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
SYMANTEC CORP. $23.62 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 696.0 million; Market cap: $16.2 billion; Dividend yield: 2.5%) sells computer security technology, including anti-virus and emailfiltering software, to businesses and consumers. It also offers data-archiving software.

In Symantec’s fiscal 2014 second quarter, which ended September 27, 2013, its earnings rose 11.6%, to $355 million, or $0.50 a share. A year earlier, it earned $318 million, or $0.45.

Savings from Symantec’s new restructuring plan were behind the gains. This initiative includes laying off 30% to 40% of its managers and simplifying its product lines.
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WESTJET $26.99 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 129.4 million; Market cap: $3.5 billion; Dividend yield: 1.5%) was our #1 pick for 2013 at $22.29.

The stock dipped as low as $19.65 in July, but it went on to rise to an all-time high of $28.99. It’s now up 21.1%.

The company has a modern, fuel-efficient fleet and a low cost structure. Its new Canadian regional airline, WestJet Encore, adds growth prospects.
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ALIMENTATION COUCHE-TARD $81.60 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $15.4 billion; Dividend yield: 0.5%) was our #1 pick for 2012 at $30.55. Its shares are now up a whopping 167.1%.

The company continues to introduce more-profitable products at its North American stores, including improved fresh and takeout food. There is lots of potential to sell similar items through the Statoil chain in Norway, which it bought in June 2012.

Alimentation Couche-Tard is still a buy.
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GOODYEAR TIRE & RUBBER CO. $24.42 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 246.9 million; Market cap: $6.0 billion; Dividend yield: 0.8%) is the world’s largest tire maker, with 52 plants in 22 countries.

In the quarter ended September 30, 2013, the sluggish global economy cut Goodyear’s sales by 5.0%, to $5.0 billion from $5.3 billion a year earlier. North American sales fell 9.1%, to $2.2 billion from $2.4 billion. Sales also declined 9.2% in Asia. That offset a slight increase in Europe and a 1.3% rise in Latin America.

However, earnings per share climbed sharply, to $0.68 from $0.45. The higher profits came from the company’s North American operations, which sold more replacement tires (they’re more profitable than new factory-installed car tires), and cut its costs.
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Our investment advice is that your in-the-limelight holdings are the ones you need to watch most closely. When investor expectations are high, it pays to be skeptical and wary.
Canadian pharma stock
red and yellow pills on white background
Pat McKeough responds to many requests from members of his Inner Circle for specific stock picks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle. Last week we had a question from an Inner Circle members about one of the rare pharmaceutical stocks in Canada. Valeant Pharmaceuticals was purchased in 2010 by Biovail, then Canada’s largest pharmaceutical firm, and the new company adopted the Valeant name. The company has an aggressive policy of growing by acquisition—it made over a dozen in 2012 alone—and Pat examines several of its recent acquisitions and assesses the overall risks and rewards of this growth strategy. ...
PEYTO EXPLORATION & DEVELOPMENT CORP. $31.51 (Toronto symbol PEY; Shares outstanding: 148.5 million; Market cap: $4.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.1%; www.peyto.com) produces and explores for oil and natural gas in Alberta. Its average daily production of 56,343 barrels of oil equivalent is 89% gas and 11% oil.

In the quarter ended September 30, 2013, Peyto’s cash flow rose 24.1%, to $0.67 a share from $0.54 a year earlier. That’s because Peyto raised its production by 22.4%. Gas prices also gained 16.0%, to an average of $2.97 per thousand cubic feet from $2.56, while oil prices rose 17.8%, to $89.46 a barrel from $75.88.

The company has started up three gas plants since the quarter ended. That has let it activate 25 new wells, pushing up its production from 60,000 barrels a day to 70,000.
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PENN WEST PETROLEUM $9.14 (Toronto symbol PWT; Shares outstanding: 488.1 million; Market cap: $4.4 billion; TSINetwork Rating: A v e r a g e ; D i v i d e n d y i e l d : 6 . 1 % ; www.pennwest.com) is one of Canada’s largest oil and gas producers.

Penn West continues to shore up its finances and take steps to boost its value since appointing Rick George as chairman and Allan Markin as vice-chairman. These moves include cutting staff, selling assets and lowering its dividend.

The company now plans to sell a further $1.5 billion to $2 billion of assets by the end of 2014. It expects to close about $485 million of these deals by the end of this year. The company will use the proceeds to further pay down its debt.
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BCE INC. $46.67 (Toronto symbol BCE; Shares outstanding: 775.9 million; Market cap: $36.2 billion; TSINetwork Rating: Above Average; Dividend yield: 5.0%; www.bce.ca) is selling four of its specialty TV channels: Family Channel, Disney XD and the English and French Disney Junior stations. The buyer is DHX Media (Toronto symbol DHX).

The company acquired these channels as part of its $3.3-billion purchase of Astral Media in July 2013. Selling them will help BCE comply with conditions that regulators imposed as part of that deal.

If regulators approve, BCE will receive $170 million for these four channels. The company aims to complete the sale in 2014.
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