Chartwell Retirement Residences (CSH.UN.TO)

Management has done a bunch of good things for this company. Paying down debt, increasing value add on properties through value add services. Should continue for couple of years yet.

Interest rate concern will be trumped by the demographics. Excellent quality and they take Really good care of Moms and Dads. A solid company long term.

Doing a good job in repositioning their portfolio. Have been trying to sell some of their US assets. Have also re-jigged management contracts to get better profitability out of some of their US assets. Made a fairly large acquisition in Canada to increase their size and scale. In the last couple of years they have focused on operations and getting their operating costs and operating strategies in line and have done a very good job. Could be an acquisition target for some of the large US Seniors Housing REITs. Trajectory for earnings is quite good.

Continues to like this and it’s one of his largest REIT holdings. Fair value is $11.50-$12 but could be significantly higher if they eventually get acquired. Senior housing REITs Portfolios tend to be operating businesses so you have to watch as to how they manage their expenses. This sector and this one particularly are supported by longer-term solid demographics and, potentially, a lot of pent-up demand for seniors housing.

Very well run REIT that focuses on the Canadian seniors housing market. Also, have US assets. In his view, this is the operator to own in the long-term care space. Dividend is safe and the balance sheet is good quality.

Leisure World (LW-T) or Chartwell (CSH.UN-T)? Likes both of these. This one has a very good growth rate of 8% versus the REITs of about 5.5%. Slightly less risk. Has a bigger geographical imprint and less regulatory risks.

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.