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Markets. You have to be careful in the Canadian landscape. In the last 5-6 years many companies have had excessive amounts of yields being generated, but have leveraged the balance sheet in order to deliver that yield. He looks for companies that have good free cash flow and gives some of that cash flow back to investors and reinvesting some of it into the business. Currently is seeing a lot of value in that part of the market. When looking at indices that are pure yield, they are down significantly more than the broader market, so he is seeing value in the yield part of the market. Thinks Canada is a sale that is going on. There are no US investors buying the Canadian market. Banks have been under pressure because people are trying to short the real estate market, real estate has been under pressure because Americans think it is overvalued, energy has been a headwind, and there haven’t been many Americans that want to take currency risk here. Many of these headwinds are starting to wane, so he thinks Canada should see a little bit of outperformance relative to other markets going forward. The part of the market you want to be invested in, are businesses generating revenue outside of Canada, more dependent on US growth.

This is a core holding in a dividend portfolio. They have gone into the US and bought UNS Energy, which is actually looking very good right now, and we are starting to see that come into earnings. At the same time they have divested their real estate business, both hotels and commercial real estate, so they are really focused on being a purer regulated utility. Low risk to earnings going forward. A good area to put some money to work.

He doesn’t necessarily think there is any downside to the company; he just doesn’t know what the catalyst is to push the stock higher. Their underlying business is retail door-to-door water heaters along with some other areas of business. There is not enough growth for him at the current time. Dividend yield of 6%.

A core holding for a portfolio. He would consider buying at lower valuation levels, because there has been a big rotation out of energy stocks into these real estate, hard asset style of investments. Don’t worry so much about yield, but worry more about cash flow and the growth of the business. The yield will grow with that. Dividend yield of 1.5%.

Why have Rate Reset Preferreds fallen off the cliff? When the Government of Canada cut rates, the 5 year followed and many of the rate resets reset to the government of Canada 5% plus reset spread. He was heavily invested in preferred shares in 2011 when he saw volatility in the market and it was a good area to hide. They are starting to look very interesting here. The problem with the reset spread now is that many of them are very, very skinny, so this is becoming a cheap cost of capital to CFO’s. Right now you have to assume they will not be recalled. Ask yourself what will be your yield post reset. From there determine if you are getting paid an interesting yield or not.

This gives significant revenue outside of the US, well over 50% of their Book. They also have a hidden gem in their portfolio called Exact Earth. Thinks they will eventually IPO that and sees significant value created for investors. At the same time you have activists that are holding stock, so management is going to be forced a little to create value for shareholders. Just reported great numbers.

Recently just did a great acquisition in the US, and are going more to being a regulated utility, low risk to earnings. They are going to be about 70% pro forma in the US going forward and will be less volatile. Recently financed this with a convertible debenture that has a very attractive term of 4% yield with 33% money down, effectively a 12% yield going forward, until the deal is closed. If you can buy some of that, that is an interesting way to get into the equity.

Thinks it has been unfairly punished. This has the best growth profile of the Canadian telcos, and at the same time it has the best track record of returning capital to investors through their buybacks or dividend increases.

Canadian Telcos. Right now it is an extremely expensive market versus historic valuations. In the past, these multiples were not too difficult because you always knew there was growth in the pipeline. You had wireless, broadband, video over wireless. Doesn’t know what the next real growth catalyst will be. Right now, paying a premium valuation in an environment where rates might go up, there are better investments in the market.

Very perplexing. When you look at housing starts in the US, they are up to 1.2 million from 600 million, as a base, that is a positive. The Cdn$ being weak is also a positive. Yet lumber stocks haven’t done anything. Thinks we are going to start seeing lumber make a bit of a turn around here, anticipating a better spring building season. Wouldn’t be surprised if we go to 1.5 million housing starts, which would be very, very good for lumber stocks. You have to be able to accept the risks. They are highly volatile investments.

This business has been transformed recently. Enbridge (ENB-T) has dropped down a lot of assets to this income fund. The strategy going forward is that this income fund will be a yielding vehicle, and you will get a little more growth out of Enbridge the parent. It is going to use the equity in this company to fund Enbridge growth. You are looking at a very stable yield, high quality assets, which are very sensitive to commodity prices, but more sensitive to volume. A very conservative yield well covered. If you are looking for solid yield going forward, this is the place to get it. He is looking for better growth on the Enbridge side.

Reported very good earnings yesterday. This has been a volatile stock. There are 2 camps that have formed in the stock. One is a Yellow Pages business that is very challenged going forward, and the other is more of a Davidson Henderson style, a business that has more growth in it. This is in the Print business, which has been declining, but has been a very, very high margin business. It will have the printing business that supports them going forward, but as they transition into a packaging business, about 10% of their business, that is what they will grow in. It is one to own, but wait for a bit of a pullback.

In energy he has everything in one of 3 buckets. 1) The “highly leveraged” names with very poor balance sheets and the potential to go bankrupt. 2) “Highly leveraged” names, that in a $30 environment would be highly levered on a cash flow multiple. 3) Solid balance sheets. This company straddles the 2^nd and 3^rd buckets. Balance sheet is okay, NETBACKS are some of the best in the industry, it is light oil. In a $40-$50 oil range, this company is fine. Have a good hedging program and the dividend has already been cut. One of the knocks is that they are a serial issuer of equity, and we are not going to see that at any time at these levels.

This company has not managed to grow its business outside of Canada. It is predominantly a business that runs in Alberta, so a bit of a bad postal code right now. There are better businesses if you want to play a rebound in Alberta. If you own, consider switching into Fortis (FTS-T) or Emera (EMA-T).

This company owns patents and collects revenue on those patents. They have to occasionally litigate on companies using their patents. This is one that falls in a deep, deep value category. If you have the time, there is value here. Trading at 3X cash flow and 3X EBITDA, very, very cheap. Has a pristine balance sheet. 8% dividend yield. There is value that can be unlocked here, and the CEO is retiring this year which might push that a little bit forward.