Derek WarrenSlate Retail REITSRT.UN.TOHOLDMay 06, 2016

Slate owns all its assets in the US and this is grocery anchored. He doesn't see Amazon making a big impact in this space. This trades at 9% yield and only distributes 88% of cash flow. Leverage is at 55%. It trades at a discount to NAV. Yield 8.76% (Analysts’ price target is $13.08)

REI.UN vs. SRT.UN Never owned REI.UN, not because he dislikes it, but they're so large, it's hard to change what they own. For example, they bought then sold the U.S, and now they're buying Canada. He prefers SRU.U-T in the same space, but Walmart anchors them. In contrast, RioCan had to deal with the Sears and Target closings. SRT has rallied for the past few months, despite the Amazon effect, but still has room to grow. Nothing wrong with REI.UN, but he prefers SRT.UN. Managment are also large shareholders. SRT.UN-T focuses on grocers in mid-market US towns. They have reduced their leverage. He likes SRT's American operations and its defensiveness. The only negative is an external managed contract that seems to be going on forever.

(Past Top Pick Sept. 29, 2017, Up 3%) The operate grocery-centred, easter nU.S. shopping malls. The big fear over Amazon buying Whole Foods is overdone; people will always want to buy groceries in person. For instance, grocery sales at Walmarts are holding their own.

He likes it, but doesn't own it, because it's a small cap which he doesn't buy. It's gotten a little cheaper. They're grocery-anchored in secondary markets in the U.S. midwest. It's stable and operates well. He likes it, but liquidity is an issue for him (being a small-cap). They have a fortress around them (everyone will still walk into a grocery/drug store), so they can stave off the Amazon effect.

With their big property anchored by grocery stores, does Slate stand a chance against rising interest rates and Amazon entering the grocery space? Consolidation (Amazon buying Whole Foods) is occuring which is an inflation play--the big food stores pass on inflation to consumers. (Also, good REITs are going private and leaving the market, which is a concern.) His firm has a buy signal on this.

This is food centred US retail malls. They own $1 billion worth in 23 states. Has a pretty good track record. Dividend yield of 7.6%. (Analysts’ price target is $11.75.)

(A Top Pick Feb 18/16. Up 9.56%.) A name he has really liked, and continues to like. He sold this because the market has moved into a phase where it is rewarding more cyclical names, rather than defensive names. This is primarily focused on grocery anchored US retail properties in secondary cities. Very strong growth.

(A Top Pick Jan 25/16. Up 7.96%.) Had been looking for something defensive, and this has generally been a very good hold with a very high yield. This is a great company. It no longer fit in with his investment thesis, so he no longer holds it.

These are very smart real estate guys. For the average investor, it has quite an attractive yield of 7.86%. You are getting US assets that are not in primary markets, but are in areas that have voted for Mr. Trump that he has promised to give more jobs to. Grocery anchored, with liquor stores, drugstores, good community centres.

He likes this, but a lot of their debt is floating as opposed to fixed. Thinks it is over 70% floating. Sold off fairly hard about 3 weeks ago because LIBOR was starting to back up with concerns over rates eventually increasing. It is going to definitely be affected more than other REITs on any rate increase. He likes the name and their strategy. You have to be cautious in a rising rate environment, and on this you have to be more sensitive than most. He is gradually scaling out of this. A very juicy yield of over 7%.

A grocery anchored retail in secondary markets in the US. They were very effective at getting a currency spread as well as good valuations, and were able to ride that up. Some of the more recent acquisitions are in truly secondary markets, plus they have external management, so he is not in this.