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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ISHARES FTSE/XINHUA CHINA 25 INDEXFUND $41.85 (New York symbol FXI; buy or sell throughbrokers) is an ETF that aims to track the FTSE/XinhuaChina 25 Index, which is made up of the 25 largestand most liquid Chinese stocks. All of the stocks inthe index trade on the Hong Kong exchange. Somealso trade as American Depositary Receipts (ADRs)on the New York exchange.
The fund’s top holdings are China ConstructionBank, 9.6%; China Mobile, 9.4%; Industrial &Commercial Bank, 8.8%; CNOOC, 6.5%; Bank ofChina, 6.2%; Agricultural Bank of China, 4.5%;China Overseas Land & Investment, 4.2%; ChinaPacific Insurance, 4.2%; China Petroleum andChemical; 4.1%; and PetroChina, 3.9%.
The fund’s holdings give it the following industrybreakdown: Financials, 59.2%; Telecommunications,15.7%; Oil and Gas, 14.5%; Basic Materials, 8.9%;and Industrials, 2.1%. Its expense ratio is 0.74%.
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The fund’s top holdings are China ConstructionBank, 9.6%; China Mobile, 9.4%; Industrial &Commercial Bank, 8.8%; CNOOC, 6.5%; Bank ofChina, 6.2%; Agricultural Bank of China, 4.5%;China Overseas Land & Investment, 4.2%; ChinaPacific Insurance, 4.2%; China Petroleum andChemical; 4.1%; and PetroChina, 3.9%.
The fund’s holdings give it the following industrybreakdown: Financials, 59.2%; Telecommunications,15.7%; Oil and Gas, 14.5%; Basic Materials, 8.9%;and Industrials, 2.1%. Its expense ratio is 0.74%.
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TRANSCANADA CORP. $47.25 (Torontosymbol TRP; Shares outstanding: 705.1 million;Market cap: $33.3 billion; TSINetwork Rating:Above Average; Dividend yield: 3.7%;www.transcanada.com) has formed a 50/50 jointventure with privately held Phoenix EnergyHoldings Ltd., a wholly owned subsidiary ofPetroChina Co. Ltd. (New York symbol PTR).
The partners plan to build a 500-kilometrepipeline that would pump crude oil from Phoenix’soil sands properties in northern Alberta toEdmonton. TransCanada will operate the newpipeline.
TransCanada’s share of the project’s $3.0-billion cost is $1.5 billion. The partners aim tobegin construction in 2014, and the pipelineshould start up in early 2017.
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The partners plan to build a 500-kilometrepipeline that would pump crude oil from Phoenix’soil sands properties in northern Alberta toEdmonton. TransCanada will operate the newpipeline.
TransCanada’s share of the project’s $3.0-billion cost is $1.5 billion. The partners aim tobegin construction in 2014, and the pipelineshould start up in early 2017.
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VERESEN $11.97 (Toronto symbol VSN; Sharesoutstanding: 197.5 million; Market cap: $2.4 billion;TSINetwork Rating: Average; Yield: 8.4%) ownspipelines, power plants and natural gas processingfacilities across North America. One of its majorholdings is 50% of the Alliance gas pipeline, whichruns 3,000 kilometres between Chicago and Fort St.John, B.C. Enbridge owns the other 50%. Thecompany also owns the Alberta Ethane GatheringSystem, and Veresen and Enbridge together hold85.4% of the Aux Sable natural gas liquids (NGL)plant.
In December 2011, Veresen paid Encana Corp.$920 million for the Hythe/Steeprock natural gasgathering and processing complex in the Montneyregion of B.C. and Alberta. Encana also signed along-term deal to buy most of this facility’s gas.
In the quarter ended September 30, 2012, cashflow rose 12.9%, to $61.4 million from $54.4 milliona year earlier. Cash flow per share fell 6.1%, to $0.31from $0.33, on more shares outstanding.
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In December 2011, Veresen paid Encana Corp.$920 million for the Hythe/Steeprock natural gasgathering and processing complex in the Montneyregion of B.C. and Alberta. Encana also signed along-term deal to buy most of this facility’s gas.
In the quarter ended September 30, 2012, cashflow rose 12.9%, to $61.4 million from $54.4 milliona year earlier. Cash flow per share fell 6.1%, to $0.31from $0.33, on more shares outstanding.
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PEMBINA PIPELINE $28.71 (Toronto symbolPPL; Shares outstanding: 292.3 million; Market cap:$8.4 billion; TSINetwork Rating: Average; Dividendyield: 5.6%; www.pembina.com) owns pipelinesystems that transport half of Alberta’s conventionaloil production, 30% of the natural gas liquids(NGLs) produced in western Canada and virtually allof B.C.’s conventional oil output.
In the quarter ended September 30, 2012, Pembina’srevenue rose 171.2%, to $815.3 million from$300.6 million a year earlier. In April 2012, it boughtrival Provident Energy, which extracts, transports andstores NGLs, for $3.2 billion. Provident was themain reason for the higher revenue.
Cash flow rose 62.4%, to $133.2 million from$82.0 million. However, cash flow per share fell6.1%, to $0.46 from $0.49, because the companyissued more shares to pay for Provident.
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In the quarter ended September 30, 2012, Pembina’srevenue rose 171.2%, to $815.3 million from$300.6 million a year earlier. In April 2012, it boughtrival Provident Energy, which extracts, transports andstores NGLs, for $3.2 billion. Provident was themain reason for the higher revenue.
Cash flow rose 62.4%, to $133.2 million from$82.0 million. However, cash flow per share fell6.1%, to $0.46 from $0.49, because the companyissued more shares to pay for Provident.
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GREAT-WEST LIFECO $24.20 (Toronto symbol GWO; Shares outstanding: 950.5 million; Market cap: $23.0 billion; TSINetwork Rating: Above Average; Dividend yield: 5.1%) is Canada’s largest insurance company, with $532.0 billion in assets under administration. It also sells mutual funds, retirement-planning and wealth management services. Power Financial owns 68.2% of Great-West.
In the quarter ended September 30, 2012, earnings rose 13.8%, to $520 million, or $0.55 a share. A year earlier, it earned $457 million, or $0.48 a share. Revenue rose 1.5%, to $8.6 billion from $8.5 billion.
Earnings from the Canadian division (which supplies 54% of the total) rose 19.6%. Stronger sales to individuals offset lower demand for group policies. As well, the value of the assets this division manages rose, which pushed up its fee income.
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In the quarter ended September 30, 2012, earnings rose 13.8%, to $520 million, or $0.55 a share. A year earlier, it earned $457 million, or $0.48 a share. Revenue rose 1.5%, to $8.6 billion from $8.5 billion.
Earnings from the Canadian division (which supplies 54% of the total) rose 19.6%. Stronger sales to individuals offset lower demand for group policies. As well, the value of the assets this division manages rose, which pushed up its fee income.
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Picking stocks whose share prices will rise is not the only goal that successful investors set for themselves. You also add a great deal of value to your portfolio when you select stocks that are prepared to distribute their profits to the shareholders. A company can share the wealth in two main ways—it can buy back its own shares, or it can pay dividends. Both pay off for investors, which is why a number of the best stocks we recommend have a history of doing both....
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific investment advice, including the best use of financial ratios in your stock market research. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “When you’re trying to assess whether a company can manage its debt, the most popular ratio may actually be misleading.”...
Pat McKeough responds to many personal questions about buying stocks and other investment topics 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 about Empire Company, a stock that makes money from a variety of sources, including movie theatres. But its chief source of revenue is grocery chain Sobeys. Pat considers the reliable income generated by Sobeys’ stores against the threat of increased competition as more big-box retailers crowd into the grocery business.
Q: Hi: I have recently taken a small position in Empire Company. What do you think of their shares? Thank you.
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This week, an Inner Circle member asked about Empire Company, a stock that makes money from a variety of sources, including movie theatres. But its chief source of revenue is grocery chain Sobeys. Pat considers the reliable income generated by Sobeys’ stores against the threat of increased competition as more big-box retailers crowd into the grocery business.
Q: Hi: I have recently taken a small position in Empire Company. What do you think of their shares? Thank you.
...
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific advice and insights on good investments. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away.
Today’s tip: “When you follow these 8 important steps, you are putting your financial security on a secure footing for the future.
Investors are continually deluged with promises of lifelong financial happiness, some legitimate if overly optimistic, others frankly deceptive or fraudulent. But there is no magic formula for financial security
...
Today’s tip: “When you follow these 8 important steps, you are putting your financial security on a secure footing for the future.
Investors are continually deluged with promises of lifelong financial happiness, some legitimate if overly optimistic, others frankly deceptive or fraudulent. But there is no magic formula for financial security
...
As we have consistently pointed out to our subscribers and wealth management clients, investing can never be an exact science. Experience and judgment are just as essential as fundamental analysis in successful investing.
That’s also why a balanced temperament is so important. It can keep you on a steady course and help you avoid losses. It can also help you avoid investing strategies that narrow your chances of success.
One way to judge your own temperament for investing is to take a quick survey of investment approaches to see what works best for you.
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That’s also why a balanced temperament is so important. It can keep you on a steady course and help you avoid losses. It can also help you avoid investing strategies that narrow your chances of success.
One way to judge your own temperament for investing is to take a quick survey of investment approaches to see what works best for you.
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