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: Walt Disney Co., $112.34, symbol DIS on New York (Shares outstanding: 1.7 billion; Market cap: $180.8 billion; www.thewaltdisneycompany.com), is a family-focused entertainment and media firm. It’s also the world’s largest theme park operator.
It is among the world’s best-known brand names.
The company has five main business segments:
It is among the world’s best-known brand names.
The company has five main business segments:
- Media Networks (44% of revenue) includes ABC Television, ESPN, the Disney Channel, ABC Family and SOAPnet (a cable channel devoted to soap operas). Disney produces films and television programs under the ABC Studios, Buena Vista Productions and ABC Family Productions labels. It also holds interests in Lifetime Entertainment Services (a women’s cable channel) and A&E Television Networks.
- Parks and Resorts (31% of revenue) includes the Disney Cruise Line, 12 Disney Vacation Club resorts and Adventures by Disney (which plans guided international trips for families). Disney’s resort locations include Disneyland Resort in California, Walt Disney World Resort in Florida, Tokyo Disney Resort, Disneyland Resort Paris and Hong Kong Disneyland.
A: Avis Budget Group Inc., $33.58, symbol CAR on Nasdaq (Shares outstanding: 100.3 million; Market cap: $3.3 billion; www.avisbudgetgroup.com), rents cars and trucks under the Avis and Budget banners at more than 10,000 locations in 175 countries. It also owns Zipcar, a leading vehicle-sharing service with 950,000 members. In all, the company has roughly 540,000 vehicles in its fleet.
The Avis brand supplies 65% of total revenue, followed by Budget (30%) and Zipcar (5%). About 70% of Avis Budget’s revenue comes from rentals at airports.
In the three months ended September 30, 2015, the company ’s revenue rose 1.4%, to $2.58 billion from $2.54 billion a year earlier. Without the negative impact of the high U.S. dollar, which hurts the contribution from its foreign operations, revenue gained 8%.
The company’s total number of rental days (or the days a vehicle was rented) rose 9.6%. However, unfavourable exchange rates cut average revenue per day by 7.7%.
Earnings fell 1.4%, to $206 million from $209 million. Avis spent $161 million on share buybacks during the quarter. Due to fewer shares outstanding, per-share profits improved 3.7%, to $1.98 from $1.91.
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The Avis brand supplies 65% of total revenue, followed by Budget (30%) and Zipcar (5%). About 70% of Avis Budget’s revenue comes from rentals at airports.
In the three months ended September 30, 2015, the company ’s revenue rose 1.4%, to $2.58 billion from $2.54 billion a year earlier. Without the negative impact of the high U.S. dollar, which hurts the contribution from its foreign operations, revenue gained 8%.
The company’s total number of rental days (or the days a vehicle was rented) rose 9.6%. However, unfavourable exchange rates cut average revenue per day by 7.7%.
Earnings fell 1.4%, to $206 million from $209 million. Avis spent $161 million on share buybacks during the quarter. Due to fewer shares outstanding, per-share profits improved 3.7%, to $1.98 from $1.91.
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American Hotel Income Properties REIT, $10.30, symbol HOT.UN on Toronto (Units outstanding: 34.8 million; Market cap: $354.8 million, www.ahipreit.com), owns 79 hotels comprising 6,891 rooms in 27 U.S. states.
Of that total, 44 of its hotels (which operate under the Oak Tree Inn brand) mainly house railway employees.
American Hotel believes this is a profitable niche market, as contracts with large railways keep occupancy rates high relative to the overall hospitality industry. The hotels are close to large rail-switching yards and hubs, and the railways guarantee to keep them about 76% occupied. The specially designed buildings feature crew shuttles and 24-hour food service.
The remaining 35 hotels operate under a variety of licensed banners, including Hilton, Holiday Inn and Marriott.
American Hotel began trading in February 2013, after it sold 10.1 million units to the public at $10.00 each.
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Of that total, 44 of its hotels (which operate under the Oak Tree Inn brand) mainly house railway employees.
American Hotel believes this is a profitable niche market, as contracts with large railways keep occupancy rates high relative to the overall hospitality industry. The hotels are close to large rail-switching yards and hubs, and the railways guarantee to keep them about 76% occupied. The specially designed buildings feature crew shuttles and 24-hour food service.
The remaining 35 hotels operate under a variety of licensed banners, including Hilton, Holiday Inn and Marriott.
American Hotel began trading in February 2013, after it sold 10.1 million units to the public at $10.00 each.
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A: NorthWest HealthCare Properties REIT, $8.10, symbol NWH.UN on Toronto (Units outstanding: 52.5 million; Market cap: $420.2 million; www.nwhp.ca), owns 123 properties, with a focus on medical office buildings and clinics (70% of its portfolio) and hospitals (30%). The real estate investment trust is Canada’s largest non-government owner and operator of medical office buildings.
In all, NorthWest’s properties contain 8.0 million square feet of leasable area. Its Canadian holdings are concentrated in Calgary, Edmonton, Toronto, Montreal, Quebec City and Halifax. It also owns buildings in Brazil, Germany, Australia and New Zealand. NorthWest has a 95.8% occupancy rate.
The REIT first sold units to the public for $10 each and began trading on Toronto on March 25, 2010.
In the three months ended September 30, 2015, NorthWest’s revenue jumped to $63.3 million from $11.8 million a year earlier. That’s because it recently merged with its international affiliate in an all-stock transaction.
Cash flow jumped 67.4%, to $14.4 million from $8.6 million. However, cash flow per unit fell 20.0%, to $0.20 from $0.25, on more units outstanding after the merger.
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In all, NorthWest’s properties contain 8.0 million square feet of leasable area. Its Canadian holdings are concentrated in Calgary, Edmonton, Toronto, Montreal, Quebec City and Halifax. It also owns buildings in Brazil, Germany, Australia and New Zealand. NorthWest has a 95.8% occupancy rate.
The REIT first sold units to the public for $10 each and began trading on Toronto on March 25, 2010.
In the three months ended September 30, 2015, NorthWest’s revenue jumped to $63.3 million from $11.8 million a year earlier. That’s because it recently merged with its international affiliate in an all-stock transaction.
Cash flow jumped 67.4%, to $14.4 million from $8.6 million. However, cash flow per unit fell 20.0%, to $0.20 from $0.25, on more units outstanding after the merger.
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Many investors are reading the news intently these days, in hopes of spotting a sign that the drop in oil prices has ended. They assume that if they get in at just the right moment, they’ll be able to take advantage of another of the violent upswings that the oil market has put on in the past, after a downturn like the one now underway. One investor wrote: “When oil dropped, I waited but not long enough. I bought $50,000 of Chevron and $40,000 of Imperial. Imperial is down about $4,000 and I have a $2,000 profit on Chevron. I’m thinking about selling the Chevron and maybe wait to see if it drops more later. I have to ride out the Imperial Oil.” This is a bad way to invest, but especially in a volatile, worldwide market like oil, and all the more so today. It’s easy to look at a long-term history of oil prices and detect what you feel is a clear, recurring pattern. However, these patterns occur in response to supply and demand in the market, and both are constantly changing....
Aecon Group Inc., $13.50, symbol ARE on Toronto (Shares outstanding: 56.5 million; Market cap: $769.1 million; www.aecon.com), is one of Canada’s largest infrastructure developers. The company and its predecessors built Canadian landmarks like the CN Tower, the St. Lawrence Seaway, the Calgary Olympic Oval and the Halifax Shipyards. Aecon has three main divisions: •The energy group, which accounted for 39% of the company’s revenue in the latest quarter, builds facilities and components for clients in the power industry, including nuclear reactors....
Orbite Technologies Inc., $0.44, symbol ORT on Toronto (Shares outstanding: 380.5 million; Market cap: $165.5 million; www.orbitetech.com), is the new name of Orbite Aluminae. The company has developed a way to extract alumina (which is used in the production of aluminum) and other metals—including rare ones like scandium and gallium—from mud, clay, mine tailings, bauxite and other materials. Unlike other methods, including the industry-standard Bayer process, Orbite’s approach doesn’t produce toxic waste. The company considered its pilot project a success, and it hopes to have its long-delayed three-tonne-per-day, high-purity alumina plant in operation by the end of this year. However, it’s far from certain whether Orbite’s process will be a commercial success, and it’s also unclear whether commodity producers will switch from the proven—and familiar—Bayer process unless environmental legislation forces them to. That adds a lot of risk....
Surge Energy, $2.01, symbol SGY on Toronto (Shares outstanding: 220.9 million; Market cap: $446.4 million; www.surgeenergy.ca), produces oil and gas in central and northwestern Alberta and southwestern Saskatchewan. Its output is 83% oil and 17% gas. In response to lower oil prices, and to pay down its debt, the company sold 5,300 barrels of oil equivalent of daily production in two transactions for $465 million earlier this year. It also unwound its crude oil hedging contracts for 2015 and realized a gain of over $35 million. Surge’s long-term debt now stands at $131.0 million, or a reasonable 24% of its market cap, down from $564.3 million at the end of 2014....
Marine Harvest ASA (ADR), $13.25, symbol MHG on New York (ADRs outstanding: 450.1 million; Market cap: $6.1 billion; www.marineharvest.com), produces and sells farmed salmon and other fish products worldwide. The Norway-based company was founded in 1965. Marine Harvest’s largest market is Europe, which supplies 71% of its sales. North and South America account for 18% of sales, while 9% come from Asia. The company is one of the world’s largest fish suppliers and the No. 1 farmed salmon producer. It also sells trout and whitefish, but salmon is its most important product: in 2014, it produced 414,000 tons, giving it 27% of the global farmed-salmon market....
Orchids Paper Products Co., $29.08, symbol TIS on New York (Shares outstanding: 10.3 million; Market cap: $298.2 million; www.orchidspaper.com), makes a variety of private label tissue products, including paper towels, napkins and bathroom tissue. It mainly sells these items through small discount retailers and dollar store chains (Dollar General is its largest customer). Other buyers include companies in the janitorial and restaurant industries and other paper-product makers. Orchids focuses on markets within 500 miles of its main plant in Oklahoma. That keeps its delivery costs low and helps it compete in what is a very price-sensitive market. Through an alliance with a Mexican tissue maker, it also distributes products in the western U.S. The company is now building a second plant in South Carolina. This $127-million facility should start up in early 2016. Orchids recently sold 1.5 million shares at $23.00 each to raise $34.5 million to help pay for the plant’s construction....