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
WYNDHAM WORLDWIDE $59.05 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 140.3 million; Market cap: $8.3 billion; Dividend yield: 1.6%) is one of the world’s largest hospitality companies, with 7,380 franchised hotels worldwide.

In addition to hotels, Wyndham manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has over 106,000 vacation rental properties worldwide.

In the three months ended March 31, 2013, the hotel and resort operator’s revenue rose 9.4%, to $1.13 billion from $1.04 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 occupancy rate by 2.4%.
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ATLANTIC TELE-NETWORK $54 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 15.7 million; Market cap: $855.6 million; Yield: 1.9%) expects to soon complete the sale of its Alltel wireless business to AT&T (symbol T on New York) for cash of $780 million. In April 2010, Atlantic bought Alltel from Verizon Wireless for just $223 million.

In the three months ended March 31, 2013, Atlantic’s revenue fell 5.6%, to $172.9 million from $183.1 million a year earlier. Alltel accounted for $108.0 million of revenue in the latest quarter, and slowed in the latest quarter. Earnings fell 5.8%, to $8.8 million, or $0.56 a share, from $9.3 million, or $0.60 a share.

After the sale, Atlantic Tele-Network will still have telecom operations in the U.S. southwest, New England, New York State, Guyana, Bermuda and portions of the Caribbean islands.
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BELLATRIX EXPLORATION $6.74 (Toronto symbol BXE; TSINetwork Rating: Speculative) (403-266-8670; www.bellatrixexploration.com; Shares outstanding: 107.9 million; Market cap: $715.5 million; No dividends paid) has entered into a joint venture agreement with Grafton Energy that should speed up the development of its Cardium shale oil deposits in Alberta.

Under the agreement, Grafton will pay Bellatrix $100 million. In return, it will get 54% of the production from a 29-well, $122- million drilling program. Grafton will receive this share of the wells’ output until it earns back its $100 million, plus an 8% return on its original investment. It will then hold a 33% interest in each well.

On top of that, Bellatrix plans to spend a total of $210 million to $220 million on exploration and development this year.
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TRILOGY ENERGY CORP. $29.90 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290- 2900; www.trilogy.com; Shares outstanding: 91.7 million; Market cap: $3.5 billion; Dividend yield: 1.4%) owns oil and gas properties in the Kaybob and Grande Prairie areas of central Alberta. About 54% of Trilogy’s production is natural gas. The remaining 46% is oil.

In the three months ended March 31, 2013, Trilogy produced 36,119 barrels of oil equivalent per day (including gas), up 3.2% from 35,014 barrels a year earlier. Cash flow per share was unchanged at $0.67.

Trilogy pays out just 15% of its cash flow as dividends. That gives it a low 1.4% yield, but it’s also letting the company maintain an active drilling program. In the first quarter of 2013, Trilogy spent $169 million on exploration and development, down 6.3% from $180.4 million a year earlier. The company drilled 35 wells, up from 31.
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ZARGON OIL & GAS $6.39 (Toronto symbol ZAR; TSINetwork Rating: Speculative) (403-264-9992; www.zargon.ca; Shares outstanding: 30.0 million; Market cap: $189.3 million; Dividend yield: 11.3%) produces natural gas and oil in Alberta, Manitoba, Saskatchewan and North Dakota. The company’s production is 67% oil and 33% gas.

In the three months ended March 31, 2013, Zargon produced 7,648 barrels of oil equivalent per day, down 13.4% from 8,834 barrels a year earlier. Cash flow per share was unchanged at $0.46.

Zargon expects cash flow of $2.03 a share in 2013. It trades at 3.1 times that estimate. But cash flow could fall to $1.60 a share in 2014. The shares yield a high 11.3%.
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ALARMFORCE $9.86(Toronto symbol AF; TSINetwork Rating: Speculative) (1-800-267- 2001; www.alarmforce.com; Shares outstanding: 12.2 million; Market cap: $122.3 million; Dividend yield: 1.0%) has completed the strategic review of business opportunities that it launched in August 2012. This process included a possible sale of the company.

The review did not result in a takeover offer that the company felt reflected its value. As a result, it will now focus on growth.

AlarmForce’s outlook is bright, and it has potential to grow by offering new services to its subscribers. That includes its VideoRelay system, which lets users watch their homes through computers and smartphones.
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strong>DOREL INDUSTRIES $38.10 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 31.5 million; Market cap: $1.2 billion; Dividend yield: 3.2%) makes a wide range of products, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational products, mainly bicycles.

In the three months ended March 31, 2013, Dorel’s sales fell 4.3%, to $594.2 million from $621.1 million a year earlier (all figures except share price and market cap in U.S. dollars). Earnings per share fell 23.1%, to $0.70 from $0.91.

In mid-June, the company said that it expects its results to remain weak for the quarter ended June 30, 2013. That’s because poor weather across the U.S., Canada and Europe has led to lower-than-expected sales volumes, particularly for bicycles, which supply 34% of Dorel’s overall sales. The slowdown has also prompted the company’s competitors in the bicycle industry to cut their prices.
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STANTEC INC. $46.56 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.2 million; Market cap: $2.1 billion; Dividend yield: 1.4%) sells a range of consulting, project delivery, design and technology services. Its clients operate in a variety of industries, including transportation, construction and oil and gas.

In the three months ended March 31, 2013, Stantec’s revenue rose 17.7%, to $513.2 million from $436.2 million a year earlier. Acquisitions were one reason for the increase. Stantec is also working on several new projects. Earnings gained 13.7%, to $28.4 million, or $0.62 a share, from $25.0 million, or $0.55 a share.

The company continues to grow by acquisition, with seven purchases in 2012. Its most recent addition was Roth Hill, a 30-person firm that designs systems for collecting and treating water and wastewater. Stantec sees major growth potential in the water industry.
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REITMANS (CANADA) LTD. $8.99 (Toronto symbol RET.A; TSINetwork Rating: Extra Risk) (514-384-1140; www.reitmans.com; Shares outstanding: 64.6 million; Market cap: $560.8 million; Dividend yield: 8.9%) has reached an agreement with Sears Canada to sell its Penningtons clothing in Sears’ stores.

The Penningtons chain sells plus-sized clothing, starting at size 14, that aims to be both fashionable and affordable. It consists of 156 stores.

Under the deal, Reitmans will start selling Penningtons’ clothes in five Sears stores with about 4,000 square feet of space each and online at sears.ca. It will introduce it in additional Sears stores in 2014.

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