COMMENT

Yields. Overvalued? If you are looking for yield with some sort of Delta (growth) going forward, stability and peace of mind, you will find that utilities, pipelines and REITs in particular still offer tax efficient incomes with a slope in growth to it with returns that are beating the market as a whole.

Unknown
STRONG BUY
Dream Office REIT

Commercially diversified. (Almost had it as a Top Pick today as he still sees upside in it.) Spinning off their entire industrial portfolio as a standalone REIT but will retain 43% to 46% ownership. Good value at these levels.

property mngmnt / investment
BUY ON WEAKNESS

Coal handling facility and terminal. Coal volumes have come down dramatically. Huge movement from coal to gas in the US that has also impacted the rail names. He would buy sub-$24.

INDUSTRIAL PRODUCTS
BUY ON WEAKNESS

Fantastic looking chart. Feels it is worth $36-$37, which is the current price. You have to factor in a lot of free cash flow growth. They are generating it but there is a limit to what one company can grow its cash flow by. He would prefer it at $34.

Energy Infrastructure, Industrials & Utilities
DON'T BUY
Transalta Corp

Large power generation company located in Canada, US and Australia. Numerous issues including a balance sheet that is more over leveraged than he would like, high payout ratio and a credit rating that has been cut. Their trading business has not done well this year. Doesn’t think the dividend will get cut but will not grow at all for the next few years.

electrical / electronic
BUY ON WEAKNESS

Allied Properties (AP.UN-T) or Calloway (CWT.UN-T)? 2 completely different REITs so you could buy both of them if you wanted. Expect that analysts will increase their target prices to the $32-$33 range. Great quality name. Exposed brick and beam finishes, Class I real estate. Quality management, quality assets, low payout and low leverage. Try to buy below $31 in order to get a 15% total return. 4.2% yield.

investment companies / funds
COMMENT
Smart REIT

Allied Properties (AP.UN-T) or Calloway (CWT.UN-T)? Two completely different REITs so you could buy both of them if you wanted.

investment companies / funds
DON'T BUY

Power generation plus has a small transmission business as well. 92% payout ratio so chances of a dividend increase is pretty slim. Average duration of the in place power purchase agreements is below 10 years while other power companies are in the mid teens to above. Sustainability is not as great as one of the other power names. 8.2% yield.

electrical utilities
COMMENT

Owns a portfolio of commercial real estate in Germany. Doesn’t have a valuation on this as yet because there hasn’t been 4 quarters of operation yet. B & C assets, quality management team, low leverage and low payout. Likes management. 7.4% dividend yield.

REAL ESTATE
COMMENT

If there was a mini-recession this year or next, would this be hurt? In any recession all REITs are going to be hurt. This REIT was absolutely hammered in 2008-2009 during the last turndown but on an operational basis, they did very, very well. Occupancy remained at 99%. He would prefer to buy it $4.75-$5 to get a 15% total return. If you’re happy with 10%, you should get it with this.

property mngmnt / investment
PAST TOP PICK

(A Top Pick Aug 4/11. Up 15.27%.) Would have done better but they announced they were going to be selling their seniors housing portfolio which raised questions on proceeds they would get and what they would do. 4.7% yield.

investment companies / funds
PAST TOP PICK

(A Top Pick Aug 4/11. Up 54.81%.) This one had been beaten up unnecessarily.

property mngmnt / investment
PAST TOP PICK
Primaris REIT

(A Top Pick Aug 4/11. Up 28.23%.) The only predominantly mall REIT in Canada. Haven’t done anything overly spectacular in the last year but it was cheap. Still sees some upside.

property mngmnt / investment
BUY ON WEAKNESS
InterRent REIT

Apartments in Ontario. Good management. Distribution was just increased 33%. Wait for a pullback into the low $5’s.

property mngmnt / investment
COMMENT

Power business married with a utility business. Probably worth $7 and he would probably nibble away in the low $6’s. Some of their acquisitions have exposed them to a little bit of the merchant power sector, meaning their generation isn’t fully contracted for the long-term but doesn’t think this will be a significant component of cash flow going forward.

electrical utilities