RioCan Real Estate Investment (REI.UN.TO)

He is constructive on the REITs. They got beat up. This one got pretty cheaply. If you can get it under $25 this is a good one.

Canada does not look to be increasing interest rates in the very near term, but he thinks the REIT market and other bond proxy type of sectors are anticipating that at some point interest rates will start moving upwards and follow the US. As a result, a lot of the REITs have come off a bit, especially given the fact that oil prices have fallen. He would be cautious about owning REITs.

This is the largest Canadian REIT, and he likes it. It is not going to grow very quickly because of its size, but extremely well-managed. Doesn’t think it should have dipped as much is it did. It should be over $25. Anything under $24, for safety and dividend, would be a good entry point.

He is very encouraged by the story he is hearing. There are 2 factors you have to be aware of. This is 25% of the REIT benchmark, and is the barometer of the sector. Also, there has been a bit of a fear in the retail market in Canada in general. Retail sales are going down, which will weigh on the stock. However, this is a fantastic management team with amazing properties with extra development opportunities. If you are looking at the long-term, you buy this on these dips.

RioCan (REI.UN-T) or BMO Equal Weight REITs Index (ZRE-T)? They are not too different. The ZRE has relatively large weightings in some of the large REITs, and all the REITs tend to move in the same direction when the sector sells off. While he likes this one, he thinks the ZRE is a little bit better because it is a diversified basket.

It is trading at its book value and has a 50% upside. This one has never gone to a discount outside of a recession.

He thinks that RioCan is a pretty good company, not a high grower as Reits are not high growers, but for income seekers they are pretty good. He believes they will be able to recover the money lost from Target. He thinks the leases are guaranteed from Target US. He is surprised that it has come down in price, but feels it is a buy at this price.

The operator Ed Sonshine is just brilliant, and right now is talking about selling their US operations. They bought the US operations on the cheap during and after the recession, and now is talking about selling it. Also, had the US$ appreciation at the same time. This is a company that he likes, but this sector is dangerous to some degree, because a lot of retailers are having problems. More and more people are buying on the Internet, and that will continue to a certain degree. To him it is too expensive, but for other people he could see why they might choose this.

Will be a beneficiary of momentum. You are making a REIT call. This down turn is a buying opportunity. They have the ability to continue to grow cash flow.

A high quality REIT. It is exposed to retail which has been pulling back a little in Canada. One of the difficulties here is going to be growth. 5.3% dividend, but the ability to grow that dividend is going to be in question. Very well managed and good assets, but a little bit growth challenged.

Equityclock (www.equityclock.com) chart showed that this, as well as most of the Canadian REITs at this time of year, tends to move higher through until August each year. Right now the sector is tending to bottom and is heading for seasonal trend on the upside. If you own, continue to Hold, and you can even add to your current positions at this time.

A very high quality and solid company. The dividend is high because REITs come under pressure every time interest rates look like they are going to go up. He does like this one and he likes the REIT sector in general. People miss the fact that if interest rates come down, so does their financing costs. In Canada, if retail sales come off, it costs them on their percentage rents.

Has moved out of the sector. A well-managed company. They are diversified being in the US and Canada with many different properties. If you want to be in a REIT, this is one of the top quality ones. Reasonable yield with some growth potential.

He doesn’t own any REITs, but this is one of the higher-quality names. Great assets and a beautiful portfolio. If you are buying this, you have to ask yourself if you are there for the share price appreciation or for the yield. If for the share price appreciation, he doesn’t see much upside for any of the REITs at this point. Dividend of about 5.1%, but feels you could get a similar yield in a name or sector that doesn’t have as much downside risk.

One of the largest REITs in Canada. The big news was that Target declared bankruptcy. The master leases were with Target’s parent in the US. There is also concern about interest rates. With the weak Q1 in Canada, he does not think rates will rise here.