Derek Warren Northview Apartment Real Estate NVU.UN-T HOLD Sep 02, 2016

They did an offering this week at about a 3% discount to what the stock was trading at. The apartment sector is a good sector. People have undoubtedly been reading about apartment shortages in major Canadian cities, so if you own a lot of apartment buildings, it is not a bad place to be. This is a pretty good operator and it is a good sector to be in.

He started buying this in the $19 range. Although they had a lot of Fort McMurray and Northern BC exposure, they also have a lot of Ontario assets now. You are now getting Ontario apartments for the price of Alberta apartments, which he likes. 8.6% dividend yield.

A little controversial. The company went through a transaction where they expanded into Ontario. The market didn’t like the deal, so the stock suffered. However, at this point, you are getting about 44% exposure to Ontario and East, and the rest is Alberta and North. He likes having some oil exposure in his portfolios. In effect, this is Ontario apartments at Alberta prices, a significant discount to any other Alberta REIT and a higher yield. He doesn’t expect a lot during 2017, but knows his yield is safe. As they improve efficiencies in Ontario, they’ll start to see gains late in the year and into 2018. Dividend yield of 7.82%. (Analysts’ price target is $20.50.)

The apartment REIT sector is quite attractive. There are immigrants coming into Canada. With the way housing prices are going, people are going to need to rent. This company has a big focus in the North in Alberta. It was under pressure last year because of oil prices and what would happen in Alberta. Trading below its NAV and has a strong yield of about 8%. They are able to get CMHC loans against some of their properties, which makes their financing quite attractive.

A combination of apartments in the GTA as well as more remote communities in Alberta and BC. With rental controls in Ontario, he would be a little concerned.

(A Top Pick June 6/16. Up 8.99%.) This has a beautiful of 7.5% yield, and fully sustainable. A lot of their apartments are out West where things are not as robust. They are working to try to improve their issues. If there are some improvements out West, he can see the stock going to $25, and it could be a takeover candidate.

This sector has done pretty well surprisingly. Feels people are nervous about real estate in Canada, but he doesn’t see it being an issue until 2018. REITs are going to rise moderately, but there will be a cap on them. The chart shows a series of higher lows, and will run into a little resistance at the $22-$26 range. The indicators are all starting to turn up. The downside is relatively limited, and this is a type of holding you should have.

Doesn’t own this, primarily because the balance sheet is a little too highly leveraged for his liking. He worries about the sheer amount of debt they are carrying, which is being coupled with some soft fundamentals in the market they are in. He would prefer others.