How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
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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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A: We haven’t found any infrastructure stocks we want to recommend as buys. But here’s a look at one of the hold recommendations by Stock Pickers Digest—as well as two prominent U.S. companies in the industry. Stantec, $33.18, symbol STN on Toronto (Shares outstanding: 93.9 million; Market cap: $3.1 billion; www.stantec.com), is a recommendation of Stock Pickers Digest. The company offers consulting and project management services for public works and a variety of facilities. It benefits from infrastructure investments all over North America. Stantec continues to grow by acquisition. At the same time, it cuts its costs by spreading administrative expenses, financing and employee benefits among its businesses and new acquisitions. But continually buying firms adds risk, including the risk of writedowns....
A: WSP Global Inc., $40.00, symbol WSP on Toronto (Shares outstanding: 99.7 million; Market cap: $4.0 billion; www.wspgroup.com), is a consultant on engineering projects for public- and private-sector clients around the world. It employs about 34,000 people, mainly engineers, technicians, scientists, environmental experts and architects. It has more than 500 offices across 40 countries. WSP has a long history of using acquisitions to expand. As a result, its revenue soared from $651.0 million in 2011 to $6.1 billion in 2015. Mainly due to the costs of integrating these new businesses, the company’s earnings fell from $1.91 a share (or a total of $50.1 million) in 2011 to $1.15 a share (or $46.3 million) in 2012. Earnings then rose to $1.38 a share (or $71.7 million) in 2013. They then dropped again to $0.98 a share (or $62.8 million) in 2014....
A: Broadcom Ltd., $153.72, symbol AVGO on Nasdaq (Shares outstanding: 390.3 million; Market cap: $60.9 billion; www.broadcom.com), took its current form on February 1, 2016. That’s when Singapore-based Avago Technologies Ltd. acquired Broadcom for $37 billion in cash and shares. As a result, Broadcom shareholders now own about 32% of the combined company. Following the merger, Avago changed its name to Broadcom. However, it continues to use the AVGO trading symbol. The new company specializes in chips for use in wired networks, wireless communications, enterprise storage and industrial applications. Its products go into devices such as TV set-top boxes, cable modems, high-speed networks, mobile phones and GPS devices....
A: Savaria Corp., $7.29, symbol SIS on Toronto (Shares outstanding: 32.6 million; Market cap: $227.8 million; www.savaria.com), makes products for people with limited mobility. The company has two main businesses: Accessibility (87% of revenue) makes stairlifts, platform lifts and elevators for homes and businesses....
Nobel Prizes for scientific discoveries—particularly in physics, chemistry, physiology, medicine and economics—often go to two or three individuals. (Three is the maximum that Nobel rules allow.) You might think these groups are made up of people who were working together. In fact, the Nobel winners often worked independently from each other. Historians refer to this as “multiple independent discovery.” It’s a common pattern in science, and goes back centuries. For instance, Isaac Newton (1642–1726) commonly gets credit for the discovery of calculus (the mathematical study of rates of change). Newton was an English physicist and mathematician (described in those days as a “natural philosopher”). His work made him the obvious choice for the honour, especially in the English-speaking world. However, Gottfried Wilhelm Leibniz (1646–1716) claimed to have developed calculus independently of Newton. Liebniz was a German philosopher and polymath (an intellectual jack-of-all-trades), so his claim to the discovery carried less weight. A rivalry developed between them. They sniped at each other when speaking to groups of intellectuals, and their dispute grew more bitter as time passed....
D-BOX Technologies Inc., $0.51, symbol DBO on Toronto (Shares outstanding: 174.9 million; Market cap: $89.2 million; www.d-box.com), has developed technology for enhancing the experience of movies, amusement park rides and training simulators. The company mainly sells its products to movie theatre operators. Once that technology is placed inside theatre seats, it causes them to sway and vibrate during the film. D-BOX is also able to synchronize the movement of the chairs to match the action on the movie screen. It uses digital codes with visual and sound cues embedded in them. The Caisse de dépôt et placement du Québec is D-BOX’s largest shareholder, with an 11.67% stake....
Flowers Foods Inc., $18.53, symbol FLO on New York (Shares outstanding: 212.3 million; Market cap: $3.9 billion, www.flowersfoods.com), is a leading maker of fresh baked goods, including breads, buns, rolls, tortillas and snack cakes. Its main brands include Nature’s Own, Wonder Bread, Whitewheat, Cobblestone Bread Co., Tastykake, Home Pride and Mrs. Freshley’s. The company has two major businesses: Direct Store Delivery (84% of 2015 sales) operates 39 bakeries that supply products to supermarkets, other food retailers and restaurants through 5,100 independent distributors....
Dollar General Corp., $82.27, symbol DG on New York (Shares outstanding: 286.4 million; Market cap: $23.6 billion; www.dollargeneral.com), operates 12,575 discount stores in 43 states. About 70% of the company’s outlets serve communities with populations of 20,000 or less. The sales mix of Dollar General’s stores is as follows: consumables (including beverages and snacks, paper and cleaning products, pet supplies, and health and beauty items), 75.9%; seasonal (decorations, toys and gardening), 12.4%; home products (kitchen supplies, light bulbs and bed and bath goods), 6.3%; and basic apparel, 5.4%. The company’s motto is “Save time. Save money. Every day!” Most of the items it sells are priced under $10, with about 75% at $5 or less....
DirectCash Payments Inc., $11.70, symbol DCI on Toronto (Shares outstanding: 17.6 million; Market cap: $205.4 million; www.directcash.net), is the largest non-bank owner and operator of automated teller machines in Canada, Australia and New Zealand, and the third-largest in the U.K. It also operates ATMs in Mexico. In addition, the company serves credit unions and other small financial institutions that outsource their ATM transactions. As of December 31, 2015, DirectCash had 21,454 active ATMs, up 1.7% from 21,103 a year earlier. Its machines processed 132.5 million transactions in 2015, up 7.2% from 123.6 million....
Open Range Energy, $6.82, symbol ONR on Toronto (Shares outstanding: 60.9 million; Market cap: $468.2 million; www.openrangeenergy.com), is an oil and natural gas producer that operates in Alberta. In June 2010, Open Range began a new business: renting its Poseidon Concepts fracturing fluid tanks to producers of shale oil and shale gas. Shale gas and shale oil are trapped in rock formations. To extract them, companies must pump water and chemicals (fracturing fluids) into the rock. This fractures the rock and releases the natural gas or oil. Open Range now rents 100 tank systems across North America. The company believes that its large tanks are more efficient than other tanks, because they can hold much more fracturing fluid, are easier to transport, and have a more efficient fluid-heating process. Open Range designed the tanks, but other companies make them....