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Spinoffs

In November 2016, Yum Brands set up its Chinese operations as Yum China and gifted its investors with shares in the new company. Specifically, investors received one share of the new firm for each YUM share they held.

Both stocks have suffered lately as price-conscious consumers spend less on fast food....

2 min read

Pat McKeough

Spinoffs

GFL prefers a sale over a spinoff

GFL ENVIRONMENTAL INC. $57 is a hold. The company (Toronto symbol GFL; Manufacturing sector; Shares outstanding: 420.1 million; Market cap: $23.9 billion; Dividend yield 0.1%; Takeover Target Rating: Medium; www.gflenv.com) is North America’s fourth-largest waste-management firm.

Activist investor ADW Capital Management and its affiliates, which together control less than 1% of GFL’s shares, wants GFL to sell its Environmental Solutions division....

1 min read

Pat McKeough

Spinoffs

These spinoffs need a growth catalyst

Many spinoffs tend to move sideways immediately after becoming separate companies. Essentially, it takes time for them to overcome investor reticence to buy. That’s why we don’t yet recommend these two for your new buying.

HOWARD HUGHES HOLDINGS INC....

2 min read

Pat McKeough

Spinoffs

Pressure should boost Autodesk

AUTODESK INC. $252 is a buy for aggressive investors. The company (Nasdaq symbol ADSK; Manufacturing sector; Shares outstanding: 215.5 million; Market cap: $54.3 billion; No dividend paid; Takeover Target Rating: Medium; www.autodesk.com) is a leader in 3D design, engineering and entertainment software....

1 min read

Pat McKeough

Spinoffs

Activists will aid in their turnaround

Starbucks and Algonquin Power are working with activist investors as they embark on turnaround strategies. However, Autodesk (see box) is resisting activist pressure. Even so, we like the outlook for all three picks.

STARBUCKS CORP. $93 is a buy for aggressive investors. The company (Nasdaq symbol SBUX; Consumer sector; Shares outstanding: 1.13 billion; Market cap: $105.1 billion; Dividend yield: 2.5%; Takeover Target Rating: Medium; www.starbucks.com) is a leading seller and roaster of specialty coffee....

2 min read

Pat McKeough

Spinoffs

Trisura continues to impress us

Specialized insurer Trisura took its current form on June 22, 2017, when Brookfield Asset Management Inc. (now Brookfield Corp.) spun off its specialty insurance business as Trisura. Investors received one Trisura share for every 170 Brookfield shares they held.

Since then, the stock has soared over 510%, for two main reasons: First, as a spinoff, it will likely outperform other classes of similar stocks....

2 min read

Pat McKeough

Spinoffs

Spinoff Spotlight: Baxter International

BAXTER INTERNATIONAL INC. $36 is a buy. The company (New York symbol BAX; Manufacturing sector; Shares outstanding: 510.2 million; Market cap: $18.4 billion; Dividend yield: 3.2%; Takeover Target Rating: Medium; www.baxter.com) has agreed to sell its Renal Care and Acute Therapies unit to investment firm Carlyle Group Inc....

1 min read

Pat McKeough

Spinoffs

This split delivers you a 59% return

In general, spinoffs are the closest thing you can find to a sure thing. Study after study has shown that following an initial adjustment period of a few months, spinoffs tend to outperform groups of comparable stocks for several years.

In many cases, we advise investors to not only hold onto their new shares but to add to their position....

3 min read

Pat McKeough

How To Invest

Q: Pat, can you give me your recommendation for SoundHound AI? It seems to have a good niche. Thanks.

A: SoundHound AI Inc., $5.02, symbol SOUN on Nasdaq (Shares outstanding: 326.0 million; Market cap: $1.8 billion; www.soundhound.com), makes speech-recognition products that use artificial intelligence, or AI.

SoundHound was founded in 2005....

3 min read

Pat McKeough

How To Invest

What is Pat’s commentary for the week of August 20, 2024

Teck Resources now focuses on copper and zinc following the recent sale of its metallurgical coal mines in Western Canada. Metallurgical coal is a key ingredient for making steel.

We feel the move will benefit investors, as copper and zinc have a much brighter future than coal.

That’s mainly due to the ongoing shift from gasoline-powered vehicles to electric-powered cars, which use large amounts of copper in their batteries and electric motors....

9 min read

Pat McKeough

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Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.