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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Cimatron Ltd., $6.18, symbol CIMT on Nasdaq (Shares outstanding: 10.8 million; Market cap: $66.5 million; www.cimatron.com), designs, develops, makes, markets and supports computer-aided design/computer-aided manufacturing (CAD/CAM) software. Its customers are mainly in the tool and die and mould-making industries. The Israel-based firm has two main product lines: CimatronE and GibbsCAM. These software packages provide tools that can automate certain tooling and manufacturing functions. The software communicates with most other CAD/CAM technology, runs on workstations that use the Windows operating system, and transfers data among various devices and programs....
Theralase Technologies, $0.34, symbol TLT on Toronto (Shares outstanding: 78.9 million; Market cap: $27.2 million; www.theralase.com), designs, makes and markets hand-held “super-pulsed” cold-laser technology devices. These products, which can penetrate up to four inches into tissue, aim to eliminate pain, reduce inflammation and accelerate tissue healing. The company reports that it has sold over 800 systems in Canada and more than 400 in the U.S. and internationally. Buyers include doctors, chiropractors, physical therapists and athletic therapists....
Las Vegas Sands, $72.21, symbol LVS on New York (Shares outstanding: 807.9 million; Market cap: $58.3 billion; www.sands.com), is a leading developer of integrated resorts (or casino-based vacation properties) in Asia and the U.S., with a focus on Macau, China and Singapore. The company owns 70% of Sands China Ltd., which operates the Venetian Macau, Four Seasons Macau, Sands Macau and Sands Cotai Central. The company has decided against building a planned $30-billion mega-resort on the outskirts of Madrid, Spain, after failing to win financial concessions and other favors from the Spanish government. Las Vegas Sands instead will focus on countries rumoured to be on the verge of permitting integrated resorts. The most promising is Japan, where the government has introduced a bill to legalize casinos; Japan could become the second-biggest gaming market after Macau. Las Vegas Sands has a greater number of properties in the key Macau market than most competitors, and the Sands Cotai Central is set to be the only new property in the market in the near term. This adds to the company’s appeal....
Here’s the text of the quarterly letter I recently sent to our Portfolio Management clients: “We’ve been managing investment portfolios for 15 years, and doing a good job of it, judging by our investment performance, the clients we have attracted, and the funds they have entrusted to our care. Many of our clients credit our performance to our stock-picking ability. Stock-picking enters into it, of course. But I’d say our results also owe a great deal to our use of what I call the “Successful Investor method”. I call it that because it’s based on what I’ve learned over the years from people who have actually succeeded as investors. (For the same reason, I chose “Successful Investor” as the name for our organization and our flagship newsletter.)...
Banco Latinoamericano de Comercio Exterior, S.A., $30.43, symbol BLX on New York (Shares outstanding: 29.8 million; Market cap: $1.01 billion; www.blx.com), more commonly known as Bladex, is a “supranational” bank originally established by the central banks of Latin American and Caribbean countries to support trade finance in the region. Panama-based Bladex’s shareholders include central banks and state-owned entities in 23 countries in the region, as well as Latin American and international commercial banks and institutional and individual investors. The bank promotes foreign trade throughout Latin America by issuing short-duration loans to other banks and corporations, with the help of a risk committee that aims to make sure it is allocating an appropriate amount per country. The bank does not provide retail banking services to the general public and does not take retail deposits....
Stornoway Diamond Corp., $0.71, symbol SWY on Toronto (Shares outstanding: 175.0 million; Market cap: $124.3 million; www.stornowaydiamonds.com), remains focused on bringing its Renard diamond project in Quebec into production. Renard has all necessary regulatory approvals, and the company has just arranged $944 million of financing to build the mine. The agreement lays out a series of loans, including $360 million U.S. from the Orion Mine Finance Group, a mining-focused private equity business; $220 million from Ressources Québec, a subsidiary of the province’s investment agency; and $105 million from the Caisse de dépôt et placement du Québec, a large institutional fund manager. The agreement also includes a public share offering and an equipment financing facility with Caterpillar Financial....
BCE operates in a competitive, fast-changing market, but this top telecom continues to adapt and grow. For example, its Fibe Internet TV service is attracting more users, and the company recently expanded its media segment with its purchase of Astral Media. These moves bode well for BCE’s profits, dividends—and share price. BCE INC. $48.28 (Toronto symbol BCE; Shares outstanding: 777.3 million; Market cap: $37.5 billion; TSINetwork Rating: Above Average; Dividend yield: 5.1%; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. It also offers satellite and Internet TV across the country. In the three months ended March 31, 2014, BCE’s earnings per share rose 5.2%, to $0.81 from $0.77 a year earlier. Revenue increased 4.4%, to $4.54 billion from $4.35 billion....
BANK OF NOVA SCOTIA $72.16 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $87.8 billion; TSINetwork Rating: Above Average; Dividend yield: 3.6%, www.scotiabank.com) began expanding in Latin America in the 1990s. It’s now focused on Peru, Mexico, Chile and Colombia, but it has a strong presence across the region. There’s still lots of room to expand banking services throughout Latin America, especially as its growing middle class looks for stable deposit and consumer-lending services. Bank of Nova Scotia now gets 34% of its revenue from its international division, which provides financial services not just in Latin America and the Caribbean, but also in Asia and other emerging markets....
SUN LIFE FINANCIAL $39.88 (Toronto symbol SLF; Shares outstanding: 610.6 million; Market cap: $24.2 billion; TSINetwork Rating: Above Average; Dividend yield: 3.6%; www.sunlife.ca) sells savings, retirement, pension and life insurance products to individuals and corporations. The company mainly operates in Canada, the U.S. and the U.K., but it continues to expand into Asia. It has $671.1 billion of assets under management. In August 2013, Sun Life sold its riskier, money-losing U.S. annuity business, which offers products that guarantee minimum long-term returns, even if markets fall....
GREAT-WEST LIFECO $30.65 (Toronto symbol GWO; Shares outstanding: 999.0 million; Market cap: $30.6 billion; TSINetwork Rating: Above Average; Yield: 4.0%; www.greatwestlifeco.com) is Canada’s largest insurance company. It also offers mutual funds and wealth management. In the quarter ended March 31, 2014, earnings per share rose 9.3%, to $0.59 from $0.54 a year earlier. Great-West has $805.9 billion of assets under administration. Earnings at the Canadian division (50% of the total) rose 10.9%. The European division (44%)—including Irish Life, acquired in July 2013—saw 34.9% higher profits. Losses widened at the U.S. division’s Putnam mutual fund business, cutting overall U.S. earnings by 42.3%, but the U.S. makes up just 6% of total profits....