Opinions
Andy Nasr
NorthWest Health Prop Real Est Inv Trust
NWH.UN-T
COMMENT
Feb 09, 2016
Stock price when the opinion was issued
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Strategic review. Management changes. Multiple jurisdictions globally, not very efficient for a Canadian REIT especially with the state of its balance sheet. Lots of headwinds on balance sheet and distribution coverage. High leverage, tight coverage. Good assets, but not lots of options.
It has a 6.2% yield and he doesn't usually put higher yielding stocks into the equity platforms. This one came from the income platform. It fell so fast because it was over-leveraged but has now sold some of its assets. It is building a base and appears to be breaking out so he has bought two of the three legs. Buy 0 Hold 5 Sell 0
(Analysts’ price target is $5.85)One of the most attractive REITs on the TSX right now. Coming out of poor fundamental operations where capital allocation was mismanaged. New CEO cut dividend, sold properties. Prepared either way if interest rates fall or rise. Payout ratio will fall closer to 80%. Stock may have fallen recently because that new CEO is retiring next year. Yield is 7.3%, one of the highest out there.
Yes, in much better position today than previously. Management transition. Hard to see it going back to $10 levels anytime soon. Decent job allocating capital (ie. selling assets) to pay down debt. Enough to pay March debentures. Risk/reward not that compelling.
Not very focused geographically, so all those moving parts are hard to maintain. Likes some changes they've made with management and the balance sheet, so he's watching it now. One of largest tenants in Australia has gone bankrupt, which could affect 5-10% of earnings. It's a wait and see.
The largest owner of medical office buildings in Canada with some exposure in Brazil, New Zealand and Germany. Because it is so diverse it is tough for investors to get a handle on what is happening in each of those different markets, especially if you consider what is going on in Brazil. He has some underlying concerns about the health in some of those markets. Has a relatively high payout ratio that is going to have to rely on acquisitions to facilitate growth. In this market, where most REITs are trading at a substantial discount to NAV, it is going to be much harder to realize non-organic growth. Prefers others.