Mainstreet Equity Corp (MEQ.TO)

(A Top Pick June 1/17, Up 12%) A great manager. Out of Alberta with very good western properties. He sold during its recent highs, but still likes it.

Trading at a discount to its NAV. Owns low rise in Alberta, but also a 3^rd of the portfolio is in Surrey BC. They have a huge balance sheet, because they do not distribute any yield. They just retain their earnings and buy properties at cheap valuations. The CEO is a good executor on his properties. They are less cyclical than the high-rises in Calgary. (Analysts’ price target is $41.00.)

It is a real estate company and not a REIT so it does not pay a dividend. They have apartment rentals in Western Canada. It trades lower than its net asset value. He will continue to hold it. They did a buy back of their shares. The float is only 4.4 Million, so it is a thinly traded stock. There is an opportunity for it to go up. Be careful because it is not as liquid as other companies.

(A Top Pick May 28/15. Down 5.07%.) This is a real estate company, not a REIT. They don’t pay a dividend. It is primarily in Alberta and Saskatchewan, so the stock has had a bit of a difficult time over the last year or so.

Apartment building vacancies are terribly tight. A third of their portfolio is in BC, which is doing quite well. They also own apartments that are lower in maintenance costs and that have rents of $800 to $1100 so they are not the higher end that are suffering. It trades at a 35% discount to its NAV and they have about $150 Million in cash.

It is not cheap for a reason. 2-3 story apartment buildings in Calgary and BC. They are seeing weakness out of Saskatoon. They are holding up otherwise. They are great at returning 15% as an internal rate of return. When you get ejected from your house, where do you go? An apartment.

It is a real estate corporation and does not pay a dividend. It is trading at a 25% discount to its NAV. People worry because it is in Alberta. He thinks that business will be fine. They have a great balance sheet and liquidity so they can make acquisitions. It has fallen as people worry about Alberta.

One of the cheaper stocks in the TSX. Trading at about a 20%-25% discount to its NAV. They own the mid-tier apartments (2 or 3 stories) in Edmonton, Calgary and Surrey. They have NOI (net operating income) growth of around 15%. They are refinancing and saving millions of dollars on financing costs. It is too cheap. It should be worth $45-$50. They are doing incredibly well in their numbers last quarter.

(A Top Pick Feb 11/14. Up 2.74%.) This is a “wait and see” kind of story. Have a great balance sheet and are getting funding of about 2% through CMHC. Heating costs have dropped. Great management. Trading at about a 20% discount to its NAV, so it is outright cheap here. This is a buying opportunity.

(Top Pick Jan 20/14, Down 6.84%) It went down with the oil price drop because they are in Alberta. He continues to like it. They made some very good purchases over the last little while in BC. Likes management. They are very cost effective. Perhaps they can make some acquisitions when things are cheaper.

(A Top Pick Feb11/14. Down 8.32%.) He still likes it. Incredibly cheap trading at 20% discount to NAV. They own properties in Edmonton, Calgary and Surrey BC. There is a new LRT going in and they own a lot of the properties nearby. A longer-term play. Doesn’t pay yield.

The majority of their properties are in several Western areas. There is the question of oil prices. Rent growth should have topped out, yet they can still buy broken down apartments, fix them up and release them, so you should be okay for the next 5 years.