Tricon Capital Group (TCN.TO)

(Market call minute.) Likes this one. It’s a direct play on US housing and one of the cleanest plays out there.

Although not a REIT, this has done very well and they own single-family homes in the US. If rates go up and the values of single-family homes go up, you should end up with some pretty good capital appreciation in your portfolio. This should help mitigate refinancing or interest-rate risks.

(Market Call Minute.) Linked to the strong US housing industry. Fantastic cash flow. Good company.

If you want a play on US housing, he feels that one of the best plays in Canada right now on US housing is this company which buys US single-family home properties and rents them out.

(A Top Pick Nov 22/12. Up 22.76%.) Great company. It will generate a tremendous amount of cash over the next few years and he can see a lot of that cash coming back to shareholders. 3.5% dividend yield. He could see this getting into the $7-$8 range.

Great company. Were very early in buying single-family homes in the US and renting them out. That is not their core business, so when it is time to sell, they sell. Have also been buying up tracts of land in key spots in the US and doing housing development. Recently hired a well regarded CFO. Have a lot of institutional investors going along with them. 3.4% yield.

A Canadian company that has a play on the US housing market. Changed their business model somewhat. Basically doubled the size of the company in the last few weeks by doing a huge equity issue. Number of shares outstanding are up almost 80%. Used that money to buy in one of the partnerships that they manage so they have 2 streams to their business. They manage funds of residential properties in the US for other clients as well as for their own book.

Focuses on US residential housing, owning single properties in Miami Dade and in Arizona. Trades pretty cheap and they are good at what they do. He believes the US housing is in place and going forward. Yield of 3.82%.

Single-family housing in the US has become a larger portion of their asset base. They are also an asset manager. Have done a great job of acquiring assets with partners in the US. They purchase single-family homes and rent them out to individuals. There are others doing this and this has been a contributor to the increase in home prices in the US over the last 12 months. He is confident that this company has done a good job in purchasing assets.

80% of growth is US at the hardest hit areas for real estate. Buy up properties in auctions. Rental market in those markets is tight, in short supply.

Pays a good dividend. However they moved into a new area (distressed home sales). It is not the risk profile he is looking for.

His problem is that he still doesn’t believe in the US housing recovery because of all the shadow inventory on the banks balance sheets. It has to come out and when that enters the market, what are going to be the consequences?

Is comfortable with strategy of purchasing single family homes in the US. Strong attractive yields and investment appreciation. Management owns a fair bit and it makes him comfortable. Going forward you should expect strong growth. They stick to required returns when they go out to acquire properties.

Acquiring foreclosure type properties in the US and renting them out. They seem to be extremely competent.

Buying residential homes in the US and renting them out while waiting for appreciation. The attraction here is that the US market is rebounding and will do really well for 4-5 years and meanwhile you are getting paid with a dividend of 3.51%. Good model and they are getting in at the right time.