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TOP PICK
(A Top Pick Nov 28/07. Down 16.2%.) Laboratory diagnostics, one of 3 in Ontario. Regulated and new contracts have been signed giving good 3-year visibility. Also have medical imaging with both Canadian and US components. Clean balance sheet and very conservative management. 8.5% yield should be safe with their 80% payout ratio.
other services
TOP PICK
Main box office business is relatively stable and recession resistant. Low payout ratio. Clean balance sheet. Strong management. Media advertising on screen is the growth engine and in this environment may be somewhat challenged by that today's price you have an option on the growth. Their loyalty program “Scene” allows advertisers to reach the 18 to 25 demographic.
other services
HOLD
Converted to a Corp. from a trust and cut its distributions. Waste management is a recession resistant group. Positive on the long-term story. One issue is the balance sheet where US debt is a little closer to the covenant than she would like. Some pressure from the market waiting to see how they de-leverage themselves in the US and this is currently in the works. Wait for the results before Buying. Good long-term hold.
Transportation & Environmental Services
DON'T BUY
BUY ON WEAKNESS
Focused on retail to northern and remote communities. Recession resistant. Made an acquisition of a similar company in the Caribbean, which is working out quite well. Near-term there could be softness in their quarter over quarter numbers because of the Indian residential schools settlement check last year. Outlook is quite good.
merchandising
lodging
HOLD
Has been hit pretty hard. Peers have been plagued by debt but their business is quite different and more insulated because of their market position in Canada. Expects some weakness in advertising revenues but they are offsetting somewhat by online advertising and this looks quite good. Have some debt maturities coming up in June but will be able to rule that over without any problem. Distribution is very safe.
communications
media
BUY
13% yield is safe. Conservatively run. Clean balance sheet. Number of projects coming on stream. Pretty good visibility on growth. Balanced in that it has a 1) power business, 2) gathering and processing business and 3) NGL extraction. Those 3 tend to move out of step with each other so weakness in one place could have strength somewhere else. Good hedges.
oil
gas
