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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Goldcorp, $21.13, symbol G on Toronto (Shares outstanding: 830.3 million; Market cap: $18.0 billion; www.goldcorp.com), is a Canadian-based gold miner. The company produces gold, silver and base metals. Its mines include Red Lake and three others in Canada (Porcupine, Musselwhite and Eleonore); Penasquito and Los Filos in Mexico; Marlin in Guatemala; the Cerro Negro and Alumbrera (37.5% interest) in Argentina; and Pueblo Viejo (40%) in the Dominican Republic. As well, Goldcorp has five projects in the development stage. In 2015, the company produced 3.5 million ounces of gold, up 20.6% from 2.9 million ounces in 2014. The increase mostly came from the start up of the Cerro Negro gold/silver mine in January 2015 and the Eleonore gold mine in April 2015. In the three months ended December 31, 2015, Goldcorp’s revenue rose 28.4%. That’s a jump from to $1.07 billion from $835.0 million, a year earlier. Cash flow rose 30.5%, to $338.0 million, or $0.41 a share, from $259.0 million, or $0.32 a share....
Ruckus Wireless Inc., $9.52, symbol RKUS on New York (Shares outstanding: 89.7 million; Market cap: $881.1 million; www.ruckuswireless.com), makes equipment that helps wireless carriers, high-speed Internet providers, individual businesses and schools improve the performance of their Wi-Fi networks. The company’s proprietary Smart Wi-Fi technology automatically adjusts wireless signal strength, frequencies and coverage area depending on the distance between the user and any physical obstacles such as walls. Over 260 wireless carriers and 65,000 businesses have now installed Ruckus’s equipment. The company first sold shares to the public on November 16, 2012, for $15.00 each....
Chicago Bridge & Iron Company NV, $34.97, symbol CBI on New York (Shares outstanding: 104.6 million; Market cap: $3.8 billion; www.cbi.com), is one of the world’s leading engineering and construction companies. It specializes in projects for the energy, petrochemical and natural resource industries. Netherlands-based Chicago Bridge was founded in 1889. The company’s projects include oil and gas processing plants, liquefied natural gas (LNG) terminals, offshore structures, bulk liquid terminals, and water storage and treatment facilities. Chicago Bridge also provides a range of maintenance and repair services. Customers include Shell, ExxonMobil, Chevron, Occidental Petroleum, ConocoPhillips, Saudi Aramco, Alcoa and BHP Billiton. Warren Buffett’s Berkshire Hathaway is Chicago Bridge’s biggest shareholder, with a 9.9% interest....
In all kinds of markets, investors may ask, “Is now a good time to buy stocks on margin?” The market has been going down for a year or so, and this appeals to bargain-hunting investors. In contrast, some investors only start to think about margin investing when stocks have been shooting up. Others pay less attention to market trends, and instead zero in on financial fundamentals or market-shaking news developments. The right answer to the question is all about your personal goals, finances and temperament. It has little to do with the market outlook. Buying stocks “on margin”—that is, using borrowed money to buy securities, regardless of whether you borrow from your broker or some other source—has certain key properties that apply in any market....
Koss Corp. $2.15, symbol KOSS on Nasdaq (Shares outstanding: 7.4 million; Market cap: $16.3 million; www.koss.com), began operating in 1958 when founder John C. Koss developed the first high-fidelity stereo headphones for consumers. The Koss family owns 78.06% of the stock. The name no doubt brings back warm memories for baby-boom audiophiles, since Koss was a top brand in the stereo music boom of the 1960s and 1970s. Stereo headphones now account for about 85% of the company’s sales. The remaining 15% comes from Bluetooth wireless speakers, computer headsets and related audio equipment. The company sells most of these products under the Koss brand. In December 2009, Koss’s former vice president of finance Sujata “Sue” Sachdeva was charged with fraud in U.S. federal court for embezzling $34 million from the company. She was later sentenced to 11 years in prison. As a result of the fraud, Koss has now restated five years of financials....
American International Group, $52.17, symbol AIG on New York (Shares outstanding: 1.1 billion; Market cap: $60.5 billion; www.aig.com), is a leading international insurance company serving customers in more than 130 countries. The company went through a severe downturn in the recession of 2008/2009. Its stock dropped from over $1,200 a share in 2007, to less than $10 in March 2009. The company has three segments: Chartis, its property & casualty insurance arm; SunAmerica Financial Group, its life, accident & health insurance company (also offering annuities, mutual funds and financial planning services); and Financial Services, a business focused on commercial aircraft leasing. In late 2015, investors Carl Icahn and John Paulson launched a campaign to force AIG to split into three separate businesses. The two felt that AIG had significantly underperformed other insurance firms. They were also worried that its corporate structure was too complex to keep costs under control and that would prevent the stock from achieving its full value. As well, the company’s size subjects it to greater regulation and capital requirements than it would face if divided into independent businesses....
Aecon Group Inc., $14.77, symbol ARE on Toronto (Shares outstanding: 56.9 million; Market cap: $853.4 million; www.aecon.com), is one of Canada’s largest infrastructure developers. The company and its predecessors helped to build Canadian landmarks such as the CN Tower, the St. Lawrence Seaway, the Calgary Olympic Oval and the Halifax Shipyards. Aecon has three main divisions: The energy group accounted for 43% of the company’s revenue in the latest quarter. It builds facilities and components for clients in the power industry, including nuclear reactors....
Intertape Polymer, $17.18, symbol ITP on Toronto (Shares outstanding: 58.7 million; Market cap: $1.0 billion; www.intertapepolymer.com), develops and makes a variety of pressure-sensitive and water-activated sealing tapes, woven-coated fabrics and a range of packaging. It has 11 plants in North America and one in Europe. Intertape’s sales fell 4.1% in the three months ended September 30, 2015, to $200.6 million from $209.1 million a year earlier. (All figures except share price and market cap in U.S. dollars.) The fall was mostly due to start-up costs at a new plant in South Carolina. Meanwhile, the company earned $12.9 million, or $0.21 a share, before one-time items in the latest quarter. That was down 7.9% from $14.0 million, or $0.22 a share. The decline came from the lower sales, as well as higher research and income tax expenses....
BCE INC. $57.77 (Toronto symbol BCE; Shares outstanding: 865.4 million; Market cap: $50.7 billion; TSINetwork Rating: Above Average; Dividend yield: 4.7%; www.bce.ca) continues to benefit from strong demand for its wireless, high-speed Internet and Fibe TV services. That’s offsetting weaker revenue from traditional telephone services. In the three months ended December 31, 2015, the company’s revenue rose 1.4%, to $5.60 billion from $5.53 billion. Per-share profits were unchanged at $0.72. During the quarter, the company added 91,308 wireless subscribers under long-term contracts. That’s down from 118,120 a year earlier, mainly due to strong competition over the winter holiday. However, smartphone users now account for 78% of these customers, up from 76% a year earlier. That’s good news, as smartphones generate higher monthly fees than regular cellphones....
BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. $37.27 (Toronto symbol BEP.UN; Units outstanding: 265.2 million; Market cap: $10.1 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.6%; www.brookfieldrenewable.com) owns 207 hydroelectric generating stations, 37 wind farms and five natural gas-fired plants. In all, it has over 7,284 megawatts of generating capacity. Roughly 24% of that capacity is in Canada, with another 50% in the U.S., 13% in Latin America and 8% in Europe. In the three months ended September 30, 2015, Brookfield’s cash flow per share rose 2.2%, to $0.46 from $0.45 a year earlier....