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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Amica Mature Lifestyles Inc., $7.87, symbol ACC on Toronto (Shares outstanding: 30.8 million; Market cap: $242.3 million; www.amica.ca), manages, develops and markets luxury housing for seniors. Amica now owns or has interests in 26 residences, including two under development. These properties are in B.C., Alberta and Ontario, with a focus on the Greater Toronto and Greater Vancouver areas. When all of its buildings are complete, the company will have a total of 3,623 suites. Amica caters to an affluent market, with rent starting at more than $3,000 a month for a one-bedroom suite....
Myriad Genetics, $36.06, symbol MYGN on Nasdaq (Shares outstanding: 74.8 million; Market cap: $2.7 billion; www.myriad.com), develops and sells genetic tests that can tell if a person has a higher risk of certain conditions, such as breast, colon or uterine cancers, as well as tendencies toward hypertension. In the three months ended March 31, 2014, Myriad’s sales rose 16.9%, to $182.9 million from $156.5 million a year earlier. Earnings per share, excluding one-time items, rose 30.4%, to $0.60 from $0.46. Myriad sells into a rapidly growing market. It’s also a leader, with products like its BRACAnalysis kits for breast cancer and other tools for detecting prostate cancer and other diseases. In addition, it has a promising pipeline of new tests to bring to market over the next three to five years....
Digital Realty Trust Inc., $58.48, symbol DLR on New York (Units outstanding: 128.6 million; Market cap: $7.9 billion; www.digitalrealty.com), is a real estate investment trust (REIT) that owns, acquires, develops and manages technology-related properties. The trust’s assets include Internet data centres, properties containing servers and other equipment for cloud computing and manufacturing plants for products like computer chips and pharmaceuticals. Its buildings have typically undergone extensive improvements—mostly paid for by tenants—to meet demanding power and cooling requirements. Digital Realty owns 131 properties, of which 92 are located in North America, 21 are in Europe, three are in Australia and one is in Asia. Its occupancy rate is 92.6%....
Williams Cos., $44.04, symbol WMB on New York (Shares outstanding: 685.4 million; Market cap: $30.2 billion; co.williams.com), gathers, processes and transports natural gas throughout the U.S. It also provides gas-marketing services. The long-term outlook for energy transporters like Williams is positive, due to rising demand for infrastructure to transport oil and gas from U.S. shale regions. As well, two activist hedge funds have taken positions in the company. These investors are pressing for seats on the board of directors and other changes, including the possibility of Williams participating in partnerships with other firms and looking for other ways to increase shareholder value....
Our Successful Investor portfolio strategy has three key points:
- Invest mainly in well-established companies;
- Spread your investments out across the five main economic sectors;
- Downplay or avoid stocks in the broker-media limelight.
Valeant Pharmaceuticals, $147.02, symbol VRX on Toronto (Shares outstanding: 333.4 million; Market cap: $49.8 billion; www.valeant.com), is a multinational specialty pharmaceutical company that develops, makes and markets a broad range of products, mainly in the areas of neurology, dermatology and generic drugs. On September 28, 2010, Biovail Corporation purchased Montreal-based Valeant Pharmaceuticals International. The combined company took on the Valeant name. Valeant continues to grow by acquisition: in the past few years, it has spent over $19 billion buying more than 35 companies....
BMO S&P/TSX Laddered Preferred Share Index ETF, $14.48, symbol ZPR on Toronto (Units outstanding: 70.1 million; Market cap: $1.0 billion; www.etfs.bmo.com), holds Canadian floating-rate preferred shares. Issuers include Bank of Montreal, Enbridge, BCE, TransCanada and Canadian Utilities. The ETF’s MER is 0.45%. It currently yields 4.3%. Note that the dividends you receive from this fund do benefit from the Canadian dividend tax credit. Floating-rate preferred shares pay dividends that fluctuate with changes in interest rates. The dividend rate may range from 50% to 100% of (usually) the prime bank rate. As interest rates rise, so do floating-preferred dividend yields....
DIRTT Environmental Solutions Ltd., $3.30, symbol DRT on Toronto (Shares outstanding: 68.9 million; Market cap: $230.2 million; www.dirtt.net), designs and builds customized office interiors. DIRTT stands for “doing it right this time.” The company believes its ICE 3-D software lets it deliver pre-made, customizable interiors faster and more efficiently than traditional construction methods. DIRTT first sold shares to the public at $3 each and began trading on the Toronto exchange in November 2013. In the three months ended December 31, 2013, the company’s revenue fell 1.3%, to $34.2 million from $34.7 million a year earlier. DIRTT lost $10.2 million, or $0.25 a share, compared to a loss of $419,000, or $0.01. The latest results included $836,000 of costs related to its initial public offering, as well as $4.6 million in debt-settlement expenses....
Capstone Infrastructure Corp., $4.03, symbol CSE on Toronto (Shares outstanding: 93.0 million; Market cap: $390.8 million; www.capstoneinfrastructure.com), is an electricity producer with 439 megawatts of capacity. It operates gas, wind, hydro, biomass and solar facilities and is currently developing wind farms with a total of 79 megawatts of capacity. Capstone also invests in utilities, including a 33.3% stake in a municipal-heating business in Sweden and 50% of a regulated water utility in the U.K. The company continues to look for acquisitions. That adds risk, especially since it has previously added a wide range of operations, including solar and biomass, and made acquisitions as far away as Sweden....
CalAmp, $17.31, symbol CAMP on Nasdaq (Shares outstanding: 35.9 million; Market cap: $634.3 million; www.calamp.com), develops and sells wireless communications products and software for various applications worldwide. It operates through two segments: Wireless DataCom and Satellite. Using the Wireless DataCom segment’s products, clients in the energy, government and transportation fields can optimize their operations by collecting, monitoring, and processing data collected from remote assets. Examples include pipelines, power grids, vehicle fleets and railcars. The Satellite segment develops, makes and sells satellite dishes and networking devices for digital and high-definition satellite television services....