Opinions Derek Warren
Cominar Real Estate Inv TrCUF.UN.TOCOMMENTNov 13, 2014
Derek WarrenUnknown
$18.75
Stock price when the opinion was issued
$11.74
As of Mar 02, 2022. Market Open.
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HOLD
Competing bid from BAM? Opportunistic bid. Will someone else come in? Nice discount to book value. Wait until the second last day before the bid expires. BAM or Canada Pension Plan might come in, but it's a wing and a prayer right now.
Ross HealyOwned
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DON'T BUY
A play on Quebec. Announced a strategic review, so potential for some sort of activity. She prefers to own a pure industrial. Summit, for example, has Montreal exposure. Retail is going to face significant challenges to creating a path to growth. Third distribution cut since 2017. Better opportunities elsewhere.
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BUY
Quebec's biggest REIT and once a darling REIT. But they had a lot of dilutive raises which increased leverage and bloated their portfolio. Also, the dividend is too high and will likely get cut. Last year, activists forced the company to change at the board level and cut the dividend (and needs yet another cut). The payout ratio is now much better and they've hired a new CFO who should do a fine job. Now, they are considering what to do with Gare Central in Quebec City, and this may benefit shareholders. A good time to buy.
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HOLD
Warming up to it. Concentrated heavily in Quebec. Mostly industrial, retail, office. Was overexposed to fashion in the malls. Can't change this quickly. New management team is good. Building condos on top of assets, to some success. Reframe how you look at it, from will it get back to a certain level, to will it go higher from here. Payout ratio not too onerous. Dividend is safe. Can hold it comfortably.
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PAST TOP PICK
(A Top Pick Aug 09/19, Up 6%) There have been some management changes and the stock is slowly reacting positively. He still sees upside from here. Yield 5.5%
John KimOwned
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DON'T BUY
A diversified REIT holding assets in Quebec and Ottawa. They're done a big restructuring, cut the dividend,changed managers and sold properties outside those two areas. The industrial and office sides are doing very well, but retail is slow which worries her. Leverage is high at 54% with a lot of debt due. They aim to reduce debt to 50% by 2021. The worst is over, but doesn't see much of a stock improvement.
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TOP PICK
The valuation is low, and it's a turnaround play. It was a sleep company that needed a management shake-up. The new managers are pruning their real estate portfolio, discarding the underperformers. Their same-property growth is the highest in a decade. These initiatives are now bearing fruit. For a long time, their property growth was flat or negative. (Analysts’ price target is $13.19)
John KimOwned
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Doesn't think there is much of a chance of the 7.7% yield shrinking, i.e., the price going up. The Québec focus has put a bit of an economic damper on it, so they are trying to expand out of that. However, he is not crazy about some of the deals they are doing, especially in Ontario. Just did a very large, smart transaction with Ivanhoe, when they took down a large group of malls. However, they raised their leverage and have stated that over time they want to reduce that leverage. That implies that whenever the stock price goes up, they're going to have to do an equity raise to bring the price back down. Doesn't see a lot of stock price increase in the future, but it is a safe yield.