Tricon Capital Group

TCN-T

The Starlight buy allowed TCN-T to expand apartment rentals in the US to be added to their single-family for rental portfolio of holdings. They were able to issue stock to the Starlight holders at very high values to bring them in -- a very smart strategy. This created a large overhang of shares that could hurt share prices. Recently TCN-T removed the overhang to allow them now to sell those shares unrestricted. Investors on the sidelines appear to have sopped up the surplus. The only reason it was not a Top Pick, is that he was blind sided by the share announcement. His discussions with the management team about the US acquisition is solid, he thinks. He likes the valuation of the company, he thinks it could be worth $13 per share.

They've done an excellent job getting into the single-family rental business in the U.S. with a lot of demand and rental rates moving up. TCN has done some fine acquisitions and it still trading at a reasonable multiple. US and global investors are down on Canada, given the poor oil situation, so investment hurts mid-cap companies like TCN, even though TCN's business is in America. Be patient with this.

Outstanding management team. They did a couple of large transactions that the market is still working through. They got into rental of homes in the US and bought high quality apartments in the US sunbelt. There is some short term pain as some believe the debt has gotten a little too high. In the real estate space the leverage is not out of normal ranges.

(A Top Pick Apr 01/19, Down 12%) Two days after making the pick, the company announced an acquisition that the market did not like. They are the premiere owner of single family rental properties in the US. They are investing a lot of money into technology for the sector. They are looking to expand their platform of properties -- great in the long term. The market didn't like the departure from the existing business model. It is trading at a massive discount to NAV, so he still likes the value.

A very solid company. The announced a major acquisition and since then the stock is down about 10%. They bought 23 multi-family buildings. He thinks they are trying to expand their model from single-family to multi-family units. At this level, it is less than 10 times earnings and the yield is 2%. He would be a buyer here.

(A Top Pick Apr 26/18, Up 8%) They have exposure to the US residential market and pay a good dividend. They have an asset management group that generates good cash flow. He thinks the market is undervaluing this.

Well-run with many assets in America, making single-family rentals (they're a leader in this). They just acquired into multi-family units to diversify. The stock has gone sideways in recent years, but trading at a reasonable discount to NAV and pays a 2.5% dividend. A good idea to own a stable real estate stock during volatility.

It dropped back recently but we got down to $9.33 and are almost at $11, a pretty good move off the bottom. The 200 day moving average is coming through here and the market likes that. His concern is that interest rates may rise again and this is the first place it would impact. If it breaks $10.52 then he knows there is something more happening in real estate and it is not just this one.

(A Top Pick Dec 05/18, Up 14%) They institutionalized single family homes in Canada. They seem to beat their peers every single quarter. They are poised to continue this kind of growth from here. It is a buy.

He still likes it. The valuation last time was ridiculous and now it is just cheap. Its peers on the US side are trading at NAV and TCN-T is at a 12% discount to NAV and he sees 12-15% growth in NAV this year. (Analysts’ price target is $13.80)

He tried trading this, but missed it. This is rangebound between $9.75-11.70. Right now it's at the top. Doesn't know if it will break higher. It will break on really exciting news, and volume will give you a clue.

He follows it closely. They made a lot of money from distress housing in the States after 2008. They pay a reasonable dividend. But TCN has gone nowhere, because US housing hasn't gone anywhere either. People are still burnt from the Recession.

This is single family home rentals in the US. They have 17,000 of these. This is a well oiled machine delivering asset value. Their earnings are messy partly due to appreciation of properties in the US. A great way to participate in real estate. Yield = 2.51% (Analysts’ price target is $13.69)

A US real estate management company. They have concentrated on residential US assets. It is not very well known. He likes the potential and thinks it is quite viable.

His analyst met with them yesterday and it made him feel very bullish. Operationally they have been very strong. They added to their holding a few weeks ago. He thinks it could get back to $12 soon. The multiples are improving the value in his eyes and thinks the market will reward them. Rental rates have been increasing in the US -- especially in the sunbelt.