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
Finning sales and shares rising despite lower commodity prices
Stocks in the Manufacturing & Industry sector tend to be more volatile than those in the Finance, Utilities and Consumer sectors. That’s because demand for their products moves up and down with the economy....
ENERFLEX LTD. $15.26 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Dividend yield: 2.0%) rents and sells equipment and services for natural gas production, including compression and processing plants, refrigeration equipment and power generators.

The company has a strong position in three expanding markets: U.S. and Canadian shale gas; Australian natural gas from coal beds; and conventional Middle Eastern natural gas, most of which gets converted to liquefied natural gas (LNG) for shipping worldwide.

In the quarter ended September 30, 2013, Enerflex’s revenue rose 5.7%, to $390.7 million from $369.7 million a year ago. However, earnings per share fell 37.0%, to $0.17 from $0.27, mostly due to cost overruns on three international projects.
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TOROMONT INDUSTRIES LTD. $25.40 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667- 5511; www.toromont.com; Shares outstanding: 76.7 million; Market cap: $2.0 billion; Dividend yield: 2.1%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. It also makes refrigeration systems through its CIMCO division.

The company completed the spinoff of Enerflex Ltd. (see right) in July 2011. Shareholders received shares of both the new Toromont Industries and Enerflex.

In the three months ended September 30, 2013, higher equipment sales and rentals, particularly to mining, construction and agriculture customers, pushed up Toromont’s revenue by 20.0%, to $498.3 million from $415.0 million a year earlier.
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AASTRA TECHNOLOGIES $44.59 (Toronto symbol AAH; TSINetwork Rating: Speculative) (905-760-4200; www.aastra.com; Shares outstanding: 11.8 million; Market cap: $531.1 million; Dividend yield: 1.8%) reports that its shareholders have approved a friendly takeover offer by Mitel Networks (symbol MNW on Toronto). Mitel’s shareholders have also approved the deal, which is expected to close soon.

Mitel is paying $6.52 U.S. in cash and 3.6 Mitel common shares for each Aastra share. Based on today’s price for Mitel stock, the offer is worth $44.87 per Aastra share.

Aastra shareholders will own 43% of the combined company, which will have over $1 billion in sales. The new firm will be a strong competitor in global business communications: it will have the largest share of the Western European market and will be No.3 in North America, behind Cisco and Avaya.
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TIM HORTONS $60.25 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 147.1 million; Market cap: $8.9 billion; Dividend yield: 1.7%) continues to successfully launch new products to take advantage of consumer trends. The latest is its diet-conscious Turkey Sausage Breakfast Sandwich.

This sandwich sells for $3.29 and can be ordered with egg and cheese on a toasted English muffin. Served this way, it contains 330 calories and 14 grams of fat. Customers can lower these amounts to 280 calories and nine grams of fat by ordering the sandwich with an egg-white option.

The breakfast market is extremely important to Tims: it served 208 million breakfast sandwiches in 2012 alone, and an estimated two-thirds of Canadians who buy breakfast at a restaurant choose Tim Hortons.
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NISSAN MOTOR (ADR) $18.42 (Nasdaq symbol NSANY; TSINetwork Rating: Above Average) (310- 771-3111; www.nissan-global.com; Shares outstanding: 2.3 billion; Market cap: $41.5 billion; No dividends paid) continues to profit from rising sales in China.

Sales of all car brands rose 15.7% in China in 2013, to 17.9 million vehicles. Sales were particularly strong in December 2013, at 2.1 million vehicles, about 17% higher than December 2012.

Nissan reports that its Chinese sales jumped 70.4% in December 2013, to a record 134,200 vehicles. That raised its total 2013 sales in the country by 17.2%, to 1.3 million.
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DOREL INDUSTRIES $41.21 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 31.5 million; Market cap: $1.3 billion; Dividend yield: 3.0%) has agreed to buy 100% of Tiny Love Ltd., a maker of baby products and developmental toys based in Tel Aviv, Israel, for an undisclosed sum.

Tiny Love has won awards in the developmental toy category, which includes products like activity gyms, mobiles and toys for babies and toddlers.

The company sells these products in over 50 countries and had about $45 million U.S. of revenue in 2013. To put that in perspective, Dorel’s sales were $607.3 million U.S. in the three months ended September 30, 2013. Tiny Love is also profitable, with strong cash flow.
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SHERRITT INTERNATIONAL $3.71 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 297.3 million; Market cap: $1.1 billion; Dividend yield: 4.6%) has announced that it plans to sell all of its coal interests. Two buyers will pay a total of $793 million in cash and assume $153 million of leases.

These sales will let Sherritt focus on its nickel, cobalt and oil interests and pay down some of its $2.1-billion debt.

Separately, the company will hold a special shareholders’ meeting on May 6 in response to a request from activist investment firm Clarke Inc. (symbol CKI on Toronto), which owns 5.2% of Sherritt’s shares.
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AMERIGO RESOURCES $0.49 (Toronto symbol ARG; TSINetwork Rating: Speculative) (604-681-2802; www.amerigoresources.com; Shares outstanding: 172.3 million; Market cap: $84.4 million; No dividends paid) processes copper and molybdenum from waste rock at Chile’s El Teniente, the world’s largest copper mine. This contract runs at least through 2037. Amerigo also has an agreement to process material from the nearby Cauquenes tailings pond.

Amerigo gets 94% of its revenue by processing copper. The remaining 6% comes from molybdenum.

A landslide in one of Amerigo’s production areas has hurt its copper and molybdenum production. In the quarter ended September 30, 2013, copper production fell 13.1%, to 11.04 million pounds from 12.70 million a year earlier. Molybdenum output declined 40.0%, to 193,138 pounds from 321,788.
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