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Opinions Charles Dillingham
Whiterock REITWRK.UN.TODON'T BUYApr 15, 2010
Core of their business is government offices in Regina and Quebec city. Many questions about how good their finances are and if there is another shoe to drop. Very high payout ratio so there is a real risk they may have to cut distributions.
$15.01
Stock price when the opinion was issued
property mngmntinvestment
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COMMENT
High yield of around 9%. Had been doing a lot of growth. Not much institutional support. Has been significant concern that the CEO has been taking very good care of himself on the financing. They claim they're going to be improving that. Looks safe right now but the market will be watching very carefully.
Charles DillinghamOwned
property mngmntinvestment
COMMENT
CEO’s contract is like no other. He takes fees both coming in and going out. Has pushed some good product and has done a lot of stuff well. Hasn't looked at this one closely although he has a little bit.
Charles DillinghamOwned
property mngmntinvestment
COMMENT
Recently sold a large part of his holdings. Bothers him that CEO’s compensation is based on growth rather than profitability. Also making more acquisitions outside of Canada and hopes they can transition these into accretive acquisitions. Doesn't expect much growth.
Paul Gardner, CFAOwned
property mngmntinvestment
WEAK BUY
Have done a significant job of diversifying. Brought their payout ratio down from about 130% to 117%. A definite Caveat Emptor so don't invest too much.
Charles DillinghamOwned
property mngmntinvestment
COMMENT
Over distribute over their AFFO (Adjusted Funds from Operations). Leverage is higher than industry standard. Good properties. Management is on target and appropriately aggressive. Will have to issue more equity or buy more properties to get the 12% distribution on side.
Paul Gardner, CFAOwned
property mngmntinvestment
DON'T BUY
Just acquired a number of properties on the Hwy 427 corridor in the Toronto area. Don't own the entire asset, which enables them to boost returns by charging asset/management property fees. He would like to see a couple of quarters of them operating. Too much over distributing and over leveraging for him.
property mngmntinvestment
