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.

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IMPERIAL METALS $11.16 (Toronto symbol III; TSINetwork Rating: Speculative) (604-669-8959; www.imperialmetals.com; Shares outstanding: 74.4 million; Market cap: $803.6 million) is a Vancouver-based mining firm that produces and explores for base and precious metals. Its producing assets include two B.C. mines: 100%-owned Mount Polley (copper and gold) and 50% of Huckleberry (copper and molybdenum). Japan’s Mitsubishi Materials owns 31.1% of Huckleberry, and Furukawa Co., Dowa Holdings and Marubeni Corp. own 6.3% each.

Imperial restarted Mount Polley in 2005. It continues to explore around the known deposit to increase the mine’s reserves and lengthen its life. Right now, Imperial expects Mount Polley to produce until mid- 2023.

The company is also developing its Red Chris copper/ gold property in northwestern B.C. and could start up an open-pit mine as early as late 2014. The property holds as much as 9 billion pounds of copper and 13.8 million ounces of gold.
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strong>YAMANA GOLD $10.43 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.- yamana.com; Shares outstanding: 752.4 million; Market cap: $8.1 billion; Dividend yield: 2.5%) owns eight operating gold mines in Mexico, Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina and has a number of other properties in advanced stages of development.

In the quarter ended March 31, 2013, Yamana’s revenue fell 4.4%, to $534.9 million from $559.7 million a year earlier (all figures except share price and market cap in U.S. dollars). Gold production rose, but prices for gold, as well as copper and silver, which are both significant by-products of Yamana’s gold mining, dropped. Cash flow per share fell 3.3%, to $0.29 from $0.30.

Yamana held a high cash balance of $342.6 million, or $0.46 a share, on March 31. Its $860.5 million of debt is just 10.6% of its market cap. The shares yield 2.5%.
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CHESAPEAKE ENERGY $21.75 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848- 8000; www.chkenergy.com; Shares outstanding: 666.5 million; Market cap: $14.5 billion; Dividend yield: 1.6%) is the second-largest natural gas producer in the U.S.

Chesapeake continues to sell assets to meet its debt-reduction targets—it’s now selling properties in the Eagle Ford and Haynesville shale formations to Exco Resources for $1 billion.

With this deal, Chesapeake has now sold $3.6 billion of properties this year. By the end of 2013, it aims to raise that to $6 billion to $7 billion. These sales, plus its cash flow from production, will let it pay for its planned 2013 exploration and development spending of $7.6 billion.
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AIMIA INC. $15.12 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 172.5 million; Market cap: $2.6 billion; Dividend yield: 4.5%) owns and operates Aeroplan, Canada’s largest loyalty program, with over 4.6 million members. It also owns Nectar, the U.K.’s biggest loyalty program. In addition, Aimia has interests in Air Miles Middle East and Nectar Italia, as well as Club Premier, the leading loyalty program in Mexico.

In the three months ended March 31, 2013, Aimia’s revenue rose 7.4%, to $609.5 million from $567.7 million a year earlier. Excluding one-time items, earnings per share fell 12.9%, to $0.27 from $0.31. The earnings decline was due to an increase in the company’s cost per mile, mostly because its expenses rose as it expanded its operations.

TD Bank has just agreed to become the main credit card issuer for Aeroplan. Under a new 10-year deal that will begin January 1, 2014, TD will launch new credit cards under the Aeroplan banner, including cards for frequent flyers and small businesses. TD will also pay Aimia $100 million at the start of the deal and commit to buying a minimum number of Aeroplan miles from Aimia for the first three years. In addition, the partners will spend a total of $140 million in the first four years to promote these new cards and rewards.
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New plants, new contracts key to keeping printing business profitable for Transcontinental
TRANSCONTINENTAL INC. (Toronto symbol TCL.A; www.tctranscontinental.com) gets 68% of its revenue from its commercial printing business, which is the largest in Canada. The remaining 32% comes from publishing newspapers and magazines. In its 2013 second quarter, which ended April 30, 2013, Transcontinental’s revenue fell 0.2%, to $521.3 million from $522.4 million a year earlier. Revenue from six recently acquired printing plants in Canada helped offset the loss of a contract to print flyers for the now-closed Zellers retail chain....
Don’t let market risk become an obsession
YUNUS ARAKON
The beginning of the summer holiday is a good time to defuse one of the predominant fears of stock market investing, market risk. While it pays to stay aware of market risk, you should never let it become an obsession. All investors need to recognize that stock prices do sometimes reach a market peak or ‘top’, then go into a slump. However, some investors and advisors make a career out of analyzing past market tops, especially those that were followed by deep declines....
LOBLAW COMPANIES $48.89 (Toronto symbol L; Shares outstanding: 282.1 million; Market cap: $13.9 billion; TSINetwork Rating: Above Average; Dividend yield: 2.0%; www.loblaw.ca) has announced more details of its upcoming plan to set up 75% of its real estate holdings as a publicly traded real estate investment trust (REIT).

The company will transfer 425 properties, including 415 stores, nine warehouses and one office building, to a new entity called Choice Properties Real Estate Investment Trust. Following the transfer, Loblaw will rent the properties from this new trust. Loblaw will be the REIT’s main tenant, accounting for roughly 90% of its rental income. Its leases range from 10 to 18 years.

Choice Properties will sell units to the public, probably in the next month or two, at a yet-to-be-disclosed price. Loblaw will hang on to a majority stake.
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CANADIAN REIT $42.88 (Toronto symbol REF.UN; Units outstanding: 68.4 million; Market cap: $2.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.9%; www.creit.ca) owns over 192 properties, including retail, industrial and office buildings, across Canada and in Chicago. These holdings contain over 19.7 million square feet of leasable area. The trust’s occupancy rate is 94.9%.

In the three months ended March 31, 2013, Canadian REIT’s revenue rose 8.9%, to $91.4 million from $83.9 million a year earlier. Cash flow per unit rose 6.3%, to $0.68 from $0.64.

Canadian REIT added just $11.3 million of new properties in the latest quarter. However, it bought $401.9 million of buildings in 2012. That includes a 50% stake in Calgary Place, a 575,000-square-foot office and retail complex, for $156.0 million.
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H&R REIT $22.11 (Toronto symbol HR.UN; Units outstanding: 258.3 million; Market cap: $16.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.8%; www.hr-reit.com) owns stakes in 40 office buildings, 112 industrial properties and 163 shopping malls across Canada. The trust has a 99.0% occupancy rate.

In the three months ended March 31, 2013, the REIT’s revenue rose 21.2%, to $222.6 million from $183.0 million a year earlier. Cash flow rose 24.3%, to $90.0 million from $72.4 million. Cash flow per unit gained 12.5%, to $0.45 from $0.40, on more units outstanding.

In March 2013, H&R finished building The Bow, a $1.33-billion, two-million-square-foot office building in Calgary. Encana Corp. has already leased the entire building for 25 years.
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