Dennis Mitchell, CFA
Homburg Invest Inc.
HII.A-T
COMMENT
Aug 16, 2007
This is an interesting animal. They were the winning bidder for Alexis Nihon (AN.UN-T), which is commercial diversified in Quebec. They have since diversified into Europe as well and significant exposure to the Calgary market. For him, he wants to sit back and analyze further.
What they owned in Canada is great but what they own in Europe is another matter. Have some concerns on the central and eastern European exposure. Not willing to take the risk.
Down because it is connected with real estate. Homes extremely high-class properties across Europe. Fabulous yield of 11.3% and can't see it being cut. Extraordinary competent management. Low profile and illiquid.
A commercial diversified name. Gives exposure to Alberta offices, assets in Montreal as well as Germany and some of the Baltic nations. He believes the dividend yield of 11% is fully covered by free cash flow. He has a hard time getting his head around the structure and didn't like some of the exposure they were getting out of the Baltic nations.
An entrepreneur with heavy debt and a heavy payout. Has done some interesting things in the US. Good portfolio in Europe. You'll get a very high yield on it at the moment so if you have some risk money it could be worthwhile.
Owns a lot of really good real estate in Calgary and Atlantic Canada but also a lot of assets in central and eastern Europe. Dividend of 11% should be safe. Payout ratio of 50%-60%.
(A Top Pick Aug 3/07. Down 33% excluding dividend.) The problem is both markets and the real estate. Wonderful yield at 13.5%. Long history of very strong dividend payments. Still a Hold.