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 MSCI EMERGING MARKETS INDEX FUND $40.91 (New York symbol EEM; buy or sell through brokers) aims to track the MSCI Emerging Markets Index. The fund’s geographic breakdown includes China, 24.8%; South Korea, 14.6%; Taiwan, 12.9%; South Africa, 7.4%; Brazil, 7.2%; India, 7.0%; Mexico, 4.6%; Russia, 3.9%; Malaysia, 3.3%; Indonesia, 2.5%; Thailand, 2.1%; and Turkey, 1.5%.
Its top holdings are Samsung Electronics (South Korea), 3.2%; Taiwan Semiconductor (computer chips), 2.9%; Tencent Holdings (China: Internet), 2.6%; China Mobile, 2.0%; China Construction Bank, 1.8%; Industrial & Commercial Bank of China, 1.6%; Naspers (South Africa: media and Internet), 1.4%; Hon Hai Precision Industry (Taiwan), 1.0%; and Ping An Insurance of China, 1.0%.
Its industry breakdown includes Financials, 28.1%; Information Technology, 19.0%; Consumer Discretionary, 9.3%; Consumer Staples, 8.0%; Energy, 7.8%; Telecommunication Services, 7.3%; Materials, 7.0%; and Industrials, 6.8%.
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Its top holdings are Samsung Electronics (South Korea), 3.2%; Taiwan Semiconductor (computer chips), 2.9%; Tencent Holdings (China: Internet), 2.6%; China Mobile, 2.0%; China Construction Bank, 1.8%; Industrial & Commercial Bank of China, 1.6%; Naspers (South Africa: media and Internet), 1.4%; Hon Hai Precision Industry (Taiwan), 1.0%; and Ping An Insurance of China, 1.0%.
Its industry breakdown includes Financials, 28.1%; Information Technology, 19.0%; Consumer Discretionary, 9.3%; Consumer Staples, 8.0%; Energy, 7.8%; Telecommunication Services, 7.3%; Materials, 7.0%; and Industrials, 6.8%.
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PENGROWTH ENERGY $3.26 (Toronto symbol PGF; Shares outstanding: 534.6 million; Market cap: $1.8 billion; TSINetwork Rating: Average; Dividend: 7.4%; www.pengrowth.com) has started up its Lindbergh oil sands project in Alberta, which should produce 16,000 barrels a day by the end of 2015. Excluding Lindbergh, Pengrowth produced 69,334 barrels of oil equivalent a day in the first quarter of 2015.
As well, for the remainder of 2015, the company has hedged 78% of its oil production at $93.87 (Canadian) a barrel, well above today’s price of $60.16 U.S. It has also hedged 57% of its gas output at $3.72 (Canadian) per thousand cubic feet, compared to the current price of $2.94 U.S. The company’s hedges were worth $354.3 million as of March 31, 2015.
Pengrowth is still a buy.
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As well, for the remainder of 2015, the company has hedged 78% of its oil production at $93.87 (Canadian) a barrel, well above today’s price of $60.16 U.S. It has also hedged 57% of its gas output at $3.72 (Canadian) per thousand cubic feet, compared to the current price of $2.94 U.S. The company’s hedges were worth $354.3 million as of March 31, 2015.
Pengrowth is still a buy.
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INNERGEX RENEWABLE ENERGY $11.65 (Toronto symbol INE; Shares outstanding: 101.1 million; Market cap: $1.2 billion; TSINetwork Rating: Extra Risk; Dividend yield 5.3%; www.innergex.com) operates 26 hydroelectric plants, six wind farms and one solar power facility in Quebec, Ontario, B.C. and Idaho. The company gets 73% of its power from hydroelectric plants. Wind supplies 26% and solar generates 1%.
In contrast to Algonquin, Innergex is growing slowly, mostly by building its own hydroelectric and wind facilities, rather than through acquisitions. Right now, the company has five projects under construction.
But like Algonquin, Innergex makes sure it has firm long-term power-purchase contracts in place before it starts building new plants.
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In contrast to Algonquin, Innergex is growing slowly, mostly by building its own hydroelectric and wind facilities, rather than through acquisitions. Right now, the company has five projects under construction.
But like Algonquin, Innergex makes sure it has firm long-term power-purchase contracts in place before it starts building new plants.
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ALGONQUIN POWER & UTILITIES CORP. $9.58 (Toronto symbol AQN; Shares outstanding: 238.9 million; Market cap: $2.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.9%; www.algonquinpower.com) has nearly tripled in size over the past three years through acquisitions. It plans to expand further with more purchases.
The company’s regulated utility businesses now provide water, electricity and natural gas to over 489,000 customers, up sharply from 120,000 three years ago. In addition, its hydroelectric, thermal energy, solar and wind facilities generate 1,150 megawatts, up from 460.
Emera (Toronto symbol EMA), a recommendation of The Successful Investor, our conservative growth advisory, owns 21.0% of Algonquin.
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The company’s regulated utility businesses now provide water, electricity and natural gas to over 489,000 customers, up sharply from 120,000 three years ago. In addition, its hydroelectric, thermal energy, solar and wind facilities generate 1,150 megawatts, up from 460.
Emera (Toronto symbol EMA), a recommendation of The Successful Investor, our conservative growth advisory, owns 21.0% of Algonquin.
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CRESCENT POINT ENERGY CORP. $28.03 (Toronto symbol CPG; Shares outstanding: 449.5 million; Market cap: $12.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 9.9%; www.crescentpointenergy.com) produces oil and natural gas in Western Canada, with a focus on its Bakken light oil development in southeastern Saskatchewan.
The company is now buying heavily indebted Legacy Oil + Gas (Toronto symbol LEG) for $563 million plus the assumption of $967 million in debt. Activist investors put a lot of pressure on Legacy to complete a deal.
The move will add about 22,000 barrels of oil a day to Crescent Point’s current output of 150,000 barrels. About 15,000 barrels of Legacy’s output is in Crescent Point’s core Bakken area.
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The company is now buying heavily indebted Legacy Oil + Gas (Toronto symbol LEG) for $563 million plus the assumption of $967 million in debt. Activist investors put a lot of pressure on Legacy to complete a deal.
The move will add about 22,000 barrels of oil a day to Crescent Point’s current output of 150,000 barrels. About 15,000 barrels of Legacy’s output is in Crescent Point’s core Bakken area.
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IMPERIAL OIL $49.32 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $41.9 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.imperialoil.ca) is a major integrated oil company with oil sands projects in Alberta and conventional oil and gas operations across Western Canada. It also operates three refineries and 1,700 Esso gas stations.
Oil prices hit a high of $147 U.S. a barrel in July 2008, but then plummeted to a low of $32 in December 2008 as the recession took hold. Prices climbed back to over $100 in 2010, and remained near there until mid-2014 when oil plunged from $110 to less than half that price by the end of the year. Oil is now at $60 a barrel.
Strong oil prices for most of 2014 let Imperial report cash flow of $5.3 billion, or $6.26 a share. This year, low oil prices will likely push cash flow down by more than half, to $2.6 billion, or $3.02 a share.
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Oil prices hit a high of $147 U.S. a barrel in July 2008, but then plummeted to a low of $32 in December 2008 as the recession took hold. Prices climbed back to over $100 in 2010, and remained near there until mid-2014 when oil plunged from $110 to less than half that price by the end of the year. Oil is now at $60 a barrel.
Strong oil prices for most of 2014 let Imperial report cash flow of $5.3 billion, or $6.26 a share. This year, low oil prices will likely push cash flow down by more than half, to $2.6 billion, or $3.02 a share.
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Pat McKeough responds to many requests from members of his Inner Circle. Every week, his comments on the most intriguing questions of the past week go out to all Inner Circle members. Each week, we offer you a highlight from these Q&A sessions. This week, why the world’s largest farm equipment maker isn’t among our U.S. stocks to buy.
Q: How do you see things shaping up for Deere & Co.? Is it a buy? Thanks.
A: Deere & Co. (symbol DE on New York; www.deere.com) started up in 1837 when its founder, John Deere, began making polished-steel plows at his blacksmith shop in Grand Detour, Illinois.
Today, the company is the world’s largest maker of agricultural equipment, with plants in the U.S., Canada, France, Germany, Spain, South Africa, Mexico and Argentina. In addition to John Deere, its top brands include Frontier, Kemper, Green Systems and SABO.
Deere mainly sells these products through independent dealers and home-improvement chains like Home Depot and Lowe’s. It has three divisions:
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Q: How do you see things shaping up for Deere & Co.? Is it a buy? Thanks.
A: Deere & Co. (symbol DE on New York; www.deere.com) started up in 1837 when its founder, John Deere, began making polished-steel plows at his blacksmith shop in Grand Detour, Illinois.
Today, the company is the world’s largest maker of agricultural equipment, with plants in the U.S., Canada, France, Germany, Spain, South Africa, Mexico and Argentina. In addition to John Deere, its top brands include Frontier, Kemper, Green Systems and SABO.
Deere mainly sells these products through independent dealers and home-improvement chains like Home Depot and Lowe’s. It has three divisions:
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Home renovations spurred by an improved real estate market help keep Stanley Black and Decker one on our best stocks to buy in the U.S.
Our portfolio advice: when you find the best stocks to invest in, and the shares begin to rise, avoid the temptation to sell them too soon.
Starbucks is opening 1,650 new shops in 2015 and has strong growth overseas—our take on whether that makes it a good stock investment