Tricon Capital Group (TCN.TO)

The problem is the valuation. It got ahead of itself. Thinks you will be rewarded for hanging on. Unless you are expecting a downturn in housing, these guys have a good business model. It goes through lengthy consolidations. It’s a good growth story.

(Top Pick Aug 07’13, Up 21.95%) This is a play on US housing recovery. 20-25% discount to NAV. A proxy for the US home recovery, which is now in growth mode. Their lending costs are going to drop.

(A Top Pick Dec 2/13. Up 6.55%.) Had hoped the return would have been better, but there was a temporary setback in the US since late December, which resulted in lower home sales and new home construction. Probably weather related. They continue to do the right thing by building their asset base and buying more homes. Still thinks there is a lot of upside.

(A Top Pick Aug 26/13. Up 35.1%.) Still likes this. Doesn’t know that it is a table pounding buy right now but it is a good solid Hold. Pays a nice dividend. They manage money for other people that they invest in housing as well as for themselves, so this is a play on US housing. Doesn’t expect another 35% growth this year. Would be a Buy at just a hair under $7.

It has been range bound. Met with management team and he likes the story. There are catalysts coming up as they sell an asset. There are better ways to play the housing market.

Owned for some time. Announced they were going into home building. Is an asset management company turning into a play on US housing and recovery. He reduced his position because he feels returns will slow. A solid management team that are well aligned.

(Top Pick July 02/13, Up 21.44%) Leverage to the US housing market recovery. They have an asset management business. They have a development business. They own single family homes and he thinks the stock is cheap. They are growing this to be a multiyear thing. They figured out how to buy single family homes and then run them. They purchased in the hardest hit areas in the US. It trades incredibly cheaply compared to its NAV of $9-$10. They can refinance properties at a lower rate.

Their primary asset is in the US and is real estate based. He likes the US asset over the Canadian one. Feels the US real estate market is in repair and on its way up. This is a good diversification tool versus a lot of the other financials.

Basically a US housing play. The real opportunity in this is the growth opportunity. Have land development and single family home rental. The latter is going to be going through a phase of securitization, where they’ll be able to borrow on the homes. Incredible land holdings and development which will be able to generate incredible amounts of cash flow as they lock up land in California at the bottom of the market. 3% yield.

Has never ranked super well in his process. You can’t argue with what the stock and management team have done. He can’t really see the end game. They went down to the US and bought cheap houses. That is great. Property value has gone up. But now they have to exit those or continue to rent them. It is going to be a lot of work from a management standpoint.

(A Top Pick Jan 16/14. Down 0.76%.) Still likes the growth profile. It is flat because US housing has taken a bit of a breather. This company purchased residential real estate in the US and accumulated about a 3500 home inventory. The goal, over time, is to earn the rents in the near-term and about a 12%-15% return on those rents. He can see this being a $10 stock in 2-3 years.

(A Top Pick March 7/13. Up 20.65%.) Involved in residential real estate in the US as well as getting into development properties and manufacturing housing/leasing trailer parks. When this temporary slowdown in housing prices in the US, there should be a lot more upside here. Saw opportunity in getting into the rental housing business.

Have a lot of single homes in Florida. Have done really well and are probably on the cusp of generating a lot more cash. There are not many ways to play the US housing market in Canada. Likes the story.

Owns residential properties where 95% of their properties are in Florida, Phoenix and San Francisco. Also, entering the manufacturing home market. Likes this because residential is providing the biggest pop. Trading at a significant discount. He can see 10%-20% upside on this.

Has not owned it. Ranks in the middle of the pack. His concern is what are they going to do with all these homes that appreciated in price and what happens when all these hedge funds that acquired them decide to liquidate.