investment advice

ALIMENTATION COUCHE-TARD $18.47 (Toronto symbol ATD.B: SI Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 183.6 million; Market cap: $3.4 billion; Dividend yield: 0.9%) has launched a $1.9-billion hostile takeover bid for Casey’s General Stores (symbol CASY on Nasdaq). Casey’s owns 1,507 convenience stores in the U.S. Midwest. The stores offer a wide variety of food and non-food merchandise, as well as gas, under the names Casey’s General Store, HandiMart and Just Diesel. Casey’s has rejected Couche-Tard’s all-cash bid of $36 a share as inadequate. Casey’s is now trading at $39.32, which is 9.2% above Couche-Tard’s offer. That suggests investors expect a higher bid....

There’s no limit to the range of investment questions that members of Pat McKeough’s Inner Circle get to ask me and my investment associates.

Many members ask us about specific investments (such as stocks, exchange-traded funds and income trusts), that they are thinking of buying or selling....

Our Successful Investor business model has two parts. We publish investment advice, and we manage investor portfolios. This two-business model has advantages for our subscribers. The stock market investing problems we encounter as money managers, and the solutions we come up with, help us give our readers unbiased, practical advice. This serves as a counterweight to advice you may encounter elsewhere that is based on misapplied theory, or tainted by conflicts of interest.

Selling half after a double is not always the best stock market investing strategy

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It always pays to be skeptical when a company claims to have a have a revolutionary new invention or technology. That’s because, when you invest based on company marketing claims, you risk becoming too focused on the innovation and failing to look at the stock’s fundamentals, such as p/e ratios and other measures of value and risk. Sound-bite-based investing also ignores (or glosses over) a company’s industry position and the conditions within its particular market.

Many investors ignored the risks of solar-power stocks

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DUNDEEWEALTH INC., $14.78, symbol DW on Toronto, manages investments and operates a brokerage business. The company also owns the Dynamic family of mutual funds, and provides financial-planning and investment advice. DundeeWealth has raised its quarterly dividend by 100%, to $0.07 per share from $0.035. The shares now yield 1.9%. The company had already raised its dividend by 75%, to $0.035 per share from $0.02 with the October 2009 payment. DundeeWealth is still a buy....

In a recent TSI Network poll, we asked site visitors whether if trust the advice they get from their stock broker. Aside from a yes or no option, we gave visitors a third choice: “I trade online through a discount broker.” Seventy-five percent of the poll’s respondents selected this answer. You can see the full results of this poll, and a full archive of previous polls, on TSI Network. Just click the “Poll Archive” button below the main banner on the site’s home page.

Discounters’ lower commissions are a plus — but use caution

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Clairvest Group, $12.30, symbol CVG on Toronto, (Shares outstanding: 16.0 million; Market cap: $196.2 million) is a Toronto-based merchant bank that invests in both public and private corporations. It also provides investment advice. The company invests its own funds and those of third-party investors through three subsidiaries: Clairvest Equity Partners Limited Partnership, Clairvest Equity Partners III LP and Clairvest Equity Partners IV LP. Clairvest earns income from investments and management fees. Clairvest Group was founded in 1987 by Joseph Rotman. At the time, the company was known as Roy-L Merchant Group. It became the Clairvest Group in 1991. The company’s board of directors includes Isadore Sharp, founder of Four Seasons Hotels, Michael Bregman, founder of the Second Cup coffee chain and Joseph Heffernan, former chairman of Rothmans....

AEROPOSTALE INC. $34.83 (New York symbol ARO; SI Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding: 62.7 million; Market cap: $2.2 billion; No dividends paid) is splitting its shares on a 3-for-2 basis. Shareholders will get one additional Aeropostale share for every two shares they hold. The company will have 94 million outstanding shares after the split. It now has 62.7 million outstanding shares. When a stock splits, the percentage of the company that you own is unchanged. You simply hold more shares, which are each worth proportionally less. Some studies have shown that companies that split their shares are better investments than those that do not carry out splits, but that confuses cause and effect. When a company’s stock goes up a great deal, it has an incentive to split the stock and stop it from going to higher prices where it might be less liquid....

IMPERIAL METALS, $16.33, symbol III on Toronto, jumped 13% this week. That’s after the Supreme Court of Canada ruled that the company’s Red Chris copper/gold project in B.C. can proceed. Environmental groups had challenged the project because the federal government accepted permits issued by the B.C. government without conducting its own environmental assessment. Drilling at Red Chris continues to reveal very high grades of copper and gold. A feasibility study shows that the project contains enough reserves to support a mine with a 25-year life. The mine would eventually replace declining production at Imperial’s Mount Polley and Huckleberry mines....

When building your portfolio, it’s crucial to follow our stock investing advice of downplaying stocks that seem to be near-universally recommended by brokers and are getting a lot of favourable media coverage. That’s because, in investing, familiarity can breed excessive feelings of comfort, security and performance. After all, brokers get information from the media, investment journalists spend a lot of time talking to brokers, and company managers listen to both. A feedback loop can develop that spurs high expectations, derails criticism, and leads companies (and their investors) to make devastating mistakes. You may get the feeling that these are can’t-miss investments, and that it’s safe to buy and forget them. That’s exactly the wrong thing to do with these stocks. Our stock investing advice is that your in-the-limelight holdings are the ones you need to watch most closely....