BUY
Typically he does not invest in hotels but he owns this one. Have high and mid-grade quality properties. Strong management, reasonably large cap, 7% yield. Wouldn’t be top pick but he wouldn’t hesitate to but it.
DON'T BUY
Philosophical challenge because they focus on residential properties in northern areas. Quality of properties is not that high. Risky name. Valuation does not reflect the risk in the name.
SELL
Over-paying distribution and have done so for a long time. Not a big fan of senior management. They are more financial engineers. Cautious of this name.
TOP PICK
Value-add component to it. High yield so you get paid while you wait. Have a couple of properties with re-development potential that potentially support the valuation of the share price today.
TOP PICK
Non real estate. Outstanding management. Nitch airlines with competitive cost advantage. $1.56 dividend.
N/A
Supply and demand fundamentals in Canada are excellent, except in Calgary and Toronto. Single digit vacancy rates. People are going for yield and REITs are a yield play. Investors have to be careful that they are not fooled by yield. It should be judged on the cash flow. He looks at total return. New accounting rules (IFRS) will affect real estate. Beginning in January, you have market value accounting, not book value. It will highlight where value is lower or higher than share price. As trusts convert to corporations, he is seeing money flowing into REITs.
SELL
Entrepreneurs had some real estate skills and decided to acquire some assets and have a public vehicle. Has been challenged since inception. Small cap. He is cautious of this name.
DON'T BUY
High risk/high return REIT. Fort McMurray. He doesn’t have a lot of hotel investments because guests are normally there for one night. If you think Fort McMurray is going to do well, then you will do very well. Management likes a lot of debt and investors have to be comfortable with that approach.
BUY
Good properties and they are good managers. They were company building and not shareholder value building earlier but on the right track now. Announced some new developments. For the first time you will see some value-add activities out of them. Recently they did an acquisition - pretty accretive.
PAST TOP PICK
(Top Pick Jul 28/10, Up 18%) Apartment business in western Canada. They are true value creators. Started with 298 apartments in 1998 to over 6500 today. Is significantly undervalued.