Chartwell Retirement Residences (CSH.UN.TO)

You get a little bit of growth plus the yield. A pretty good operator. Owns the convertible debentures on this one. He likes it fine at this price. You won’t get double digits on this.

(A Top Pick Nov 6/12. Up 5.3%.) Trimmed his position in May, not specific to the stock, but specific to the sector because he saw the avalanche that was waiting to happen. Just released their earnings, which looked reasonable but what concerned him a little, was that the organic growth was slowing. A reasonable stock at these levels, but not his favourite at this time.

His preferred seniors REIT. Just reported and the numbers look pretty decent. Longer-term you want to invest in a company like this because of the demographic trends. You are going to see a significant increase in the number of people over 75 in Canada and that is going to create a lot of demand for seniors housing. In the last 3-4 years, some of the demand has been offset by excess supply. Supply growth was double digits a few years ago. It was 7% in 2012 and is now gradually declining to low single digits, which should mean that landlords should get some pricing power back during the next 3-4 years.

Very good company. Has great scale. Since May-June this year, investors have shied away from REITs. There are still great companies that generate a tremendous amount of cash flow. For investors that want good cash and cash returns REITs should continue to be a good part of their portfolio.

With the market that is very skittish right now, you are probably going to be able to buy everything cheaper now. He sees this name as growing at around 10% versus the sector of around 7%. They continue to shed non-core assets and the balance sheet continues to improve. One of the few REITs that he feels comfortable with. Try to Buy under $10.

It is all about where interest rates are going in the short run so he is neutral.

Believes they are the best operators in the seniors housing sector. Have great quality properties. If you feel the housing market in Canada is topping and going to roll over, seniors housing correlates to this. Cheap. 5.3% yield.

Management team is good. Seniors housing in US and Canada. You will get a bounce along with the other REITs from a macro perspective. They are focused more on the private pay side than on the government side. Will be bounced around on rates more than anything else.

(Market Call Minute.) Likes the space. Likes the operating leverage that they have.

Thinks we are 5-10% from a bottom in general in the sector. You are going to see a significant increase in the aged portion of the population. There was excess supply in 2011 but going forward it will be a dividend growth story. Discount relative to its peer growth. If it gets much below a drop of 9% it becomes an acquisition candidate.

Stock has been a little bit weaker the last 3-4 months. It would have come down with the REIT group on the fear that the real estate market was topping out. Feels this is a little different and this could represent a great entry point. Demographics favour the growth of the seniors housing sector. Very, very well managed. High occupancy rates. They are moving a little bit more out of the US and back into Canada, which makes him feel a little more comfortable. 5.65% dividend yield.

Senior housing operator. Likes the industry and the demographics. Penetration in senior housing is very low and hopefully it will increase over time. Have been deleveraging its balance sheet and hasn’t increased the distribution over the last few years. Balance sheet is now strong and the payout ratio is below the target she has. Very good chance they will be increasing distributions over the next 6-12 months. Yield of 5.70%.

Leisure World (LW-T) or Chartwell (CSH.UN-T)? Prefers Chartwell. Has significant turnaround. B leveraging, simplifying the business model, new management. 5.5% dividend yield is safe. Worth $10.50-$11.

A great way to play the seniors trend and they are the most experienced management team in managing these assets. On risks, this is somewhat tied to the housing market as they are going to sell a home to move a senior into their home. If you believe home values are going to go down in Canada, which he doesn’t, this might give you some concern.

Very well-positioned to increase occupancy and rents. Canadians over age 70 is going to increase by more than 50% within the next 10 years, meaning a lot more people are going to be living in retirement residences and senior housing.