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Stock Opinions by Andrew Moffs

COMMENT
REITs are a hedge against inflation. He thinks inflation will persist and this bodes well for real estate. Rents can capture inflation, and so cashflows go higher. Valuations go higher as replacement costs are higher, so inflation is positive. Unique this time is we're going into an environment where inflation rates persist and rise, but we still have lower interest rates. Combination of the two could be a great tailwind for real estate.
Unknown
COMMENT
Trends in rental rates? Differs sector by sector. Office and retail have been difficult, and you see this in the vacancy rates. The antitheses are industrial, single-family rental, and apartments. Inflation is coming through in those sectors where supply and demand justifies it.
Unknown
COMMENT
M&A activity in real estate. Really picked up. For the right real estate, valuations have gone higher since the pandemic. There's a lot of capital trying to chase real estate because of inflation protection and the nice yields that this sector generates.
Unknown
COMMENT
Price of real estate assets. Private market dwarfs the public. His goal is to buy real estate cheaper than the stock market. You look at the valuations in the private market and compare them to the public. He sees a lot of value, especially in industrial, apartments, residential and even on the grocery anchor-shopping centre side. It's the right time to be looking at the sector.
Unknown
DON'T BUY
Small cap, focused exclusively on office buildings in Europe (France, Germany). Listed only on the TSX, so it trades at a discount. Strategic review was disappointing, as they failed to monetize a big part of their portfolio. He's not bullish on the office space, a tougher sector. Volatile. Cost of capital not where it should be.
REAL ESTATE
WAIT
It's recovered. Trades at a premium to NAV, so they can continue to expand globally and issue debt to do so. Most assets outside Canada. Wait for pullback, probably later this year if they raise equity to close current acquisition in Australia.
REAL ESTATE
BUY
Largest operator of self storage globally. Improving operations, pushing rental rates through to customers. Great business. Recession resilient. Likes the space, especially in Canada. Well covered dividend, plus tremendous growth on the FFO line.
Financial Services
COMMENT
Definition of FFO. Metric for earnings for real estate, whereas other publicly traded companies use EPS, earnings per share. The difference between cash coming in and cash going out. In real estate, they add back the depreciation expense to the earnings line to get more of a cashflow metric. It's important, as REITs pay out all their income as distributions, so they need that FFO to support the dividend.
Unknown
BUY
Canada's only publicly traded self-storage operator. Thinks highly of it. Canada is about 10 years behind the US, plus we have less space available per capita. Life events necessitate self storage. Not a REIT, so gives more versatility in that it doesn't have to pay out all its cashflow. This is positive factor growth, as it's on a buying spree. It will provide more of a capital gain, so this will help you decide whether to hold in a taxable account or not.
0
BUY
Owns properties in Canada, US, and Europe. He's bullish. Still upside, based on valuation. Easy to see NAV north of $17, based on cap rates in the private market. Distribution yield is very safe. A number of tailwinds, including e-commerce as #1. Supply chain reorganization will make rents rise dramatically.
REAL ESTATE
BUY
Positive. Single-family rentals in the US. Has done well, and no reason this can't continue predicated on valuation. Implied cap rate is high 4%, whereas peers are between 4-4.5%. Home prices are appreciating.
REAL ESTATE
HOLD

Stable income provider you can add to any portfolio. Likes it. Great real estate nationally. Biggest tenant is Loblaw, so it has a secure cashflow. An element of growth, which is unique, from the industrial sector. Nice combination of safety and growth. Hold, sleep well at night with the distribution yield.

REAL ESTATE
COMMENT

Dividends for a RRIF in USD. VNQ is always a good option, with a yield of high 2%, gives broad diversification. You'd be better off doing what he does, which is to find the sectors that have tailwinds and go bottom-up to find discounts. You could buy one or both of these: WIR.UN (industrial) or HOM.UN (apartments), as both are USD denominated, listed on TSX, in sectors that he likes.

Unknown
BUY

VNQ is always a good option, with a yield of high 2%, gives broad diversification.

E.T.F.'s
BUY

He finds the sectors that have tailwinds and goes bottom-up to find discounts. You could buy one or both of these: WIR.UN (industrial) or HOM.UN (apartments), as both are USD denominated, listed on TSX, in sectors that he likes.

0
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