Fabrice Taylor Temple Hotels TPH-T PAST TOP PICK Feb 21, 2013

You have a base in 2010, then a run up and then flat to now. He does not want the recent low to be violated. He would run away.

For a while they had the corner on the hotel space in Fort McMurray and that has been their strength. They are still the dominant provider of accommodation and hotels there. Occupancy rates have been going down a little bit lately. There have been some concerns because some worker camps are starting to be built which is taking away some of their capacity. On the positive side, they just got the approval of owning the hotel next to the airport. Recently bought some hotels in Thunder Bay. There has been a lot of insider buying, so he thinks the dividend is pretty safe.

The stock really got creamed. He is short this one. Once projects start to slow in the oil sands, the need for the accommodations declines.

Has not done very well over the last a while. Have a lot of exposure to the oil patches. It does not trade at a high multiple. Dividend yield of 13.5%, which he does not expect them to cut. The CEO has recently bought back a lot of stock personally. They are trying to buy more hotels outside of the Fort McMurray area, to diversify their overall brand. Story is pretty good; it’s just that they have had a slip up in the last quarter.

This was a bad call on his part. Had been invested in this for a long time, but finally threw up his hands and gave up in December for tax loss selling. Has a lot of exposure to Fort Murray. He probably would have ridden out the storm, but one of the things working against them, even before oil prices started to correct, was that they just kept coming back to the market and tapping capital markets for either convertible debentures or for equity. Sometimes management just gets too capital happy.

Has been a disappointment to investors. It shows what can happen in the hotel industry when you use too much debt. The hotel industry is very cyclical, especially when you start buying hotels up in Canada’s northern region. He feels there is very little equity left in the company, and he is not a fan of it.

The largest publicly traded hotel company in Canada, and operate under names such as Hilton, Marriott, Days Inn, etc. They own over 4000 hotel rooms in Canada. 50% of those are in Alberta, and half of those are in Fort Mac. That has caused the share price to underperform over the last couple of years. Thinks this is a bit of a restructuring turnaround story. Also, Morguard (MRG.UN-T) has taken a very large, over 50% equity stake in it. (Analysts’ price target is $0.90.)

Largely in Western Canada and a lot in Fort McMurray. The fire may create some scarcity and the oil patch is picking up. He would hold on and maybe buy some.

He thinks there is a lot of value there. The issue is the balance sheet, but they did a recent rights issue that helped to shore it up. There will be some volatility, however. It is weak because of their Western Canadian exposure.

(A Top Pick February 15, 2017. Down 49%). This was a bad pick on his part. They own hotels in Alberta and he expected to see the company benefit when Alberta’s economy improved. It didn’t. Also, Morguard owns half the company. He expected that they might take the company private, and still expects this possibility, but it hasn’t happened yet.