Greg Newman InnVest Reit INN.UN-T BUY Jun 17, 2016

Owns a lot of mid-tier hotels. Back in the days when there was a huge recession, and the Cdn$ was at an all-time high and US travellers were at an all-time low and with hotel properties always having to be refurbished, it was a terrible dynamic. Now we are starting to see US tourists come back. This is probably not a bad time to own. He wouldn’t own it because he still thinks it is too risky.

Thinks they can grow their earnings by almost 25% for the next few years. This comes from a combination of improving revenue per unit growth. Demand growth for rooms is outpacing supply, so he sees higher occupancy. With the Cdn$ where it is, Canadians are more likely to stay in Canada and Americans are more likely to come to Canada. This name benefits from lower oil prices. This trades at 11X, versus the hotel REITs which are closer to 13X. Dividend yield of 6.97%.

It is the only viable way to play the hotel sector in Canada. The lower Canadian dollar should bring more tourists back into the country. He finds it too expensive at this level, however.

He is starting to look at this a lot. If you want to play the hotel cycle, and there are a lot of reasons why you would, then this is the name in Canada to do that. Especially if you believe in tourist hotels with our dollar collapsing. This is the kind of thing that will benefit this REIT. It has pulled back and is providing a very interesting entry point.

Canadian hotels. This is a company that is in transition that he is warming up to and watching to see how it works through the transition. Former management tended to have too much debt and some lower quality hotels. New management has a new focus on treasuring their quality assets, and take them to the point to attract American visitors. Balance sheet is still a little too highly levered, which management recognizes.

The general consensus view is that over time a weak Cdn$ is going to bring Americans back into Canada for tourism. That is going to take a little while to generate. The company has high debt and has a plan to bring this down, but that is going to take some time. Watching this pullback for a possible entry point. Dividend yield of about 8%.

(Market Call Minute) He believes they are overpaying for assets. The yield for the most part is safe.

(Top Pick April 23/15, Up 3.29%) It did what he thought it would do, but then Alberta got hurt. US Hotel REITs fell a lot so this one also fell in sympathy.

(Market Call Minute.) Has recently been taken over, so you are just waiting for your final cheque, so he would Sell it and put your money elsewhere.