How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.
If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)
If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.
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Pat McKeough responds to many requests for specific advice on stocks to buy and other questions on investment strategy and the economy from the members of his Inner Circle. 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. This week, we received a question from an Inner Circle member about one of the world’s leading makers of luxury accessories. In order to generate further growth Coach is relying on increasing overseas sales and on an expansion into more men’s products. Pat examines the company’s prospects in the face of stiffer competition and rising costs. ...
VISA INC. (New York symbol V; www.visa.com) operates the world’s largest electronic payments network. The company processes credit, debit, prepaid and commercial payments under the Visa, Visa Electron, Interlink and PLUS brands. Visa gets most of its revenue from fees it charges card issuers and merchants for using its network. These fees are based on payment volume, transactions processed and other factors. The responsibility for evaluating customer creditworthiness and collecting payments lies with the banks that issue the cards, not with Visa....
Pat McKeough responds to many requests for specific advice on investing in stocks and other questions on investment strategy and the economy from the members of his Inner Circle. 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. This week, an Inner Circle member asked us about a stock that is a leader in developing drugs for viral diseases. Gilead is particularly strong in the treatment of hepatitis, a lucrative market. Pat examines the progress of Gilead’s attempt to win approval for a new hepatitis drug against stiff competition from other major pharmaceutical firms. ...
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....
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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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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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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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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ISHARES AUSTRALIA INDEX FUND $23.84 (New York symbol EWA; buy or sell through brokers) is an ETF that holds the 70 largest Australian stocks. Its MER is 0.50%.
The fund’s top holdings include BHP Billiton, 10.8%; Commonwealth Bank of Australia, 10.6%; Westpac Banking Corp., 8.9%; Australia and New Zealand Banking Group, 7.5%; National Australia Bank, 6.8%; Woolworths, 4.0%; Wesfarmers, 3.9%; CSL Ltd., 2.9%; Westfield Group, 2.4%; and Woodside Petroleum, 2.3%.
Australia benefits from its stable banking and political systems. It is also rich in natural resources, and it’s close to key Asian markets with vast potential, including India and China.
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The fund’s top holdings include BHP Billiton, 10.8%; Commonwealth Bank of Australia, 10.6%; Westpac Banking Corp., 8.9%; Australia and New Zealand Banking Group, 7.5%; National Australia Bank, 6.8%; Woolworths, 4.0%; Wesfarmers, 3.9%; CSL Ltd., 2.9%; Westfield Group, 2.4%; and Woodside Petroleum, 2.3%.
Australia benefits from its stable banking and political systems. It is also rich in natural resources, and it’s close to key Asian markets with vast potential, including India and China.
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TRANSCANADA CORP. $46.23 (Toronto symbol TRP; Shares outstanding: 707.0 million; Market cap: $33.5 billion; TSINetwork Rating: Above Average; Dividend yield: 4.0%; www.transcanada.com) plans to build a new 200-kilometre crude oil pipeline that will connect Edmonton to the storage hub at Hardisty, Alberta. From there, TransCanada will pump the oil to refineries in the U.S. Midwest through its Keystone pipeline (and link up later with its Keystone XL pipeline if it’s built).
The $900-million project also includes a new oil-storage facility. The company already has long-term contracts from producers, which cuts the risk of this investment. The new line should begin operating in the second half of 2015.
TransCanada is a buy....
The $900-million project also includes a new oil-storage facility. The company already has long-term contracts from producers, which cuts the risk of this investment. The new line should begin operating in the second half of 2015.
TransCanada is a buy....
IBM $202.74 (New York symbol IBM; Shares outstanding: 1.1 billion; Market cap: $228.6 billion; TSINetwork Rating: Above Average; Dividend yield: 1.9%) is paying an undisclosed sum for SoftLayer Technologies, which sells online data storage space and related services to over 21,000 businesses. SoftLayer has 13 data centres in the U.S., Asia and Europe.
Demand for cloud-computing, which mainly involves storing data and using software on remote servers, is growing strongly. That’s because it gives cost-conscious companies access to better software and services without the high cost of setting up their own servers.
SoftLayer’s technology will enhance IBM’s expertise in this expanding market.
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Demand for cloud-computing, which mainly involves storing data and using software on remote servers, is growing strongly. That’s because it gives cost-conscious companies access to better software and services without the high cost of setting up their own servers.
SoftLayer’s technology will enhance IBM’s expertise in this expanding market.
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