BUY
Had issues last 5-6 years. Weaker numbers last quarter. Overpaid for Allstream assets 5-6 years ago. These assets are now starting to turn around and add to the bottom line. Now connected to fibre. Still not the best in class but expect it could trade up into the low $30's in the next 6 months or so.
DON'T BUY
Utilities do not have the volatility of pipelines. (He owns the bonds and is quite comfortable with it.) They want to maintain a 30% market share in Alberta but they always have to deal with shutdowns and expect there will be some next year. Have to spend a ton of CapX on their plants in 2012. Prefers others such as Enbridge (ENB-T).
WEAK BUY
For a long-term hold? Cdn banks trade globally at a premium to BV. Will be reporting very soon and he expects some weak trading numbers. They are now trying to make an international impact on the wealth management side of the business. Don't look for much growth over the next year. Expect dividends will be raised.
BUY
Plugged into the oil sands and you don't have to think too much with this one. You have a good asset and really good demand. With Keystone being laid, it will be filled with oil.
SELL
Hotel properties. Has had so many problems in the last 5 years. Economic recovery is slow, but more important, tourism into Canada is getting new multiyear lows. They also have to upgrade their properties. Just cut the dividend by 20%.
PAST TOP PICK
(A Top Pick Nov 1/10. Up 25.38%.) Small cap commercial real estate trust, focused mostly in Québec. Properties are decent and management is okay. Trades at a discount to NAV. Numbers just came out and they were decent. Probably worth about $1.20. Distribution is sustainable at 9%.
DON'T BUY
Yield of about 7% and the market is kind of calling for a cut. He doesn't think they will. The environment is so bad for them because interest rates were not supposed to stay this low for so long.
TOP PICK
7.3% bonds. Trading at $.50 to the dollar but should be closer to $.80. Disliked this company for 6 years but bonds are ahead of the equity and preferred holders. Still have positive free cash flow. Make about $500 million of EBITDA. They are forced to pay down debt in order to survive. Even if they go into receivership, the bonds should get their money.
TOP PICK
Own a lot of assets out West. Own apartment buildings and they buy “Ma and Pa” 3-4 story apartment buildings and renovate them. Get tremendous growth in their net operating income. Trades at a discount to NAV of about 25%. Wouldn’t be surprised to see it at $25 by end of 2012. Management owns 20% of outstanding shares.
TOP PICK
8% bonds. Rated a noninvestment grade bond but tremendous value. That leverages is small.
PAST TOP PICK
(A Top Pick Nov 1/10. Up 8%.) Bell Aliant 4.37% 09/13/2017 Bonds.
PAST TOP PICK
(A Top Pick Nov 1/10. Up 12.76%.)
BUY
Has high respect for management. Partners have exchanged stocks with treasury stocks and the net result is about $38 million in cash.
HOLD
The problem is that the payout ratio is extremely high. The owners are such that they are probably going to let that happen and just gradually try to make it work. Good management. Constantly improving.
HOLD
Was a cloudy picture when management bought them out. They have upgraded their portfolio. Have quite a bit in Ottawa. Gaining significantly incredibility. There is a suggestion that they will need to come out with a new issue at some point, which will increase their liquidity.