Today, John Ewing and Stockchase Insights commented about whether MGA-N, AJG-N, MCB-T, MI.UN-T, DRVN-Q, SWIM-Q, MHC.U-T, CAR.UN-T, MEQ-T, AX.UN-T, SIA-T, CSH.UN-T, PLZ.UN-T, NXR.UN-T, HR.UN-T, DIR.UN-T, SRU.UN-T, FCR-T, BIP.UN-T, CRR.UN-T, AP.UN-T, CHP.UN-T, BEI.UN-T are stocks to buy or sell.
Supply/demand in the space is good. People usually move in to these places around age 80, and 2025 is the very beginning of baby boomers turning 80. This should really drive demand. Properties are hard to build, also tough to operate, so you really need good management. Entirely retirement, so a little more risk but also more upside. Does better when things in the sector are good.
SIA has a mix of retirement and long-term care, which is government funded, so it's always full. More bond-like, not a lot of growth but really predictable. Does better when things are weaker in the sector.
Supply/demand in the space is good. People usually move in to these places around age 80, and 2025 is the very beginning of baby boomers turning 80. This should really drive demand. Properties are hard to build, also tough to operate, so you really need good management. Entirely retirement, so a little more risk but also more upside. Does better when things in the sector are good.
SIA has a mix of retirement and long-term care, which is government funded, so it's always full. More bond-like, not a lot of growth but really predictable. Does better when things are weaker in the sector.
Diversified with office, retail, industrial in both Canada and US. Institutional investors tend not to like diversified REITs. Over their skis on the balance sheet, so forced to sell assets and a lot of the best ones. Has become more of an office REIT in challenged markets.
When REITs come back into favour, this won't be leading the parade. Best move on and deploy capital into one of the other suggestions from today.
Apartment buildings mostly in Alberta, a few in BC. Founder is one of the most remarkable entrepreneurs John's ever met. Good assets and Alberta is thriving. Tends to be more volatile than BEI.UN, but has strong fundamentals. Perhaps some pressure from immigration reform as it's more exposed to student housing, but that would be a short-term hiccup.
Biggest and most liquid apartment REIT in Canada, trades a little closer to NAV. Sold its mobile home segment. Exited Irish REIT this year. Big stake in a Dutch REIT that has been liquidating and return capital to shareholders. So it's been back to basics, concentrating on Canadian apartments.
Really good properties and management. Doesn't have the same rent growth in Ontario with rent control.
Dominates its industry. Likes an industry especially when that industry isn't growing, as it doesn't attract competitors. 50% market share of fibreglass pools, 5x bigger than the next player. Fibreglass is a better product than concrete, so market share keeps growing. Great CEO.
Pool starts are still way below long-term average, and this should recover over time. Has a presence in Canada, with biggest factory in Kingston ON. No dividend.
Most important brand is Take 5, offering a quick oil change. Take 5 has limited products, so customers appreciate the lack of upselling. That scaled-down concept also means you don't need highly trained technicians, which means lower labour costs. Also owns CARSTAR collision repair and car washes in Europe. Selling assets to eventually be just Take 5.
Only 1000 stores, so more room to grow than competition. Taking market share. Recession resistant. No dividend.
Great assets. Trades at the biggest discount to NAV. Greenberg family in Ottawa owns 40%. REIT hasn't been performing, so something has to change. Either the Greenbergs take the company private, bring in a partner, or sell to another REIT. Good yield of 3.64% while you wait.
(Analysts’ price target is $15.65)MCB provides services and equipment to the energy sector, such as drilling equipment and replacement parts. It also makes heavy-duty trailers. It is small at a $116M market cap, and cheap at 11.5X forward earnings. It has a decent dividend yield of 2.1%, a small buyback policy, earnings growth is expected to be decent, and analyst estimates are rising. Profit margins are strong and rising, and debt levels are low. We think it looks interesting here, and we would be comfortable buying today, although it is a small name, and we would be mindful around position sizing.
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AJG is an $81.5B insurance brokerage name that pays a yield of 0.8%, and it has grown its sales and earnings at a 10.5% and 18.0% five-year CAGR, respectively. Earnings are expected to grow nicely in the coming years, and analyst estimates are mostly rising. Margin expansion has been strong, with profit margins at 13.9%, and an EBITDA margin of 33.0%. Cash flow generation is good, and it has an acquisitive strategy. Debt levels are reasonable, and it trades at a fairly high valuation of 27X forward earnings, but this has been expanding over the years, and we feel it reflects the growing quality of the business. We like AJG for a high-quality insurance-related name over the long-term.
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Wells Fargo raised its target price on the stock recently, and the stock has seen some technical moves. Sentiment has shifted towards less concern on tariffs and investor anticipation of lower interest rates ahead. The stock is still down 7% YTD, but very cheap on valuation, and we think it was just 'beaten up' too much earlier this year. Consensus calls for a nice EPS recovery in 2026.
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Investing 101: Companies That Don’t Need Money are The Best Investments
This goes a bit in tandem with the first point. If a company doesn’t need money, and its growth is fully funded internally, you are not likely to get a phone call about it. The best companies simply go about their business, year after year, and compound capital. Without needing new equity, shareholders are not diluted. All growth accrues to the existing owners.
These companies can be harder to find. They may not trade much. They may not pay dividends. They may not make the news for 10 years, after which their strong investment performance might finally get noticed. But they are out there. Before buying any stock, an investor should look at how the share count has grown (or not) over the past 10 years. We certainly try to avoid companies that consider their stock like an ATM and issue shares too often.
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Most assets are in Quebec and the Maritimes. Strip plazas in smaller markets. Historically stable, not a lot of growth. Difficult to raise rents in these small markets, but high construction costs have prevented tenants from moving. So cashflow is growing faster than it has in a long time. Low-risk optionality to buy up minority interests of properties already invested in. Healthy yield.