First Capital Realty (FCR.UN.TO)

A fantastic company. Specializing in urban development. They are able to go into areas, take a broken piece of real estate and maximize its true potential and develop the neighbourhood as they do it. Great balance sheet and redevelopment potential in its core urban portfolio. This has pulled back 7% so you are getting it at a discount to NAV of about 5%. Dividend yield of 4.91%.

5% sustainable dividend. Shopping centers, drug stores, banks. Discount to NAV. Hard to sell now because they are all down. Could be a little more downside. Ride it out. REITs outperform in the US 2/3rds of the time. Interest rates were previously at a depressed cost of capital and now they have normalized.

In the short term, you are in for volatility but over the medium term he expects it will get to $20-$21 based on the value creation they have in the portfolio. Have an active disposal program where they raise hundreds of millions of dollars. Have an active redevelopment program where they are going to add tremendous value. Relentlessly improved the quality of their balance sheet through terming out their debt, injecting more unsecured debentures to the point where 43% of their assets are unencumbered.

Just reported and he was really pleased with their earnings. An example of what a good core management team should do. During the good times, you prepare for the bad times. They have the best real estate corners and locations. Have a lot of portfolios that have no leverage on them at all. Have a large credit line that is completely untouched. This is a company that is built to weather storms.

(Market Call Minute.) World-class management team. A capital structure that has been improving over the last 2 years in addition to an asset base that has been improving as they have been recycling from suburban assets more into urban assets.

This is like every other interest-rate sensitive stock in that it did break the upward trend line. There is some support coming in at current levels for a lot of these interest-rate sensitive stocks. This one is showing signs of possibly bouncing off of that. As a long-term buyer, you will probably be okay. Pays a really good dividend of about 4.5%. Probably a little oversold.

Thinks it is a great company to be defensive. Done a great job of taking assets and adding accretive value. They are shrinking their balance sheet. Doesn’t trade too expensively. He just increased his exposure. It is best in class.

Great company with a great management team. One of the best out there. The problem is the valuation risk with the recent rise in interest rates. Wait for a pull back that allows you to get in when they are undervalued.

(Market Call Minute) He would pick away around $18.

Is one of the safest. 4.5% yield. Very low beta. Great uptrend. Likes the stock for this environment.

(Top Pick Feb 15/13, Down 1.29%) Bought last Oct and is up on his position. Low beta stock and pays a reasonable dividend but he thinks this won’t correct much during this correction.

Great real estate investment company. Have one of the best balance sheets. A lot of good development potential on some of their older properties. Very good management team. Very difficult share structure to figure out. (Doesn’t own, but does own their bonds.)

Tremendous portfolio. Grocery and drugstore anchored strip retail in the big 6 retail markets in Canada. Strong management. However, they have struggled to generate sustainable cash flow per unit growth, so the NAV is strong, assets are irreplaceable but what you want to see are these acquisition, developments and redevelopments translate into cash flow per unit growth. Have the best investment grade rating in Canada in the real estate space.

(Top Pick Oct 5/12, Up 5.66%) About a 4.5% dividend. Lower volatility and higher yielding stock. Still a decent stock. This is not a REIT. This has a low beta and a long up trend.

(A Top Pick Dec 7/12. Down 1.49%.) Owns a number of small high-end shopping malls. Very stable tenants. Stable cash flow. A classic example of a low beta, high dividend and long-term uptrend stock. 4.5% dividend. It will go up very slowly but doesn’t really have much downside to it. Pretty safe bet.