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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When investors get in the habit of using one investment measure to buy stocks, they often find that it can be dangerously misleading.
Giving mortgages to borrowers the banks won’t touch may seem risky, but this firm’s disciplined approach puts it among our top stock picks.
H&R REIT $23.32 (Toronto symbol HR.UN; Units outstanding: 275.3 million; Market cap: $6.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.8%; www.hr-reit.com) owns stakes in 45 office buildings, 114 industrial properties and 340 shopping malls in Canada and the U.S. In December 2014, the REIT sold part ownership of 101 industrial properties in Canada and the U.S. for $731 million. In all, these buildings comprise 19.5 million square feet. The buyers include the Canadian Public Sector Pension Investment Board. H&R will keep a 50% interest in the Canadian properties and a 49.5% stake in the U.S. portfolio. It will also keep managing these assets and will receive fees for doing so. H&R will retain full ownership of 14 other industrial properties....
TELUS $42.36 (Toronto symbol T; Shares outstanding: 609.0 million; Market cap: $25.9 billion; TSINetwork Rating: Above Average; Dividend yield: 3.8%; www.telus.com) has issued $1.75 billion worth of new long-term notes. The company will use the proceeds to pay for its recent $1.5-billion purchase of new AWS-3 radio frequencies (or wireless spectrum). Telus will use this spectrum to boost its wireless services’ speed and capacity. That will encourage more of its subscribers to upgrade to smartphones, which are more profitable for Telus than regular cellphones. The new notes will increase Telus’s long-term debt to around $11.2 billion, or a high 43% of its $25.9-billion market cap. However, the company’s annual free cash flow (or cash flow minus capital expenditures) is $1.1 billion, which gives it plenty of flexibility to pay down its debt. In addition, Telus has staggered its loan maturities to 2045, so its annual repayments remain manageable....
POWER CORP. $33.51 (Toronto symbol POW; Shares outstanding: 413.5 million; Market cap: $15.5 billion; TSINetwork Rating: Above Average; Div. yield: 3.4%; www.powercorporation.com) holds its financial assets through 65.7%-owned Power Financial. These holdings include 58.7% of IGM Financial, a leading Canadian mutual fund provider. As of March 31, 2015, IGM had $148.4 billion worth of assets under management, up 8.1% from $137.3 billion a year earlier. IGM’s fee income rises and falls with the value of the mutual funds and other securities it manages, so its revenue and earnings gain when the price of these assets rises. Power Corp. is a buy.
TRANSCANADA CORP. $56.04 (Toronto symbol TRP; Shares outstanding: 708.9 million; Market cap: $40.4 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.transcanada.com) has announced a new deal with Magellan Midstream Partners (New York symbol MMP). The two firms have formed a 50/50 partnership to build a pipeline connecting their oil-storage facilities in Houston, Texas. This will give TransCanada’s oil-shipping clients access to more refineries in the Houston area. The company’s share of the $50-million cost is $25 million. To put that in context, TransCanada earned $511 million, or $0.72 a share, in the three months ended December 31, 2014. The partners expect to complete this project in mid-2016....
With one big contract lost, cuts in energy spending and older-generation rigs, Hercules Offshore faces a sharp decline in earnings.
Alimentation Couche-Tard (symbol ATD.B on Toronto; www.couche-tard.com) operates 6,314 convenience stores throughout North America. Canadian outlets operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand.
In Europe, Couche-Tard operates 2,233 stores across Scandinavia, Poland, the Baltic States (Estonia, Latvia and Lithuania) and Russia.
In the three months ended February 1, 2015, Couche-Tard’s sales rose just 1.7%, to $2.33 billion from $2.29 billion a year earlier. The higher U.S. dollar cut the revenue contribution of its European operations.
However, per-share earnings jumped 64.5%, to $0.51 from $0.31. Couche-Tard saw higher profit margins on merchandise and fuel, and it continues to save on interest costs as it pays down the debt it took on to acquire Norway’s Statoil Fuel & Retail gas station chain, which it bought for $2.7 billion in June 2012.
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In Europe, Couche-Tard operates 2,233 stores across Scandinavia, Poland, the Baltic States (Estonia, Latvia and Lithuania) and Russia.
In the three months ended February 1, 2015, Couche-Tard’s sales rose just 1.7%, to $2.33 billion from $2.29 billion a year earlier. The higher U.S. dollar cut the revenue contribution of its European operations.
However, per-share earnings jumped 64.5%, to $0.51 from $0.31. Couche-Tard saw higher profit margins on merchandise and fuel, and it continues to save on interest costs as it pays down the debt it took on to acquire Norway’s Statoil Fuel & Retail gas station chain, which it bought for $2.7 billion in June 2012.
POWER CORP. $33.52 (Toronto symbol POW; Shares outstanding: 412.6 million; Market cap: $15.5 billion; TSINetwork Rating: Above Average; Div. yield: 3.5%; www.powercorporation.com) is a diversified holding company. It holds its financial assets through 65.7%-owned Power Financial.
These financial assets include 68.1% of Great- West Lifeco, one of Canada’s largest life insurers, and 58.7% of IGM Financial, a leading Canadian mutual fund provider.
As well, Power Financial owns 50% of holding company Parjointco, which holds a 55.5% stake in Switzerland-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European firms: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), SGS (inspection, testing and certification services) and Lafarge (cement and building materials). Power Corp. also has investments in Asia.
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These financial assets include 68.1% of Great- West Lifeco, one of Canada’s largest life insurers, and 58.7% of IGM Financial, a leading Canadian mutual fund provider.
As well, Power Financial owns 50% of holding company Parjointco, which holds a 55.5% stake in Switzerland-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European firms: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), SGS (inspection, testing and certification services) and Lafarge (cement and building materials). Power Corp. also has investments in Asia.
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ALGONQUIN POWER & UTILITIES $9.36 (Toronto symbol AQN; Shares outstanding: 238.9 million; Market cap: $2.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.7%; www.algonquinpower.com) reports that its revenue rose 26.3% in the three months ended December 31, 2014, to $259.3 million from $205.3 million a year earlier. Cash flow per share jumped 22.7%, to $0.27 from $0.22.
The gains mostly came from acquisitions, including California’s Park Water for $327 million U.S. in September 2014.
Growth by acquisition adds risk. But Algonquin cuts that risk by buying profitable utilities like Park Water. It also ensures that its renewable energy projects sell their power under long-term government-guaranteed contracts.
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The gains mostly came from acquisitions, including California’s Park Water for $327 million U.S. in September 2014.
Growth by acquisition adds risk. But Algonquin cuts that risk by buying profitable utilities like Park Water. It also ensures that its renewable energy projects sell their power under long-term government-guaranteed contracts.
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