InnVest Reit (INN.UN-T)

(Market Call Minute.) Has recently been taken over, so you are just waiting for your final cheque, so he would Sell it and put your money elsewhere.

This didn’t do much for a couple of years, you just got paid your 8% dividend. Now the value has been recognized and being taken over at $7.25 a share. You take a risk if the deal doesn’t close. Dividend yield of 5.8%.

(Top Pick April 23/15, Up 3.29%) It did what he thought it would do, but then Alberta got hurt. US Hotel REITs fell a lot so this one also fell in sympathy.

(Market Call Minute) He believes they are overpaying for assets. The yield for the most part is safe.

The general consensus view is that over time a weak Cdn$ is going to bring Americans back into Canada for tourism. That is going to take a little while to generate. The company has high debt and has a plan to bring this down, but that is going to take some time. Watching this pullback for a possible entry point. Dividend yield of about 8%.

Canadian hotels. This is a company that is in transition that he is warming up to and watching to see how it works through the transition. Former management tended to have too much debt and some lower quality hotels. New management has a new focus on treasuring their quality assets, and take them to the point to attract American visitors. Balance sheet is still a little too highly levered, which management recognizes.

He is starting to look at this a lot. If you want to play the hotel cycle, and there are a lot of reasons why you would, then this is the name in Canada to do that. Especially if you believe in tourist hotels with our dollar collapsing. This is the kind of thing that will benefit this REIT. It has pulled back and is providing a very interesting entry point.

It is the only viable way to play the hotel sector in Canada. The lower Canadian dollar should bring more tourists back into the country. He finds it too expensive at this level, however.

Thinks they can grow their earnings by almost 25% for the next few years. This comes from a combination of improving revenue per unit growth. Demand growth for rooms is outpacing supply, so he sees higher occupancy. With the Cdn$ where it is, Canadians are more likely to stay in Canada and Americans are more likely to come to Canada. This name benefits from lower oil prices. This trades at 11X, versus the hotel REITs which are closer to 13X. Dividend yield of 6.97%.

Owns a lot of mid-tier hotels. Back in the days when there was a huge recession, and the Cdn$ was at an all-time high and US travellers were at an all-time low and with hotel properties always having to be refurbished, it was a terrible dynamic. Now we are starting to see US tourists come back. This is probably not a bad time to own. He wouldn’t own it because he still thinks it is too risky.

This has been a turnaround story. They got rid of some underperforming properties and then were to use the funds to get better quality properties. The selloff is primarily people getting concerned about the Canadian economy. Lease terms on a hotel are literally one day. There will be growth because we have a lower loonie. He would take a hard look if it was $5.

Expensive at the current price. You are seeing more insider buying in that there is a bit of feeling that with the weak Cdn$ there will start to be a large flow of US tourists coming back into Canada to spend their big dollars. It may be a little bit early for that call. Also, the leverage is a bit too high.

Recently bought a 20% interest in the Fairmont Royal York, which was interesting. This company is good at managing hotels. In transition. They had way too much debt and are trying to bring that down by selling a lot of assets. They are still in the midst of that transition. He has tended to stay on the sidelines.

Hotels. Thinks it is too high right now. If you want to play the hotel space, thinking weakening dollar will bring Americans back to Canada, it is okay. He would be on the sidelines otherwise.

The only name you can invest in to get exposure to Canadian hotels. Doesn’t like it at these levels as it is overpriced. Some hedge fund involvement and selling off of properties. It is safe and he is waiting for the price to back off or for hotel fundamentals to improve a lot.