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
SHERRITT INTERNATIONAL $3.70 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 296.9 million; Market cap: $1.1 billion; Dividend yield: 4.7%) is a diversified natural resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 356 megawatts of power generation capacity in Cuba, with an additional 150 megawatts starting up this year.

The company is a major nickel producer, with operations in Cuba and Canada. As well, it has started up its 40%-owned Ambatovy mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and is Canada’s largest thermal coal producer.

In the three months ended June 30, 2013, Sherritt’s revenue fell 10.2%, to $338.5 million from $377.1 million a year earlier. Lower nickel, cobalt and coal prices were the main reasons for the drop. Cash flow per share declined 10.0%, to $0.18 from $0.20.
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AIMIA INC. $15.80 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 172.5 million; Market cap: $2.7 billion; Dividend yield: 4.3%) has finalized its deal for TD Bank to become the primary credit card issuer for Aeroplan, Aimia’s main loyalty program.

TD and Aimia are also negotiating a new agreement with Canadian Imperial Bank of Commerce, which has been Aimia’s banking partner in the Aeroplan program for the past 22 years.

This agreement would let CIBC sell around half of its existing Aeroplan accounts to TD. That would cut the risk of these clients switching to other loyalty plans or banks.
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NISSAN MOTOR CO. (ADR) $20.32 (Nasdaq symbol NSANY; TSINetwork Rating: Above Average) (310-771-3111; www.nissan-global.com; Shares outstanding: 2.3 billion; Market cap: $46.6 billion; No dividends paid) is reviving its dormant Datsun brand with the launch of an under-$6,700 hatchback in India. Other Datsun models will follow over the next three years.

The company will use the Datsun name to compete for sales of lower-cost cars in emerging markets, partly to avoid tarnishing its Nissan brand’s reputation for higher-quality vehicles.

The reintroduction also puts Nissan in a good position to profit from rising car demand in other emerging markets, such as Russia, Southeast Asia, Latin America, the Middle East and Africa.
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WYNDHAM WORLDWIDE $58.84 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 133.0 million; Market cap: $8.0 billion; Dividend yield: 2.0%) reported higher revenue and earnings in the latest quarter.

In the three months ended June 30, 2013, the hotel and resort operator’s revenue rose 10.0%, to $1.25 billion from $1.14 billion a year earlier. The company gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up Wyndham’s average occupancy rate slightly, to 55.2%.

Before one-time items, earnings rose 12.6%, to $0.98 a share from $0.87. The company continues to buy back its stock. In the latest quarter, it repurchased 2.9 million shares for $175 million. In 2012, it bought back 12.9 million shares for $623 million.
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ALARMFORCE $10.01 (Toronto symbol AF; TSINetwork Rating: Speculative) (1-800-267-2001; www.alarmforce.com; Shares outstanding: 12.2 million; Market cap: $122.7 million; Div. yield: 1.0%) has fired Joel Matlin, its long-time and high-profile president and CEO.

AlarmForce recently completed the strategic review of business opportunities that it launched in August 2012. That review included a possible sale of the company. The process did not result in a takeover offer that AlarmForce was willing to accept.

The firing may be related to the company’s failure to find a buyer. Or it may reflect the fact that AlarmForce’s growth in Canada has slowed—it added just 700 new subscribers in the last six months.
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DELPHI ENERGY $1.39 (Toronto symbol DEE; TSINetwork Rating: Speculative) (403-265-6171; www.delphienergy.ca; Shares outstanding: 153.1 million; Market cap: $211.3 million; No dividends paid) explores for oil and natural gas in Alberta and B.C. Gas makes up 72% of Delphi’s daily output; the remaining 28% is oil.

In the three months ended June 30, 2013, Delphi’s average daily output fell 11.6%, to 7,635 barrels of oil equivalent (including gas) from 8,636 barrels a year earlier. Disruptions at third-party processing facilities, which cut the company’s output by 1,495 barrels a day, were the main reason for the decline. Those issues are now resolved.

Higher oil and prices offset the lower output, and that kept cash flow unchanged at $0.05 a share.
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strong>CALIAN TECHNOLOGIES $18.36 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613-599-8600; www.calian.com; Shares outstanding: 7.5 million; Market cap: $138.4 million; Dividend yield: 6.1%) earned $0.43 a share in the three months ended June 30, 2013, down 4.4% from $0.45 a year ago. Revenue fell 2.1%, to $58.1 million from $59.3 million.

Fewer orders from Canadian federal government departments hurt results in the latest quarter. Still, Calian is well positioned to wait for a rebound in government orders, with cash of $31.3 million, or $4.17 a share, and no debt. Its dividend, which now yields a very high 6.1%, also looks safe.

Calian Technologies is still a buy....
BELLATRIX EXPLORATION $6.97 (Toronto symbol BXE; TSINetwork Rating: Speculative) (403-266- 8670; www.bellatrixexploration.com; Shares outstanding: 107.9 million; Market cap: $756.5 million; No dividends paid) produces natural gas (70% of output) and oil (30%) in Alberta, B.C. and Saskatchewan.

Bellatrix continues to enter into joint ventures to speed up the development of its Cardium shale oil deposits in west-central Alberta.

It has agreed to sell a 50% interest in its producing wells in the Ferrier and Willesden Green area to Daewoo International Corp. and Devonian Natural Resources Private Equity Fund for $52.5 million.
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WESTJET AIRLINES $21.66 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1- 877-493-7853; www.westjet.com; Shares outstanding: 118.4 million; Market cap: $2.8 billion; Dividend yield: 1.9%) reports that its earnings rose 5.2% in the three months ended June 30, 2013, to a record $44.7 million from $42.5 million a year earlier.

Earnings per share rose 9.7%, to $0.34 from $0.31, on fewer shares outstanding. Revenue increased 4.3%, to $843.7 million from $809.3 million.

Demand for WestJet’s flights remains high, and it continues to enter into partnerships with other airlines. The launch of West- Jet Encore, its new regional airline, has also gone well. All of these strengths should keep WestJet’s revenue—and profits—growing.
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