Cominar Real Estate Inv Tr (CUF.UN.TO)

A weak REIT relative to the REIT sector and REITs in general are weak relative to the market. Cash flow growth has been particularly weak. Holding money in a loser is money that is tied up that could be deployed elsewhere.

Not a bad REIT. Pays a really good dividend. Has growth of about 3%. Priced cheaper than the REIT group. When looking at REITs, you want to be more discerning than this one. Wouldn’t be adding at this point.

(A Top Pick July 31/13. Down 4.7%.) Good diverse company, based in Québec. Stock has been under pressure, which he thinks is partly because of concerns about Québec. Has liked this for a long time, but it has been disappointing. Last earnings were a little bit disappointing on their operation side. About 7% yield but not a lot of growth.

This is in a sector that is seen as very safe but there has been a 20% selloff because of rising interest rates. When interest rates rise, valuations get extremely stretched. If you believe that interest rates are going to go higher, there could be further losses in the REIT space. Nothing wrong with this REIT. They have great properties.

In Québec on industrial, retail and office. Have done a great job of focusing on that region. Trying to diversify in Calgary and are focusing also in Montréal. Trades at 16X AFFO so not incredibly cheap but he feels they are not only going to keep their distribution, but will keep growing. Have a terrific portfolio and good management. He prefers being defensive by going more into apartments and assets that are really lowering their balance sheet and not increasing it.

(A Top Pick August 20/12. Down 13.56%.) Sold off in sympathy with the rest of the REIT universe. Sold his holdings. Doubled the size of the REIT in the last 3 years but cash flow per unit growth has been constrained by their balance sheet. Have now de-levered and secured an investment grade credit rating so they will get rid of the convertibles and add more secured debentures which will improve their cost of capital. Still a good quality name.

This is an opportunity to buy a very good company at a higher than normal yield. Have Québec, Ontario and Alberta assets. Fantastic management. .17% yield. Has underperformed for some time and any further downward movement, won’t affect this company as much.

(Market Call Minute.) Management team has not proven that they are going to be able to integrate $2.6 billion of assets that they bought over the last 2 years.

Likes the REIT. Focuses on Quebec. Have been hit with same brush as rest of REITs. They are not overly aggressive on their payout. Quebec economy is doing quite fine. This type of company will get you a 5-8% rate of return. Are in the 8^th inning of a 9 inning game. Fundamentals are fine here.

Cominar (CUF.UN-T) versus Artis (AX.UN-T)? REITs have come off 6%-7% and you are probably getting a 5%-7% yield. Although there is a lot of talk of interest rates going higher, he doesn’t see them going that high and this pull back in the REIT area gives you a really good buying opportunity.

A great way to play Quebec. One of the most stable REITs in Canada. Have assets in Ontario and Calgary as well. A great entry point if you think things are going to work out in Quebec.

Purchased about $700 million of real estate recently. Have been a couple of transactions the market hasn’t taken a shine to. Happier with the performance in the last couple of years than what they have had recently. Cheap but not overly bullish on this.

His concern is that they abandoned their redevelopment strategy and organic growth, a very good strategy that worked well for them. Changed to pursue growth through acquisitions. Thinks it is time for them to digest those acquisitions. He would be inclined to pick away at it here as he expects occupancy and rents to pick up and they have a lot of room to realize some occupancy gain. Trades at a discount to NAV. Payout ratio is only about 90%.

Good value. Trading at around 14X AFFO versus the group at around 16X. Had some industrial space softness which he expects will improve towards the 2^nd half. 6.5% yield which you don’t have to worry about plus some capital appreciation.

Diversified REIT with most assets in Quebec. Has been in the penalty box because of decisions recently. Arranged a financing transaction for a family that owns a large part of the REIT for a project outside of the REIT. Thinks most of bad news is priced in. 6.5% yield. Can deliver 3-4% cash flow growth. Continues to hold.