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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BANK OF NOVA SCOTIA $72.16 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $88.0 billion; TSINetwork Rating: Above Average; Div. yield: 3.7%, www.scotiabank.com) is the third-largest of Canada’s five big banks, with $791.5 billion of assets.
In the three months ended July 31, 2014, the bank earned $1.85 a share, up 36.0% from $1.36 a year earlier. The latest quarter included a one-time gain of $0.45 a share from the sale of most of the bank’s stake in mutual fund company CI Financial for $2.3 billion. Without one-time items, earnings per share rose 8.5%, to $1.40 from $1.29.
Higher loan demand and deposits pushed up the Canadian banking division’s earnings by 2.7%. That includes ING Direct, which Bank of Nova Scotia bought for $3.1 billion in late 2012.
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In the three months ended July 31, 2014, the bank earned $1.85 a share, up 36.0% from $1.36 a year earlier. The latest quarter included a one-time gain of $0.45 a share from the sale of most of the bank’s stake in mutual fund company CI Financial for $2.3 billion. Without one-time items, earnings per share rose 8.5%, to $1.40 from $1.29.
Higher loan demand and deposits pushed up the Canadian banking division’s earnings by 2.7%. That includes ING Direct, which Bank of Nova Scotia bought for $3.1 billion in late 2012.
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Pat McKeough responds to many requests from members of his Inner Circle for specific stock tips, as well as questions on investment strategy and the economy. 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 a report on one of the stocks profiled in these Q&A sessions. We give you Pat’s buy-hold-sell recommendation as well as his analysis of the stock. This is part of the specific buy, hold and sell advice we offer you in our daily posts. Every week you get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday, and “Our Top U.S. Stocks” on Thursday. This week an Inner Circle member asked us about a company that is in the forefront of treating heart disease. Edwards Lifesciences makes the bulk of its money from heart valve technology and the rest on critical care, or hemodynamic monitoring. Pat examines Edwards’ leading products and particularly the surge in revenue from the Transcatheter Heart Valve. He also considers whether the company’s shares can continue their rise. Q: Good day, Pat: Can you please provide your opinion on Edwards Lifesciences? Thanks....
Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves you should know about, from coverage in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor. Finning has many customers in the cyclical resource sector, which adds risk. However, it is a market leader. As well, complex new technologies like hydraulic fracturing, or fracking, and steam-assisted gravity drainage should spur demand for its specialized gear and services. FINNING INTERNATIONAL INC. (Toronto symbol FTT; www.finning.com) is the world’s largest dealer of tractors, bulldozers and trucks made by Caterpillar Inc. (New York symbol CAT). It also sells heavy equipment made by other firms....
Pat McKeough responds to many requests from members of his Inner Circle for specific stock advice, as well as questions on investment strategy and the economy. 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 a report on one of the stocks profiled in these Q&A sessions. We give you Pat’s buy-hold-sell recommendation as well as his analysis of the stock. This is part of the specific buy, hold and sell advice we offer you in our daily posts. Every week you get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday, and “Our Top U.S. Stocks” on Thursday. Recently we had a question from an Inner Circle member on an industrial firm that serves a diverse clientele. Ingersoll Rand, an Irish-based company that trades on the New York exchange, has one segment devoted to Climate Control and another to Industrial Technologies. Pat examines Ingersoll’s different businesses and looks at its prospects in light of a spinoff the company executed last year and an acquisition it has just agreed to make. Q: Hello: What is your opinion of Ingersoll-Rand? Thank you....
Every Thursday we bring you “Best U.S. Stocks.” You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about, from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster. AMERICAN EXPRESS CO. (New York symbol AXP; www.americanexpress.com) started up in 1850 and is now one of the world’s largest issuers of payment cards, with 109.9 million cards outstanding in over 130 countries. Billionaire investor Warren Buffett owns 14.3% of the company. Amex issues two types of cards: charge cards, which have no pre-set spending limit and must be paid in full each month; and traditional credit cards, which let users carry a balance....
Pat McKeough responds to many requests from members of his Inner Circle for advice on specific stocks, as well as questions on investment strategy and the economy. 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 a report on one of the stocks profiled in these Q&A sessions. Beginning this week, we give you Pat’s buy-hold-sell recommendation as well as his analysis of the stock. This is part of our new approach offering you regular and specific buy, hold and sell advice in our daily posts. Every week you’ll get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday, and “Our Top U.S. Stocks” on Thursday. This week an Inner Circle member asked us about one of the Canadian stocks that serves the U.S. housing market. Hardwoods Distribution purchases high-grade lumber and sheet goods from hardwood mills and sells them, largely for home construction. The company has added several U.S. acquisitions in the past two years. Pat looks at Hardwoods business and its balance sheet and assesses its prospects in light of the U.S. housing recovery. Q: Pat: What are your thoughts on Hardwoods Distribution?...
Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves you should know about, from coverage in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor. We continue to advise against investing in bonds, because low interest rates hurt their appeal, while rising rates would push down their future value. For stable income and growth, we prefer high-yielding utilities. Their dividends also qualify for the dividend tax credit. ATCO LTD. (Toronto symbols ACO.X [class I non-voting] and ACO.Y [class II voting; www.atco.com) holds 53.2% of Canadian Utilities. It also owns 75.5% of ATCO Structures & Logistics, which builds temporary buildings for construction and energy exploration firms; Canadian Utilities owns the remaining 24.5%....
Pat McKeough responds to many requests from members of his Inner Circle for advice on investing in stocks, as well as questions on investment strategy and the economy. 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 a report on one of the stocks profiled in these Q&A sessions. Beginning this week, we give you Pat’s buy-hold-sell recommendation as well as his analysis of the stock. This is part of our new approach offering you regular and specific buy, hold and sell advice in our daily posts. Every week you’ll get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday, and “Our Top U.S. Stocks” on Thursday. This week we got a question from an Inner Circle member who is interested in a stock but concerned that it doesn’t pay a dividend. Gilead Sciences is a drug company that specializes in combatting viruses. Hepatitis C is the primary target of treatments developed by Gilead Sciences, but it also plays an important role in treatments for HIV/AIDS. Pat assesses the status of the company’s leading drugs and examines the challenges the company faces maintaining a position of leadership in a highly competitive field. Q: Please give your opinion on Gilead Sciences. It sounds very good to me as a physician, but it pays no dividend and I’ve bought into dividend investing. Thanks....
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on a wide range of investing topics, including trading stocks online. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Tip of the week: “Online trading seems like an easy and convenient way to invest, but that can also make it an easy way to lose money.” Some investors may look on online trading as a fairly quick and convenient way to build wealth, but there are many hidden dangers that may not be easy to spot at first....
Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves you should know about, from coverage in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor. IGM Financial is in a strong position to profit as baby boomers sign up for retirement planning services. The company also trades at a low multiple to its earnings and will probably raise its dividend in 2015. IGM FINANCIAL INC. (Toronto symbol IGM; www.igmfinancial.com) is Canada’s largest independent mutual fund firm. Power Financial owns 58.7% of IGM, along with 67.0% of Great-West....
