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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Brookfield Property Partners LP, $29.75, symbol BPY.UN on Toronto (Units outstanding: 262.8 million; Market cap: $21.3 billion; www.brookfieldpropertypartners.com), owns, operates and invests in commercial real estate worldwide. Its portfolio includes:
- 243 office properties totalling over 114 million square feet, mainly in leading commercial markets like New York, London, Los Angeles, Washington, D.C., Sydney, Toronto, Houston, Calgary and Perth;
- 172 regional malls and stand-alone stores containing 154 million square feet in the U.S. and Brazil. The company mainly holds its retail properties through its 29% interest in General Growth Properties, Inc. and its 33% stake in Rouse Properties, Inc.;
- Roughly 44 million square feet of industrial space across 164 properties, mainly consisting of warehouses in North America and Europe, with an additional 11 million square feet under construction;
- About 26,900 multi-family units across 89 properties in the U.S. and Canada;
- Eleven hotels with over 8,560 rooms across North America and Australia; and
- Over 300 properties leased to automotive dealerships in the U.S. and Canada.
CVS Health Corp., $93.79, symbol CVS on New York (Shares outstanding: 1.1 billion; Market cap: $103.7 billion; www.cvshealth.com), has two main businesses:
- The Pharmacy Services division (66% of revenue) helps employers, insurers, unions and government agencies manage their drug-coverage plans. It also distributes prescription drugs to patients through the mail, as well as to 68,000 U.S. pharmacies.
- The Retail Pharmacy division (34%) operates over 7,900 drugstores in 44 U.S. states, Puerto Rico and Brazil. Many of these outlets also feature walk-in clinics.
Genworth MI Canada, $29.92, symbol MIC on Toronto (Shares outstanding: 91.8 million; Market cap: $2.7 billion; www.genworth.ca), is a leading Canadian residential mortgage insurer. It provides this service through its subsidiary, Genworth Financial Mortgage Insurance Company of Canada. Right now, it has $390 billion of insurance policies written. In the three months ended September 30, 2015, Genworth’s revenue rose 19.9%, to $260.1 million from $217.0 million a year earlier. Earnings per share gained 3.1%, to $1.00 from $0.97. Genworth continues to gain market share, and it aims to manage both its credit risk and its investment portfolio conservatively. Still, it needs Canadian housing markets to remain stable, or at least suffer just a modest decline in activity, to keep reporting improved results....
Medical Facilities Corp., $15.65, symbol DR on Toronto (Shares outstanding: 31.3 million; Market cap: $487.8 million, www.medicalfacilitiescorp.ca), owns majority interests in four specialty surgical hospitals in South Dakota, Oklahoma and Arkansas, as well as an ambulatory surgery centre in California. The specialty hospitals perform scheduled surgical, imaging and diagnostic procedures. Their revenue comes from fees they charge for the use of their facilities. The ambulatory surgery centre specializes in outpatient surgical procedures. Patients typically stay in this facility for less than 24 hours. On June 4, 2015, the company sold its 65%-owned Dakota Plains Surgical Center in South Dakota for $33.8 million. Medical Facilities’ share of the gain on the deal was $9.3 million after tax....
If you own and operate your own small, successful business—or invest in one—you can earn much better returns than you get from investing in the stock market. That’s because risk is higher in small private companies, so they sell at a lower average P/E ratios than public companies. In addition, as the owner of such a company (or a favoured insider), you have a lot of tax deferral opportunities that are unavailable to a public investor. However, along with higher overall risk, private business has other negatives....
Big Rock Brewery Inc., $5.60, symbol BR on Toronto (Shares outstanding: 6.9 million; Market cap: $38.5 million; www.bigrockbeer.com), is a Calgary-based regional maker of draft and bottled beer. Big Rock brews premium beers without preservatives, using cold-sterile filtration instead of traditional pasteurization. Popular brands include Traditional Ale, Grasshopper Wheat Ale and Warthog Ale. The company sells its beers in nine provinces and two territories. It also exports them to South Korea. In April 2015, Big Rock opened a brewery and eatery in Vancouver. It plans to build a second one, in Toronto, next year....
Methanex Corp., $53.82, symbol MX on Toronto (Shares outstanding: 90.3 million; Market cap: $4.9 billion; www.methanex.com), is a Vancouver-based methanol producer and distributor. It’s the world’s largest methanol supplier, with an estimated 15% market share. The company produces 70% of its methanol in New Zealand and Trinidad (where it holds a 63.1% stake in Atlas Methanol). It makes a further 18% in the U.S., 7% in Medicine Hat, Alberta, 4% in Chile and 1% in Egypt. Methanex also resells methanol produced by others. Methanol is usually made by mixing natural gas with steam, then putting the resulting gas mixture through a liquid conversion and distillation process to create pure methanol, a clear, liquid hydrocarbon that is water-soluble and biodegradable....
Toronto-based InvestEco Capital is now launching a second InvestEco Sustainable Food Fund. These funds are limited partnerships that invest in small to medium-sized private companies in the growing North American market for natural and healthy foods. To invest in the fund, you must either buy $150,000 worth of units or qualify as an accredited investor. Generally speaking, accredited investors must live in Canada and have a certain minimum income or financial asset level....
Q: Pat: Can you suggest some U.S. ETFs that are set up to move in the opposite direction of particular stock indexes, rather than in the same direction? Regards. A: U.S.-based ProShares offers a range of exchange traded funds for U.S. stock indexes. The company offers three types of ETFs: 1) ProShares Short ETFs are designed to move in the opposite direction of the underlying index. For example, ProShares Short S&P500, $20.77, symbol SH on New York, aims to move in the opposite direction of the daily performance of the S&P 500 Index. This ETF has a 0.90% MER....
CP Rail hit an all-time high of $248 in October 2014, following a major cost-cutting plan put in place by CEO Hunter Harrison, who was installed by a prominent U.S. hedge fund in 2012. The stock has moved down lately, as the railway has shipped less crude oil and other commodities. However, CP’s improving efficiency sets it up for more gains as the economy rebounds. CANADIAN PACIFIC RAILWAY $181.50 (Toronto symbol CP; Shares outstanding: 161.0 million; Market cap: $27.8 billion; TSINetwork Rating: Above Average; Yield: 0.8%; www.cpr.ca) ships freight over a 22,000-kilometre rail network between Montreal and Vancouver and links with hubs in the U.S. Midwest and northeast. In the three months ended September 30, 2015, CP’s earnings per share rose 16.5%, to $2.69 from $2.31 a year earlier. Revenue increased 2.3%, to $1.71 billion from $1.67 billion....