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
BROADRIDGE FINANCIAL SOLUTIONS $37.25 (New York symbol BR; TSINetwork Rating: Extra Risk) (201-714-3000; www.broadridge.com; Shares outstanding: 119.2 million; Market cap: $4.5 billion; Dividend yield: 2.3%) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. It processes 90% of all proxy votes in the U.S. and Canada.

Without one-time items, the company earned $31.2 million in its fiscal 2014 second quarter, which ended December 31, 2013. That’s 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.

Overall revenue gained 5.6%, to $520.6 million from $493.2 million. Revenue from contracts that pay recurring fees rose 9% and accounted for two-thirds of the total. The remaining third comes from one-time events, such as special shareholder meetings and distributing information when mutual funds change managers.
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FAIR ISAAC CORP. $52.77 (New York symbol FICO; TSINetwork Rating: Average) (415-472-2211; www.fairisaac.com; Shares outstanding: 34.9 million; Market cap: $1.8 billion; Dividend yield: 0.2%) makes FICO Scores, the computer program that dominates the market for software that businesses use to evaluate customer creditworthiness. The company is also profiting by selling software that helps credit card issuers control fraud and analyze cardholders’ spending patterns.

In its fiscal 2014 first quarter, which ended December 31, 2013, Fair Isaac’s earnings per share before one-time items fell 17.0% from a year ago, to $0.73 from $0.88. Revenue fell 3.0%, to $184.3 million from $190.0 million.

The declines mostly resulted from a strong yearearlier quarter that included a big order from a major customer.
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HECLA MINING $3.44 (New York symbol HL; TSINetwork Rating: Extra Risk) (208-769- 4100; www.hecla-mining.com; Shares outstanding: 342.6 million; Market cap: $1.2 billion) produced 2.5 million ounces of silver in the quarter ended December 31, 2013, up 19.6% from 2.1 million a year earlier. Gold output jumped to 47,108 ounces from 15,563.

Most of Hecla’s silver comes from its Greens Creek mine in Alaska and its Lucky Friday project in Idaho. Its Casa Berardi mine in Quebec supplies its gold.

The company expects to produce 9.5 million to 10 million ounces of silver in 2014, with gold output of 210,000 ounces.
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MART RESOURCES $1.34 (Toronto symbol MMT; TSINetwork Rating: Speculative) (403-270-1841; www.martresources.com; Shares outstanding: 356.6 million; Market cap: $477.8 million; Dividend yield: 14.9%) produces oil at its 50%-held Umusadege field in southern Nigeria’s Niger Delta region.

Last year, the company finished building a central processing facility at Umusadege that can process 35,000 barrels of oil a day. That’s enough to handle the field’s current output and all future production increases.

Meanwhile, Mart is reporting steady cash flow and continues to pay quarterly dividends of $0.05 a share, for a high 14.9% yield.
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TRILOGY ENERGY CORP. $26.56 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290- 2900; www.trilogyenergy.com; Shares outstanding: 99.4 million; Market cap: $3.3 billion; Dividend yield: 1.6%) owns oil and gas properties in central Alberta’s Kaybob and Grande Prairie areas. About 58% of Trilogy’s production is natural gas. The remaining 42% is oil.

In the three months ended September 30, 2013, Trilogy produced 31,211 barrels of oil equivalent a day (including gas), down 6.6% from 33,412 barrels a year earlier. Cash flow per share rose 15.0%, to $0.46 from $0.40, on higher oil prices.

The company plans to spend $375 million on exploration and development this year, down 6.3% from the $400 million it likely spent in 2013. As well, it’s now focusing on its shale oil prospects at Kaybob and spending less on its more mature oil pools in the same area.
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GOODYEAR TIRE & RUBBER CO. $26.56 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 248.1 million; Market cap: $6.6 billion; Dividend yield: 0.8%) has risen almost 9% since we made in our #1 pick for 2014 in the last issue.

The gains came after the company reported strong earnings in the latest quarter. It also announced that it has used its rising profits to add $1.15 billion in cash to its U.S. hourly workers’ defined -benefit pension plan. This plan is now fully funded.

In the quarter ended December 31, 2013, lower North American sales and a stronger U.S. dollar cut Goodyear’s overall sales by 5.0%, to $4.8 billion from $5.0 billion a year earlier.
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TIM HORTONS $57.94 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 147.1 million; Market cap: $8.5 billion; Dividend yield: 2.2%) operates 3,588 coffee-anddonut shops in Canada, 859 in the U.S. and 38 in the Persian Gulf.

In the three months ended December 31, 2013, sales rose 10.7%, to $898.5 million from $811.6 million a year earlier. Same-store sales gained 1.6% at its Canadian outlets and 3.1% in the U.S. Earnings per share, before one-time items, rose 15.9%, to $0.80 from $0.69.

The company aims to extend its lead on competitors like Starbucks and McDonalds. Its plans include simplifying its menu displays and speeding up service, both in-store and at the drive-through. As well, it will likely introduce new items aimed at younger customers, such as milk- and juice-based drinks and healthier options.
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PRECISION DRILLING CORP. $10 (www.precisiondrilling.com) has raised its quarterly dividend by 20.0%, to $0.06 a share from $0.05. The new annual rate of $0.24 yields 2.4%. Volatile oil and gas prices and a lack of pipelines have hurt drilling activity....
TRANSCONTINENTAL INC. $14 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.1 billion; Price-to-sales ratio: 0.5; Dividend yield: 4.1%; TSINetwork Rating: Average; www. tctranscontinental.com) is Canada’s leading printer of flyers, magazines, newspapers and books. This business accounts for 67% of its revenue and 85% of its earnings. The remaining 33% of revenue and 15% of earnings comes from publishing 35 magazines and 175 daily and weekly newspapers.

Advertisers continue to shift to the Internet. That’s why Transcontinental’s revenue fell from $2.2 billion in 2009 to $2.0 billion in 2011 (fiscal years end October 31). In 2012, the company traded its Mexican printing plants for six Canadian facilities. The new plants brought its revenue up to $2.1 billion in both 2012 and 2013.


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