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
CAE $12 (www.cae.com) has won a contract to build three simulators for the Royal Australian Air Force, which will use this equipment to train pilots to fly Hawk Mk-127 fighter jets. CAE did not say how much this contract is worth, but it will deliver these simulators in 2016 and 2017....
IGM FINANCIAL INC. $49 (www.igmfinancial.com) reported that it had $124.8 billion of assets under management on August 31, 2013. That’s up 6.0% from $117.7 billion a year earlier. Improving stock markets were the main reason for the rise. IGM’s fee income rises and falls with the value of the mutual funds and other securities it manages, so the company’s revenue and earnings benefit when the value of these assets increases....
METRO INC. $67 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 93.1 million; Market cap: $6.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.metro.ca) operates about 600 supermarkets in Quebec and Ontario. It also has over 250 drugstores under the Brunet, The Pharmacy and Drug Basics banners.

Metro has aggressively cut costs and improved its efficiency in response to rising competition from larger Canadian chains like Loblaw and Sobeys, as well as big U.S. retailers like Wal-Mart and Costco. It also upgraded its stores and lowered its advertising costs by converting its various banners in Ontario to the Metro and Food Basics brands.


...
ENBRIDGE INC. $42 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 1.0 billion; Market cap: $42.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) has opened its first geothermal power plant. This facility, which is located near Vale, Oregon, taps into heat from the earth’s core to generate electricity.

Enbridge paid $23.8 million for a 20% stake in this plant. U.S. Geothermal Inc. (New York symbol HTM) owns the other 80%.

Power from geothermal plants is much more reliable than solar and wind projects. That cuts the risk of this investment. As well, the plant has a 25-year deal to sell its electricity to Idaho’s power grid.
...
DUNDEE CORP. $19 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 54.1 million; Market cap: $1.0 billion; Price-to-sales ratio: 2.2; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) is a holding company with investments in wealth management, real estate, natural resources and agriculture.

In the three months ended June 30, 2013, Dundee lost $69.3 million, or $1.32 a share. However, that’s a big improvement over the $133.6 million, or $2.47 a share, it lost a year earlier. That’s because the company had fewer losses from its investment portfolio. Revenue rose 2.0%, to $48.0 million from $47.1 million.

Dundee is a buy....
SNC-LAVALIN GROUP INC. $41 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.6 million; Market cap: $6.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Average; www.snclavalin.com) is selling 66% of its stake in the Astoria II gas-fired electrical power plant near New York City.

The company did not say how much it would receive for this interest. However, it paid $70 million U.S. for a 20% stake in this facility in 2009.

The sale is part of SNC’s plan to sell some of its less important investments in concessions, which are rights that governments grant to run public facilities. The company will use the cash from these sales to focus on engineering projects in areas with greater potential, including mining, oil and gas, and water treatment projects.
...
GREAT-WEST LIFECO INC. $30 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $33.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) earned $521 million in the three months ended June 30, 2013, up 6.8% from $488 million a year earlier. Due to fewer shares outstanding, earnings per share rose 7.8%, to $0.55 from $0.51. The company ended the quarter with $595.7 billion of assets under administration, up 13.8% from $523.5 billion a year earlier.

Demand for insurance and wealth management services rose in Canada (53% of earnings) and Europe (33%). However, higher salaries and other costs increased losses at its Putnam mutual fund business at its U.S. division (14%).

On July 18, 2013, Great-West completed its $1.75-billion purchase of Irish Life Group, Ireland’s largest pension manager and life insurance provider, with $50 billion of assets under management. The purchase should add $0.10 a share to Great-West’s 2014 earnings.
...
TIM HORTONS INC. $58 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 151.0 million; Market cap: $8.8 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.8%; TSINetwork Rating: Average; www.timhortons.com) has opened its first coffee-and-donut store in Kuwait under its franchise deal with Dubai-based Apparel Group. This is the company’s 32nd store in the Persian Gulf. It also has 3,468 stores in Canada and 807 in the U.S.

In February 2011, Tim Hortons signed a master license agreement with the Apparel Group to open 120 outlets in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman over a five-year period. Teaming up with well-established local companies like Apparel Group cuts the risk of expanding in unfamiliar markets.

Tim Hortons is a buy....
ANDREW PELLER LTD. $14 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.3 million; Market cap: $200.2 million; Price-to-sales ratio: 0.7; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest producer of wines, after Vincor International. The company has wineries in Nova Scotia, Ontario and British Columbia.

In the first quarter of its 2014 fiscal year, which ended June 30, 2013, Peller’s sales were flat at $72.7 million. The company continues to see strong demand for premium wines and brands it sells under licence, such as Wayne Gretzky wines. However, sales of home wine kits declined.

Earnings rose 10.6%, to $5.1 million from $4.6 million. Per-share earnings gained 12.1%, to $0.37 from $0.33. The company benefited from hedging contracts that it uses to lock in foreign exchange rates; that was the main reason for the higher earnings. Without these hedges, Peller’s earnings would have gained 0.2%.
...