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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Altus Group, $20.20, symbol AIF on Toronto (Shares outstanding: 29.1 million; Market cap: $587.8 million; www.altusgroup.com), provides consulting services and software for the commercial real estate industry. The company has five divisions: ARGUS Software; Research, Valuation and Advisory; Property Tax Consulting; Cost Consulting and Project Management; and Geomatics. ARGUS, a leading provider of real estate valuation software, is a recent acquisition. Altus has about 2,200 employees around the world, including in Canada, the U.S., the U.K., Australia and the Asia-Pacific region. Clients include financial institutions, private and public investment funds, insurance companies, accounting firms, real estate investment trusts, health care organizations, private investors, oil and gas companies and real estate developers....
Tableau Software Inc., $70.50, symbol DATA on New York (Shares outstanding: 68.7 million; Market cap: $4.8 billion; www.tableausoftware.com), makes software that analyzes data from a variety of sources and translates it into what the company believes are easy-to-understand graphs and charts. That helps its clients make better decisions. The company has four main software products: Tableau Desktop (for individuals); Tableau Server (for large organizations); Tableau Online (a cloud-based version); and Tableau Public (a free version that analyzes public data, such as employment statistics). Tableau first sold shares to the public on May 22, 2013, at $31.00 each....
A: Premium Brands Holdings Corp., $24.28, symbol PBH on Toronto (Shares outstanding: 22.2 million; Market cap: $538.0 million; www.premiumbrandsholdings.com), took its current form on July 22, 2009, when it converted to a corporation from an income trust. Before the changeover, it was called Premium Brands Income Fund. The company operates through two divisions:
- Retail supplies 63% of Premium Brands’ revenue and mainly serves food sellers, such as delicatessens, specialty grocery chains, convenience stores, national and regional grocery chains and warehouse clubs. It also sells to cafés that offer premade foods, like sandwiches, wraps and pastries.
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BMG Gold BullionFund is an open-ended mutual fund that holds at least 95% of its assets in gold bullion. In general, we recommend staying away from buying gold bullion, coins (unless you collect them as a hobby) or certificates representing an interest in bullion. Unlike stocks, commodity investments like gold bullion do not generate income. Instead, they come with a continuing cash drain for management, insurance and so on. In addition, the MER on BMG Gold BullionFund is a very high 3.07%. For that reason alone, we advise against investing in this fund....
Epsilon Energy, $4.10, symbol EPS on Toronto (Shares outstanding: 49.8 million; Market cap: $203.2 million; www.epsilonenergyltd.com), is a natural gas producer that’s focused on Pennsylvania’s Marcellus shale area. Last year, the company sold off its Canadian assets for $3.5 million to concentrate on this region. The company also owns 35% of a 300-million-cubic-feet-per-day gas system covering 18,000 acres of the Marcellus. Access Midstream Partners and StatOil own the remaining 65%. In the three months ended June 30, 2014, Epsilon’s daily output averaged 4.1 million cubic feet a day, up 64.3% from 2.5 million a year earlier. Cash flow per share jumped to $0.18 from nil, due to the higher production and a big increase in revenue from transporting gas....
Recently a member asked a question that you may also have wondered about over the years. “Why is it that recommendations from the various pundits, CEOs, brokers and money managers so often go down rather than up after they tout their stuff on [a Canadian cable-TV financial channel]? Are these guys above pumping and dumping?” “Pumping and dumping” is far too strong a term. After all, that’s a form of stock fraud....
The growing trend toward marijuana legalization has spurred a great deal of investor interest. (It has inspired a number of legitimate marijuana start-ups, as well as a variety of “pump & dump” operations—see above). We have yet to come across any attractive marijuana investments. Tweed Marijuana Inc., $2.69, symbol TWD on Toronto (Shares outstanding: 27.8 million; Market cap: $80.8 million; www.tweed.com), began trading on Toronto on April 3, 2014. The company is a licensed grower of medical marijuana in Canada. It produces marijuana at a facility in Smiths Falls, Ontario, and through Park Lane Farms in Niagara-on-the-Lake, Ontario....
Market Vectors Africa Index ETF, $32.10, symbol AFK on New York (Units outstanding: 4.0 million; Market cap: $128.4 million; www.vaneck.com), aims to match the performance of the Market Vectors GDP Africa Index. This index tracks the performance of the largest and most liquid companies in Africa. A country’s weighting in the index is determined by the size of its gross domestic product. The ETF’s top holdings are Commercial International Bank Egypt SAE, Guaranty Trust Bank plc (Nigeria: banking), Acergy SA (U.K.: offshore oilfield services), Zenith Bank plc (Nigeria: banking), Orascom Telecom Holding SAE (Egypt: telecom), Nigerian Breweries plc, Naspers Ltd. (South Africa: media and Internet), Talaast Moustafa Group (Egypt: real estate), Attijarwafa Bank (Morocco: banking) and Tullow plc (U.K.: oil and gas)....
Empire Company Ltd., $77.05, symbol EMP.A on Toronto (Shares outstanding: 92.3 million; Market cap: $7.1 billion; www.empireco.ca), is a diversified Canadian firm based in Stellarton, Nova Scotia. Empire sells and distributes food through national grocery retailer Sobeys. It also invests in real estate and various publicly traded companies. In June 2007, Empire paid $58 a share (a total of $1.06 billion) for the 29.9% of Sobeys it didn’t already own. (Sobeys was a recommendation of our Successful Investor newsletter. We first recommended the stock in April 2003 at $36, so the buyout left our subscribers with a 61% gain.)...
Avnet, Inc., $43.95, symbol AVT on New York (Shares outstanding: 138.3 million; Market cap: $6.1 billion; www.avnet.com), is the world’s largest distributor of electronic components, including processor chips, as well as computers and storage products, to resellers and businesses, based on sales. The company links around 800 makers of electronic components, computers and software with over 100,000 customers. IBM is Avnet’s biggest client, supplying 13% of its revenue. In the three months ended June 28, 2014, the company’s revenue rose 6.9%, to $7.0 billion from $6.6 billion a year earlier. Excluding one-time items, earnings per share gained 11.8%, to $1.14 from $1.02....