Timbercreek Mortgage Investment

$300 million market cap. A very stable mezzanine financed building. They lend money for short-term real estate loans and are tight lending the money. If there is no loan to be done, there is no yield. If they do a loan, they just flow the income back to you. A very consistent business. Putting this into a TFS account is a wonderful vehicle. Yield of about 9%.

(A Top Pick March 31/15. Up 7.66%.) Gives mortgages to developers to create retail space, apartment buildings, condos. They tend to be short term mezzanine loans.

(A Top Pick May 5/14. Down 3.53%.) The trouble was repayment issues last year. They lend short-term to developers. They are underinvested, which hurts their bottom line. They have kind of solved that problem and it is cheap, trading at a 10% discount to its NAV. The mortgage market is still earning a very good rate of return on a risk adjusted basis. He thinks this does recover and does well over the next year.

(A Top Pick Feb 11/14. Down 7.12%.) This is a mortgage investment Corp. Has been hurt because they had prepayment issues last year. Has heard that insiders have been aggressive buyers of the stock. A good asset class to own. Yield of 9.33%.

(A Top Pick Feb11/14. Down 1.52%.) You are just basically getting a 7% rate of return, but he’d like to see the NAV stabilize, which it kind of has. The biggest concern is that rates are so low and there is more competition in the space. It’s like they are on a treadmill. Once the mortgage gets paid down they have to go out and re-distribute the money. It is challenging, because they are always trying to get ahead of themselves. Cheap at these levels.

(Top Pick Feb 11/14, Down 1.17%) It trades cheap now relative to its NAV. They lend out short term loans to builders. They keep getting repayment quicker than they expect and they have to take that money and keep trying to find better mortgages.

A mortgage REIT. They are smart people. The return is safe. You should be income focused. It should react well in a rising rate environment. It is not exciting, however.

A mortgage lender. Restructured because they used to be a mortgage fund and they had to become a Corporation. They lend short-term, which banks don’t want to do. They get about an 8% yield and is trading at a discount to NAV. Even if interest rates rise, this is a perfect entity because it resets itself every year or two to higher funding rates. Lends to hospitals, apartment buildings, more stable entities. Yield of 8.72%.

Has underperformed and got hit by the interest-rate movement. Focuses on mortgage lending to multi-dwelling apartments or hospitals, short-term lending that banks don’t want to get into. Used to be a closed end mutual fund but is now a corporate entity so the trailer they had to pay to advisors has been eliminated. Trades at a big discount to its NAV which probably trails back up in 6-12 months.

Generally does not own funds, but found he is not an expert nor has exposure in mortgage lending space. These guys have that expertise. Traded off because of interest sensitivity. They don’t just keep re-issuing their fund, but are buying it back. Less than 3% MER if not bought retail. They lend to hospitals or for short terms. 7% distribution.

(Top Pick Apr 25/12, Up 1.43% Total Return) It earns a 6% yield so you don’t get much price action out of it. It is secured mortgages that are well diversified. [Mr. Gardner said on the show that he thought distributions were on top of the return listed, but the BNN news letter lists this figure under total return.]

A pure yield vehicle. Throws off about 8.5% on his costs. Very akin to a mortgage REIT where you have to underwrite the portfolio every quarter, so it is a portfolio of loans. They do not own commercial real estate. Unless you got the time and the expertise to underwrite the loans, he would not recommend it.

Owns this in his bond portfolio. Well diversified. Their loan to values are generally 60% leveraged so you need a drop of more than 40% to take a hit. A great investment in your tax-free account.