Opinions Michael Simpson, CFA
Alaris Royalty CorpAD.TOCOMMENTJan 22, 2016
$23.13
Stock price when the opinion was issued
$12.27
As of Sep 05, 2020. Market Open.
Financial Services
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BUY
It's been a top pick of his over the years. He likes the way they structure their business, investing in diverse, established companies, mostly in the US. They pay a compelling yield, but is a volatile stock, Is less exposed than before to the vagaries of the economy, though the economy will still affect them.
Michael SprungOwned
Financial Services
TOP PICK
They invest in private companies through preferred shares, not commons, though are starting to do the latter now. They invest in good companies with track record across various industries. They increase funds if a company does well, but have a floor if things go awry. They've demonstrated an ability to earn a very good rate of return. They've had issues, but have grown overall. Most investments are American. Extremely well-managed. The yield should increase for years to come. (Analysts’ price target is $22.06)
Michael SprungOwned
Financial Services
PAST TOP PICK
(A Top Pick Jun 29/20, Up 52%) Likes it a lot and it starting to hit its stride as some of their invested companies are coming back, while AD settles with other companies. They're having a record year for capital deployment. More opportunities have opened. He likes their diversity across industry. Most revenues now come from the U.S. He'd certainly buy at these levels.
Michael SprungOwned
Financial Services
PAST TOP PICK
(A Top Pick Jun 29/20, Up 34%) Believes in the model of investing in highly profitable privately owned companies, allowing the founding family to retain control. Stock could be significantly higher in 1-2 years. He'd buy at these levels. Yield is over 8%.
Michael SprungOwned
Financial Services
BUY
Earnings come out at today's close. He'd like to see a dividend increase. It's very well priced. They just did an $85 million issue to fund 3 acquisitions/partners. AD looks very positive going forward in this economic recovery. He expects positive news in this report today. Pays a 7.8% dividend yield. AD converted from an income trust and increased the payout a little, considering taxes. The hope is that their investments will do better in the reopening and the stock will rise, though the yield may not remain this high. Longer term, AD could yield 5-6%, but he also hopes for regular increases in payout.
Michael SprungOwned
Financial Services
BUY
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. It should be considered higher risk income, but it has a long history. Management is decent. It has survived many downturns and has managed to grow. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
Financial Services
TOP PICK
It was hit very hard by COVID-19 in that a lot of partner companies were forced to shut down operations. But just recently they came out with a lot of good news. They have had a pick up in a company that offers plastic surgery in the US. Planet fitness has begun to open up, and a supplier of PPE has done very well through the pandemic. We have also seen management take some positive steps in controlling the balance sheet. They reduced the dividend and announced they will become an income trust, which he feels will be very beneficial to the company. It will give them a much better earnings profile while lowering the payout ratio. (Analysts’ price target is $14.18)
Michael SprungOwned
Financial Services
DON'T BUY
You have to know what you are buying. This is a fantastic management team. They own companies for income. You have to know what is underneath it. There are a couple of holdings that will not open up so fast as you might think, like a public gym. They might cut their dividend at some point.
Financial Services
BUY
He likes this higher yielding royalty trust. They have made new investments that are improving the payout ratio. The valuation is good value. It is like a private equity company that collects royalties. There is some concentration risk, so it is not risk free. Yield 8% (Analysts’ price target is $23.26)
Ryan ModestoUnknown
Financial Services
BUY
3-year outlook A big holding and a great company. Their holdings are in the U.S. based on a preferred equity structure, but risks lie on the companies' revenues shrinking. They had a little bit of a miss in 2017-8, but it's recovered there. Their companies are performing better. The dividend is 7.2% which he thinks is not only safe, but would grow.
Jamie Murray Owned
Financial Services
BUY
He recently added it. This is a pocket where economic strength is starting to recover. It is fairly attractive but what has held it back is that if we are seeing a general slowdown in business, then this could get hurt. He thinks we are seeing the opposite and there is a re-acceleration in economic growth. The dividend is secure. (Analysts’ price target is $23.00)
Bruce Campbell (2)Owned
Financial Services
TOP PICK
He's picked this before. It's had its issues, but now is back on track. They have more safeguards in their investments now, and achieve good returns. Managers have done a superb job of managing problems. (Analysts’ price target is $22.91)
Michael SprungOwned
Financial Services
This has a unique model where they make investments in companies and get a royalty. The royalty can be on sales, gross profit or other things. He always likes to take a deep dive when looking at companies he is investing in, and is wary of companies that buy royalties from other companies. He wants to know what they are buying and you don’t always get that in the financials. Dividend yield of 7%.