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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Element Financial Group, $14.05, symbol EFN on Toronto (Shares outstanding: 264.1 million; Market cap: $3.7 billion; www.elementfinancial.ca), is a leading independent North American equipment-finance company. Element operates across the continent through four segments: Commercial and Vendor Finance, Aviation Finance, Fleet Management and Rail Finance. Commercial and Vendor Finance focuses on equipment for a range of markets, from transportation and construction to industrial, health care, golf and office products....
We haven’t found any infrastructure stocks we want to recommend as buys, but here’s a look at one hold recommendation of Stock Pickers Digest, as well as two prominent U.S. companies in the industry: Stantec, $29.79, symbol STN on Toronto (Shares outstanding: 93.8 million; Market cap: $2.9 billion; www.stantec.com), a recommendation of Stock Pickers Digest, benefits from infrastructure investments all over North America. The company offers consulting and project management services for infrastructure and various facilities. Stantec continues to grow by acquisition. At the same time, it cuts its costs by sharing administrative expenses, financing and employee benefits among its divisions and new acquisitions. But continually buying firms adds risk, including the risk of writedowns....
FLYHT Aerospace Solutions, $0.35, symbol FLY on Toronto (Shares outstanding: 170.4 million; Market cap: $60.2 million; www.flyht.com), supplies a number of products and services to the aviation industry. The company changed its name from AeroMechanical Services in 2012. The company’s products include the AFIRS UpTime data-collection device, which records flight information as it happens and relays it to the aircraft operator’s facilities by satellite. FLYHT also sells an emergency device called FLYHTStream that sends real-time data to the ground for immediate analysis. As well, it recently introduced the Dragon, a lightweight, portable satellite communication device that lets users access FLYHT’s technology with an iPad. In the three months ended September 30, 2014, the company’s revenue fell 17.1%, to $1.8 million from $2.2 million a year earlier. FLYHT lost $174 million, or $0.01 a share, compared to a loss of $615,950, or nil per share....
Uranium Energy Corp., $1.49, symbol UEC on New York (Shares outstanding: 91.7 million; Market cap: $136.7 million; www.uraniumenergy.com), is a U.S.-based uranium mining and exploration company. UEC owns the Palangana mine, the Goliad project (for which it holds the necessary permits to build a mine) and the development-stage Burke Hollow project, all in Texas. It also owns the Hobson processing facility—also in Texas—and exploration projects in Arizona, Colorado and Paraguay. Over the longer term, uranium companies like UEC will benefit from rising demand in China and India, where about 650 million people live without electricity. There are now 72 nuclear reactors under construction globally, mostly in those two countries....
FMC Technologies, $40.91, symbol FTI on New York (Shares outstanding: 233.8 million; Market cap: $9.6 billion; www.fmctechnologies.com), is an oil-field services company that makes high-pressure fluid-control and measurement systems and equipment for undersea and surface production and processing. The company’s Subsea Technologies division accounts for about 66% of its revenue. Surface Technologies provides 25%, and Energy Infrastructure contributes 9%. FMC’s systems are used in offshore oil and natural gas production. Subsea systems are placed on the seafloor and control the flow from the reservoir to a processing facility, which may be onshore or aboard a ship or fixed platform....
iRobot, $32.36, symbol IRBT on Nasdaq (Shares outstanding: 29.6 million; Market cap: $956.5 million; www.irobot.com, makes and sells robots, such as the Roomba floor-vacuuming machine and the Scooba floor-washing robot, for consumers. It also makes the PackBot military robot. The company gets about 88% of its revenue from home robots and 12% from defence and security. iRobot spends a high 13% of its sales on research. That’s letting it come up with new robots, including the recently introduced RP-VITA for use in hospitals. This robot can be remotely controlled with a tablet. It uses sensors to find its way to a given patient and onboard cameras and displays for face-to-face interaction with doctors....
Toronto-Dominion Bank has a strong presence in the U.S., with more branches there than in Canada. It also stands to gain from an improving U.S. economy, while the strong U.S. dollar enhances the rising earnings the bank is seeing from that country. TD BANK $52.89 (Toronto symbol TD; Shares outstanding: 1.8 billion; Market cap: $90.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.6%; www.td.com) is Canada’s largest bank, with $944.7 billion of assets. It also operates 1,318 branches in the U.S.—compared to 1,165 in Canada—and owns 40.72% of TD Ameritrade (New York symbol AMTD), a leading online brokerage. Excluding one-time items, TD’s earnings per share rose 15.1% in the fiscal year ended October 31, 2014, to $4.28 from $3.72. Revenue gained 9.2%, to $30.0 billion from $27.3 billion....
BANK OF NOVA SCOTIA $63.67 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $77.3 billion; TSINetwork Rating: Above Average; Dividend yield: 4.2%, www.scotiabank.com) was our #1 pick for 2014. The stock hit a high of $74.93 in November 2014. It has moved down lately with stock markets, but it’s still up almost 8%, including dividends. Bank of Nova Scotia is the third-largest of Canada’s five big banks, with $805.7 billion of assets....
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 $39.55 (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....
IBM $155.05 (New York symbol IBM; Shares outstanding: 989.7 million; Market cap: $197.9 billion; TSINetwork Rating: Above Average; Dividend yield: 2.8%; www.ibm.com) has signed several new cloud computing contracts. These deals will help boost its cloud computing revenue to $7 billion in 2015, or about 7% of its total projected revenue of $99 billion. Among them is a 10-year, $2.0-billion deal to build and manage a cloud platform for ABN Amro, one of the Netherlands’ leading banks. The company has also signed a seven-year, $1.25-billion contract to build a cloud-based system for U.K.-based advertising agency WPP plc. Under the deal, IBM will combine WPP’s mainframe computers with new remote servers....