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COMMENT
As a long-term hold, there are probably better stocks you could own. Has some concerns about the company's ability to grow longer term. He is a little bearish on the sector because wireless competition is intensifying, which has had an adverse effect on revenues. Would like it a little cheaper. Feels the dividend is safe.
telephone utilities
HOLD
Apartments in Western Canada, which has above average wage growth, population growth in the economy is doing very well. They have an opportunity to increase rents. They have about $450 million of debt coming due next year and will be able to finance at much lower rates. Will probably have dividend increase next year. Feels the stock is worth a lot more than $50.
property mngmnt
investment
BUY
Sells gas and electricity to both residential and commercial users. Lately have been focused on acquiring and growing in the commercial segments where volumes are much higher margins are lower. More volatile gas prices would cause less churn. Dividend is attractive at 11.6% and should be sustainable. Will be volatile.
Utilities
BUY
Owns properties in relatively remote areas such as Northwest Territories, Northern BC and Alberta. Good REIT with a good management team. Attractive yield of 5.3%. Primary concern is sent out their retirement residences for about $200 million but will take some cash flow out of the business. Until the $200 million is deployed, it will have drag on them for the next couple of quarters.
investment companies
funds
DON'T BUY
Doesn't own any of the insurance companies. They fund their liabilities through their investments. With equity markets being volatile and interest rates low, results have been pretty bad. These are a leveraged bet on the capital market. You are better off with banks because you at least get better dividends and more safety.
insurance
COMMENT
Been paring his holdings a bit because it has become fairly valued at this point. Will be able to benefit from a lot of growth in the next 2-3 years with big increases in drilling in Western Canada for conventional/unconventional gas. Also oil sands production will be doubling in the next 20 years.
oil
gas
TOP PICK
(A Top Pick Aug 23/10. Up 15.08%.) Apartment REITs. Turnaround story with a new CEO coming in late 2009 that is focused on spending money and gussing up portfolios and trying to realize an increase in occupancy. Rates have increased by about 10% since then. They're now at the stage where they can focus on growing and making acquisitions. NAV is about $3.25. Attractive yield of 4.4% with a payout ratio below 85%.
property mngmnt
investment
TOP PICK
Chemical manufacturer, primary 2 chemicals are for bleaching pulp or water treatment. This is the low cost producer in North America. Have $200 million of organic growth potential that he feels they will be able to realize in the next 12-18 months. Gives a good 9% yield. Payout ratio of 90%, going down to about 75% next year.
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