Tricon Capital Group (TCN.TO)

(A Top Pick Jan 17/17. Up 12%.) This has pulled back a little. With the hurricanes, people may be wondering what impact it has had on their portfolio. The nice thing is that they invest in residential living, but on an active portfolio basis. Something like a private equity firm, but focused on real estate. Right now, they are focused on single-family homes in the US Sunbelt. Have a number of initiatives they are working through. She is looking forward to this next quarter.

This has amassed a huge amount of single-family homes at fairly attractive prices in a lot of cases. A criticism has always been as to what they going to do with all the homes and where will they eventually sell them. Recently they sold a bunch, but he still questions how do they get rid of all them.

A Canadian company that gives you great exposure to US real estate. They buy up homes, renovate and rent them out. The asset price is at least $12 a share. If we continue to see US real estate price appreciation they will benefit from that. (Analysts’ target: $13.63).

A play on the US single family home market. Made an acquisition earlier this year of the Silver Bay portfolio of about 9000 single-family homes, adding to their portfolio of about 8000 homes. This is a back-door way to get US exposure into a Canadian portfolio. Also, the supply of single-family homes in the US has been light. Dividend yield of 2.5%. (Analysts’ price target is $13.63.)

The concern is the most recent quarter had sales down 41%, but earnings were up 47% so people are scratching their heads. Next year earnings are expected to grow. It looks like reasonable earnings growth, but low free cash flow generation.

He likes the management and what they have done to build the business coming out of the last recession. The balance sheet is good and it pays a dividend: all the right things.

(A Top Pick Aug 10/16. Up 17.97%.) They really simplified their business over the last year or so, going from 5 operating units down to 3, and focusing on places they can get scale advantages. Their single-family homes, where they focus on the US Sunbelt, is really doing well. The stock came off quite a bit going into the quarter, but some of that is currency related. They have a lot of growth opportunity in front of them. A prudent allocator of capital and trading at a reasonable valuation.

(A Top Pick Oct 3/16. Up 13.13%.) This did well up to the last 2 months. He looks at this simply for its ownership of US single-family dwellings. In February, they made a much bigger acquisition of another 7000 homes. The stock has come down, and thinks it is because it is being rated as a Canadian REIT, which it isn’t. A really interesting entry point. Dividend yield of 2.5%.

This is in the single-family rental home business, mostly in the US. It has been a very successful investment for anyone who has been Long. Fairly valued, but not incredibly expensive, but is in an increasingly crowded space. Doesn’t think the gains going forward will be as robust as they have been, particularly if you are looking at rising interest rates. This may not be the best time to be in this.

This is a Canadian company, but owns US real estate, gated communities mostly in the Southeast and Southwest US. Good operators. Stock is done relatively well lately. He owns their convertible debentures. This is now moved up to a point where it is probably a Hold.

Through acquisitions and development of different businesses, it has become a significant play on US residential real estate. They are real estate developers and investors. Recently made a transformational acquisition of Silver Bay Realty, which significantly expands their single-family rental division, a developing area in the US. Dividend yield of 2.3%. (Analysts’ price target is $14.)

(Top Pick Jun 21’16, Up 26.65%) It used to be at a 30% discount to NAV. They captured the US sunbelt rental market.

(A Top Pick Feb 3/16. Up 38%.) They’ve recently done an interesting transaction where they are taking over a US REIT, Silver Bay Realty, which invests in all aspects of the US housing industry. Silver Bay was a single-family rental, and this gives them scale. He really likes that deal.

Tricon Capital Group (TCN-T) or American Hotel Income (HOT.UN-T)? He continues to like this, but it is not really an income play, it is a growth play. Focused on the US housing market and he thinks the US economy is in a good place and housing will continue to recover. Thinks this company is just getting started.

A Canadian company with a lot of exposure to the US. They have rental, development and individual homes. She had avoided this space, but there are a lot of avenues across they space for them to grow. It is a great price compared to their net asset value. She has owned it for a while and is flat on the position. They bring in a lot of experts to work with and she thinks that is key. (Analysts Target: $12.56).