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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SUN LIFE FINANCIAL $38.90 (Toronto symbol SLF; Shares outstanding: 609.4 million; Market cap: $23.7 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.sunlife.ca) sells savings, retirement, pension and life insurance products to individuals and corporations.
Sun Life mainly operates in Canada, the U.S. and the U.K., but it continues to expand into Asia. It has $640 billion of assets under management.
Last year, the company sold its riskier, moneylosing U.S. annuity business, which offers products that guarantee minimum long-term returns even if markets fall.
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Sun Life mainly operates in Canada, the U.S. and the U.K., but it continues to expand into Asia. It has $640 billion of assets under management.
Last year, the company sold its riskier, moneylosing U.S. annuity business, which offers products that guarantee minimum long-term returns even if markets fall.
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TORSTAR $5.67 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $402.8 million; TSINetwork Rating: (NEW) Average; Dividend yield: 9.3%; www.torstar.com) continues to cut costs as more people get their news from the Internet.
This secular trend is working against newspapers and print advertising. As a result, we’ve cut Torstar’s TSINetwork Rating from “Above Average” to “Average.” However, we feel its lower costs put it in a good position to rebound as the economy grows. The company also owns oneof- a-kind trophy assets like The Toronto Star, and it could unlock some of its hidden value by spinning off its Harlequin book business. As well, the dividend seems safe for now.
Torstar is a buy....
This secular trend is working against newspapers and print advertising. As a result, we’ve cut Torstar’s TSINetwork Rating from “Above Average” to “Average.” However, we feel its lower costs put it in a good position to rebound as the economy grows. The company also owns oneof- a-kind trophy assets like The Toronto Star, and it could unlock some of its hidden value by spinning off its Harlequin book business. As well, the dividend seems safe for now.
Torstar is a buy....
VERESEN $16.24 (Toronto symbol VSN; Shares outstanding: 201.5 million; Market cap: $3.3 billion; TSINetwork Rating: Average; Yield: 6.2%) owns pipelines, power plants and gas-processing facilities across North America.
A major holding is 50% of the Alliance gas line, which runs 3,000 kilometres between Chicago and Fort St. John, B.C. It also owns the Alberta Ethane Gathering System, 42.7% of the Aux Sable NGL plant and the Hythe/Steeprock natural gas gathering and processing complex in the Cutbank Ridge region of Alberta and B.C.
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PEMBINA PIPELINE $39.96 (Toronto symbol PPL; Shares outstanding: 320.0 million; Market cap: $12.8 billion; TSINetwork Rating: Average; Div. yield: 4.2%; www.pembina.com) owns pipelines that carry half of Alberta’s conventional oil, 30% of Western Canada’s natural gas liquids (NGLs) and almost all of B.C.’s conventional oil.
Pembina also bought rival Provident Energy in 2012 for $3.2 billion, and that’s now paying off. Provident extracts, transports and stores natural gas liquids (NGLs).
In the quarter ended December 31, 2013, Pembina’s cash flow jumped 39.6%, to $194.0 million from $139.0 million a year earlier. Cash flow per share gained 29.2%, to $0.62 from $0.48, on more shares outstanding.
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Pembina also bought rival Provident Energy in 2012 for $3.2 billion, and that’s now paying off. Provident extracts, transports and stores natural gas liquids (NGLs).
In the quarter ended December 31, 2013, Pembina’s cash flow jumped 39.6%, to $194.0 million from $139.0 million a year earlier. Cash flow per share gained 29.2%, to $0.62 from $0.48, on more shares outstanding.
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BCE INC. $48.33 (Toronto symbol BCE; Shares outstanding: 775.9 million; Market cap: $37.4 billion; TSINetwork Rating: Above Average; Dividend yield: 5.1%; www.bce.ca) earned $540 million, or $0.70 a share, in the three months ended December 31, 2013. That’s up 16.4% from $464 million, or $0.60 a share, a year earlier.
Revenue rose 4.3%, to $5.4 billion from $5.2 billion. In addition to the contribution from recently acquired Astral Media, the company is attracting more wireless, high-speed Internet and digital TV customers. That’s helping offset lower revenue from traditional phones.
The company added 93,700 new wireless subscribers, net of cancellations, in the latest quarter (it now has 7.8 million users across Canada). That’s down 10.8% from a year earlier.
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Revenue rose 4.3%, to $5.4 billion from $5.2 billion. In addition to the contribution from recently acquired Astral Media, the company is attracting more wireless, high-speed Internet and digital TV customers. That’s helping offset lower revenue from traditional phones.
The company added 93,700 new wireless subscribers, net of cancellations, in the latest quarter (it now has 7.8 million users across Canada). That’s down 10.8% from a year earlier.
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IMPERIAL OIL $50.82 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $42.7 billion; TSINetwork Rating: Average; Dividend yield: 1.0%; 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 four refineries and 1,850 Esso gas stations.
In the three months ended December 31, 2013, Imperial produced an average of 329,000 barrels of oil equivalent a day, up 15.4% from 285,000 barrels a year earlier. The gain was mainly due to the start-up of its Kearl oil sands project in April 2013.
The higher production increased Imperial’s revenue by 7.2%, to $8.4 billion from $7.8 billion. However, insufficient pipeline capacity has made it difficult for the company to sell its oil in higher-priced markets. That cut its earnings per share by 1.5%, to $1.24 from $1.26. Cash flow per share fell 11.7%, to $1.67 from $1.89.
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In the three months ended December 31, 2013, Imperial produced an average of 329,000 barrels of oil equivalent a day, up 15.4% from 285,000 barrels a year earlier. The gain was mainly due to the start-up of its Kearl oil sands project in April 2013.
The higher production increased Imperial’s revenue by 7.2%, to $8.4 billion from $7.8 billion. However, insufficient pipeline capacity has made it difficult for the company to sell its oil in higher-priced markets. That cut its earnings per share by 1.5%, to $1.24 from $1.26. Cash flow per share fell 11.7%, to $1.67 from $1.89.
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Pat McKeough responds to many requests from members of his Inner Circle for specific advice on stocks to buy 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 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....
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 investment advice that will help you develop a successful approach to investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “While many numbers and statistics frequently prove to be of limited value in judging stocks, there is one that is often undervalued: market cap.”...
Pat McKeough responds to many requests from members of his Inner Circle for specific advice on stock picks 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 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....
CAMPBELL SOUP CO. (New York symbol CPB; www.campbellsoupcompany.com) is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices. Wal-Mart accounts for 19% of its sales....
