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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Western Forest Products, $1.81, symbol WEF on Toronto (Shares outstanding: 394.8 million; Market cap: $746.2 million; www.westernforest.com), is the largest woodland manager and lumber producer on the B.C. coast. The company has an annual available harvest of 6.4 million cubic metres of timber, of which 6.2 million comes from Crown lands. It can also process more than 1.1 billion board feet of lumber at seven sawmills and two remanufacturing plants. Western’s main activities include timber harvesting, reforestation and sawmilling logs into lumber and by-products (such as wood chips). Its products are sold in more than 25 countries....
Precision Castparts Corp., $213.79, symbol PCP on New York (Shares outstanding: 141.8 million; Market cap: $30.2 billion; www.precast.com), makes complex metal components and other products for aerospace and industrial firms. The company has three divisions:
- Forged Products (42% of total sales) manufactures specialized parts for jet engines, landing gear and other aerospace machinery, as well as industrial gas turbines and pipes. It makes these products from nickel alloys, steel and titanium.
- Airframe Products (32%) makes aircraft wings, fuselages, passenger doors and fasteners. It also produces parts for the power-generation and industrial markets.
First Capital Realty Inc., $19.76, symbol FCR on Toronto (Shares outstanding: 220.9 million; Market cap: $4.4 billion; www.firstcapitalrealty.ca), owns, develops and operates shopping centres throughout Canada. It focuses on big cities, including Toronto, Montreal, Calgary, Vancouver, Ottawa and Edmonton. First Capital owns interests in 157 properties. Supermarkets and drugstores account for 31% of its rental revenue, followed by national and discount retailers (15%), medical clinics, gyms and daycare facilities (14%), restaurants (13%) and banks and government offices (11%). Other retailers supply the remaining 16%. The company’s largest tenants include Sobeys, Loblaw, Metro, Canadian Tire, Wal-Mart and Dollarama....
SBA Communications Corp., $119.91, symbol SBAC on Nasdaq (Shares outstanding: 129.1 million; Market cap: $15.6 billion; www.sbasite.com), builds and operates cellular communication towers in the U.S., Puerto Rico, the U.S. Virgin Islands, Canada, Costa Rica, Panama, El Salvador, Guatemala, Nicaragua and Brazil. As of December 31, 2014, the company owned 24,292 towers (62% in the U.S.). It also manages or leases an additional 5,000. SBA gets 90% of its revenue from leasing space on its towers to wireless carriers, including AT&T, Verizon, Sprint Nextel and T-Mobile. The remaining 10% comes from site-development services, including identifying locations for new towers and installing radio gear....
PowerShares WilderHill Clean Energy Portfolio ETF, $5.75, symbol PBW on New York (Units outstanding: 25.0 million; Market cap: $143.8 million; www.invesco.com), aims to replicate the performance of the WilderHill Clean Energy Index, which is made up of 53 companies that focus on renewable power, energy conservation or efficiency. The fund’s top holdings are Hanwah Q Cells Co. (ADR), TerraForm Power, Renewable Energy Group, Ormat Technologies, Pattern Energy Group, China Ming Yang Wind Power Group (ADR), Solazyme Inc., Enphase Energy, Air Products and Chemicals, and PowerSecure International. This ETF takes on a lot of risk with its holdings, which include a number of Chinese stocks and companies that are heavily dependent on government subsidies....
Target’s exit from Canada means less competition for Loblaw, but the company still plans to aggressively expand and improve its stores. This year, it will spend $1.2 billion to build 50 new outlets, renovate 100 others, improve its online presence and further upgrade its warehousing and computer systems. This should keep the company’s sales and profits growing in the extremely competitive Canadian grocery market. LOBLAW COMPANIES $61.92 (Toronto symbol L; Shares outstanding: 412.5 million; Market cap: $25.6 billion; TSINetwork Rating: Above Average; Dividend yield: 1.6%; www.loblaw.ca) is Canada’s largest food retailer, with about 1,200 stores. Its banners include Loblaws, Provigo, Fortinos, Real Canadian Superstore and No Frills. George Weston Ltd. owns 46% of the company. In the three months ended January 3, 2015, Loblaw’s sales jumped 49.4%, to $11.4 billion from $7.6 billion a year earlier. The gain was mainly due to the 1,300-store Shoppers Drug Mart chain, which the company bought in March 2014. Same-store sales rose 3.3% at Loblaw’s supermarkets and 3.8% at Shoppers....
The new TSI Network You will soon see the results of a major upgrade to the design, functionality and performance of our TSI Network website (www.tsinetwork. ca). Rather than simply making cosmetic changes to the site we launched in 2009, we have taken advantage of the latest technology and our own growth as a company to give the site an advanced redesign. As a Canadian Wealth Advisor subscriber, you will immediately see significant improvements....
Pembina Pipeline and Veresen both trade at high multiples to their per-share cash flow, but both have strong growth prospects and high dividend yields. We think they have gains ahead. PEMBINA PIPELINE $40.02 (Toronto symbol PPL; Shares outstanding: 336.0 million; Market cap: $13.5 billion; TSINetwork Rating: Average; Dividend yield: 4.4%; www.pembina.com) owns pipelines that carry half of Alberta’s conventional oil, 30% of Western Canada’s natural gas liquids (NGLs) and almost all of B.C.’s conventional oil. Pembina also owns extensive facilities to extract, process and store NGLs....
TELUS $42.07 (Toronto symbol T; Shares outstanding: 609.0 million; Market cap: $25.7 billion; TSINetwork Rating: Above Average; Dividend yield: 3.8%; www.telus.com) continues to expand its health care division, which helps doctors, pharmacies and hospitals convert patient records and other information to electronic formats. The company recently paid an undisclosed sum for Quebec-based Medesync, a privately held maker of cloud-based software that lets doctors access patient data and other information from any computer or mobile device. Medesync’s software also makes it easier for doctors to schedule checkups, view test results and process billing. As well, Medesync is linked to over 3,000 Quebec pharmacies, so doctors can submit a patient’s prescription directly....
Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index. ETFs trade on stock exchanges, just like stocks. That’s different from mutual funds, which you can only buy at the end of the day at a price that reflects the fund’s value at the close of trading. Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds....