period. Sherritt will now focus on reaching full capacity, which is 60,000 tonnes of nickel and 5,500 tonnes of cobalt a year.

Ambatovy is a joint venture that includes Sherritt, which owns 40% and operates the facility; Sumitomo Corp. and Korea Resources Corp., with 27.5% each; and SNC-Lavalin (a recommendation of The Successful Investor) with 5%.
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CHIPOTLE MEXICAN GRILL $552.18 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.0 million; Market cap: $17.1 billion; No dividends paid) is a Denver-based Mexican restaurant chain.

In the three months ended December 31, 2013, Chipotle’s sales rose 20.7%, to $844.1 million from $699.2 million a year earlier. Chipotle’s restaurants attracted more customers in the latest quarter, which pushed up samerestaurant sales by 9.3%. Per-share earnings gained 31.1%, to $2.57 from $1.96.

The company operates in the fickle and competitive U.S. restaurant market. The shares are now well above their April 2012 high of $442.40 and trade at over 45 times Chipotle’s forecast 2014 earnings of $12.20 a share. That’s a high ratio that leaves the stock vulnerable if the company runs into any short-term problems.
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CALIAN TECHNOLOGIES $19.60 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613- 599-8600; www.calian.com; Shares outstanding: 7.4 million; Market cap: $144.7 million; Dividend yield: 5.7%) 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 December 31, 2013, Calian earned $2.8 million, or $0.38 a share. That’s down 18.4% from $3.4 million, or $0.45, a year ago. Revenue fell 10.5%, to $51.8 million from $57.9 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 6.7%. That hurt Calian’s profit margins, which lowered its earnings.
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COMPUTER MODELLING GROUP $29.37 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 39.0 million; Market cap: $1.2 billion; Dividend yield: 2.6%) 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 three months ended December 31, 2013, Computer Modelling’s revenue rose 14.4%, to $19.2 million from $16.8 million a year earlier. Software licence sales increased, as did consulting and professional services revenue. Earnings rose 17.7%, to $7.2 million from $6.1 million. Per-share earnings gained 18.8%, to $0.19 from $0.16, on fewer shares outstanding.

Computer Modelling holds cash of $64.7 million, or $1.66 a share, and has no debt. It spent $3.8 million, or a high 19.8% of its revenue, on research in the latest quarter.
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AIMIA INC. $19.30 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 173.0 million; Market cap: $3.3 billion; Dividend yield: 3.5%) is buying an unspecified minority stake in Think Big Digital.

This company runs the BIG loyalty program for Malaysian-based AirAsia Berhad and its affiliate, the Tune Group, a hotel operator.

Aimia says it will pay $17 million for its stake, plus an additional $7 million if certain milestones are met by the end of 2015.
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BMTC GROUP $14.45 (Toronto symbol GBT.A; TSINetwork Rating: Extra Risk) (514-648-5757; No website; Shares outstanding: 45.5 million; Market cap: $654.7 million; Dividend yield: 1.7%) is one of Quebec’s biggest retailers of furniture, electronics and appliances, with 33 outlets. It mainly sells these products through its two affiliates: Brault & Martineau and Ameublements Tanguay.

In March 2012, BMTC introduced a new banner, EconoMax, which offers lower-priced products. The company rebranded four outlets that had operated as Brault & Martineau liquidation centres.

It opened four more EconoMax stores in 2013, including in Ste-Eustache and Laval in the latest quarter. In the three months ended September 30, 2013, the company’s sales fell 4.2%, to $187.3 million from $195.6 million a year earlier. It earned $0.34 a share in the latest quarter, down 12.8% from $0.39 a share a year ago.
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LEON’S FURNITURE LTD. $15.43 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 70.6 million; Market cap: $1.1 billion; Dividend yield: 2.6%) built its furniture chain on its four main strengths: a huge selection of furniture, appliances and electronics; a lowest-price guarantee; strong after-sales service; and aggressive TV, radio and print advertising.

The company grew by steadily adding new stores until the March 2013 purchase of its main rival, The Brick, for $700 million.

The Brick operates 234 stores across Canada, while Leon’s has 75 in every province except British Columbia. Leon’s and The Brick will continue to operate as separate chains.
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SYMANTEC CORP. $20.54 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408- 517-8000; www.symantec.com; Shares outstanding: 696.0 million; Market cap: $14.3 billion; Dividend yield: 2.9%) earned $0.51 a share in its fiscal 2014 third quarter, which ended December 27, 2013, up from $0.45 a year earlier.

The gains were mainly due to savings from a new restructuring plan that includes laying off 30% to 40% of its managers and simplifying its product lines.

Revenue fell 4.8%, $1.7 billion from $1.8 billion. That’s mainly because the company is retraining its sales staff as part of its restructuring, and that disrupted their closing of new deals. Even so, the latest revenue beat the consensus forecast of $1.66 billion.
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