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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How To Invest Library Archives
BANK OF NOVA SCOTIA $63.54 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $76.2 billion; TSINetwork Rating: Above Average; Dividend yield: 4.3%, www.scotiabank.com) reported revenue of $5.9 billion in its fiscal 2015 first quarter, which ended January 31, 2015. That was up 3.9% from $5.6 billion a year earlier. Excluding unusual items, the bank earned $1.36 a share, up 1.5% from $1.34. Gains at Bank of Nova Scotia’s securitiestrading division offset lower profits in Canadian and international banking....
NEWMONT MINING $21.71 (New York symbol NEM; Shares outstanding: 498.9 million; Market cap: $11.0 billion; TSINetwork Rating: Average; Dividend yield: 0.5%; www.newmont.com) is the world’s second-biggest gold producer after Barrick Gold (symbol ABX on Toronto). Newmont has mines in North America, South America, Australia, New Zealand, Indonesia and Africa. The company’s cash flow per share fell 5.0% in 2014, to $3.45 from $3.63 in 2013. Aggressive cost-cutting failed to offset a 10% decline in realized gold prices....
CRESCENT POINT ENERGY CORP. $28.24 (Toronto symbol CPG; Shares outstanding: 443.4 million; Market cap: $12.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 9.8%; www.crescentpointenergy.com) produces oil and natural gas in Western Canada, with a focus on its Bakken light oil development in southeastern Saskatchewan. Its output is 92% oil and 8% gas. In the three months ended December 31, 2014, Crescent Point’s cash flow rose 7.4%, to $572.9 million from $533.3 million a year earlier. The company raised its daily output by 20.5%, which offset lower oil prices and increased its cash flow. Cash flow per share fell 5.2%, to $1.28 from $1.35, because the company issued shares to pay for acquisitions, including $378.0 million for oil properties from Lightstream Resources in September 2015....
ENCANA $14.14 (Toronto symbol ECA; Shares outstanding: 741.1 million; Market cap: $10.3 billion; TSINetwork Rating: Average; Div. yield: 2.5%; www.encana.com) has sold 98.5 million shares for $14.60 each to raise $1.44 billion. The company will use these funds to redeem $1.6 billion worth of notes. As of December 31, 2014, Encana’s long-term debt was $7.3 billion U.S., or a high 90% of its $10.3-billion (Canadian) market cap. The stock sale has increased Encana’s total shares outstanding by roughly 13%. However, paying down debt will cut the company’s interest costs and help it conserve cash until oil and gas prices rebound. It could also use the savings to make acquisitions at bargain prices....
SUN LIFE FINANCIAL $39.03 (Toronto symbol SLF; Shares outstanding: 612.7 million; Market cap: $24.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.sunlife.ca) sells life insurance, savings, retirement and pension products to individuals and corporations. Sun Life has $734.4 billion of assets under management. It mainly operates in Canada, the U.S. and the U.K., but it continues to expand in Asia. In 2013, it sold its riskier, money-losing U.S. annuity business, which sells products that guarantee minimum long-term returns even if markets fall....
ALGONQUIN POWER & UTILITIES $9.36 (Toronto symbol AQN; Shares outstanding: 238.9 million; Market cap: $2.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.7%; www.algonquinpower.com) reports that its revenue rose 26.3% in the three months ended December 31, 2014, to $259.3 million from $205.3 million a year earlier. Cash flow per share jumped 22.7%, to $0.27 from $0.22. The gains mostly came from acquisitions, including California’s Park Water for $327 million U.S. in September 2014. Growth by acquisition adds risk. But Algonquin cuts that risk by buying profitable utilities like Park Water. It also ensures that its renewable energy projects sell their power under long-term government-guaranteed contracts....
POWER CORP. $33.52 (Toronto symbol POW; Shares outstanding: 412.6 million; Market cap: $15.5 billion; TSINetwork Rating: Above Average; Div. yield: 3.5%; www.powercorporation.com) is a diversified holding company. It holds its financial assets through 65.7%-owned Power Financial. These financial assets include 68.1% of Great- West Lifeco, one of Canada’s largest life insurers, and 58.7% of IGM Financial, a leading Canadian mutual fund provider. As well, Power Financial owns 50% of holding company Parjointco, which holds a 55.5% stake in Switzerland-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European firms: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), SGS (inspection, testing and certification services) and Lafarge (cement and building materials). Power Corp. also has investments in Asia....
TORSTAR $6.44 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $521.0 million; TSINetwork Rating: Average; Dividend yield: 8.2%; www.torstar.com) earned $20.9 million in the three months ended December 31, 2014, up 31.9% from $15.8 million a year earlier. Earnings per share rose 30.0%, to $0.26 from $0.20, on more shares outstanding. These figures include costs related to job cuts and other measures in response to falling advertising revenue at Torstar’s newspapers. If you disregard unusual items, the company’s per share earnings fell 11.8%, to $0.30 from $0.34. Torstar is debt-free and held cash and investments of $290.2 million, or $3.62 a share, as of December 31, 2014. It continues to pay a quarterly dividend of $0.13125 a share, for a high 8.2% annualized yield....
Opportunism is the source of a lot of the conflicts of interest that you run into as an investor. The term “opportunism” carries negative connotations for a lot of people. But ambitious people and organizations, in the private sector and elsewhere, are always looking for growth opportunities. Some are careful about the opportunities they pursue, to avoid outcomes that can cause problems for themselves and their clients. Others are more inclined to rush in to take advantage of new opportunities. The financial industry leans toward rushing right in. After all, brokers can add to their product line at little extra cost. They just add to the workload of their existing employees, who are glad for a chance to get ahead in this high-paid field. When new products or services fail to sell, the industry quits offering them....
AGT Food and Ingredients Inc., $27.31, symbol AGT on Toronto (Shares outstanding: 23.1 million; Market cap: $633.5 million; www.alliancegrain.com), sources and processes a range of pulses and specialty crops. Pulse crops—including peas, beans, lentils and chickpeas—produce edible seeds called pulses. AGT’s Turkish subsidiary also makes pasta and rice products, plus foods made from bulgur wheat (whole wheat that has been cleaned, parboiled, dried and sifted). Saskatchewan-based AGT owns 12 processing plants in Canada, as well as a canning and packaging facility. It also has two plants in the U.S., four in Australia and nine in Turkey, as well as a bean-processing and food-distribution facility in China and a processing and packaging plant in South Africa....