Stockchase Insights Alaris Royalty Corp AD-T BUY Jan 13, 2021

He does not own this one, but holds their debenture. There was an issue with one of the subsidiaries and the holdings are doing better now. It is not approaching full valuation -- near $22-$24. He would buy on weakness -- somewhere around $19.

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.

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)

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.

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)

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.

(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%.

(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.

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)