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| Andy Nasr of Middlefield Capital |
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| TOP PICK | Algonquin Power & Utilities Corp | AQN-T | 6.190 | Likes it because it is good relative value. Acquisitions that would require regulatory approval in US. Name that gets 8% free cash flow yield and payout ratio less than 40%. | 2012-02-16 | ||
| DON'T BUY | BCE Inc. | BCE-T | 39.810 | Concerned about longer-term growth prospects. Majority of profits are from wire line profits and more and more people are opting out of having a wire line. | 2012-02-16 | ||
| TOP PICK | Bank of Nova Scotia | BNS-T | 53.620 | Relatively limited exposure to Canadian consumer. Good opportunity to grow outside of Canada. Just raised money a few weeks ago. Longer-term value is $60-65 range. | 2012-02-16 | ||
| BUY | Canadian National R.R. | CNR-T | 76.590 | Best rail operator in North America with very high margins. Longer term you can’t argue with it. | 2012-02-16 | ||
| HOLD | Veresen Inc | VSN-T | 15.510 | Continues to like the mid-stream sector. Primary concern is that there might be less volume flowing through pipelines. Have until 2015 to book up the pipeline. | 2012-02-16 | ||
| WEAK BUY | Freehold Royalties | FRU-T | 20.450 | Has some concern about the business. Horizontal drilling on their properties has higher decline rates. As they decline it will put pressure on the company to go out and make acquisitions. Potential room for dividend increase. | 2012-02-16 | ||
| DON'T BUY | Just Energy Group | JE-T | 12.370 | Is fine. He has concerns about longer-term growth. Gas prices are low and people may not want to lock in. | 2012-02-16 | ||
| DON'T BUY | Sunlife Financial | SLF-T | 20.880 | Doesn’t own lifecos. We have had volatile equity environments and interest rates have been low. This will continue so it will constrain growth. He would prefer to own banks. MFC would be better than SLF in the lifeco space is you must own it. | 2012-02-16 | ||
| TOP PICK | Westshore Terminals Inc. | WTE.UN-T | 24.600 | Good company and they will hold it because they think the dividend will be increased quite substantially. Contract they will renew with TCK at considerably higher prices. It could eventually be taken out by TCK. The one thing that could go wrong is that it is a pretty expensive stock. Rival terminals could not take business away for 4 to 5 years. | 2012-02-16 | ||
| BUY | Killam Properties Inc | KMP-T | 12.230 | Really likes it. Has a dominant market share in eastern Canada. Ship building contract. A non-rent controlled market. Manufactured housing is not CMHC eligible yet but it is just a matter of time. Lots of room for dividend growth. | 2012-02-16 | ||
| PAST TOP PICK | Brookfield Office Properties Ltd | BOX.UN-T | 25.350 | (Top Pick Nov 11/11, Up 13.77% Total Return) Almost made it a top pick today. | 2012-02-16 | ||
| BUY | Chartwell Seniors Housing | CSH.UN-T | 8.830 | Acquired a bunch of nursing homes in Ontario yesterday. Street is optimistic. Longer term it should work out for them. The portfolio has not reached its potential. Possibility that in 3-5 years they could be $8-10. They could get acquired, too. | 2012-02-16 | ||
| N/A | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Markets: A bit of a rotation into cyclical stocks and this put pressure on dividend stocks. REITs have had a run but net operating income will remain and higher valuations are indicative of higher net asset values. | 2012-02-16 | ||
| PAST TOP PICK | Canexus Corp | CUS-T | 7.680 | (Top Pick Nov 11/11, Up 27.49% Total Return) Payout ratio will go well below 90% this year. | 2012-02-16 | ||
| BUY | Artis Real Estate Investment Trust | AX.UN-T | 15.750 | Dividends are sustainable. We’ve seen a huge change in fundamentals across the board. That is manifesting itself through the office sector. Rents are starting to roll a lot higher. Good exposure to western Canada. You want to hang onto it. Ability to grow AFFO and distribution. | 2012-02-16 | ||
| PAST TOP PICK | InterRent REIT | IIP.UN-T | 3.730 | (Top Pick Nov 11/11, up 29.66% Total Return) | 2012-02-16 | ||
| BUY | MI Developments | MIM-T | 36.600 | Sees considerable up side. There is single tenant risk in Magna. 5.7% yield should be able to grow. | 2012-02-16 | ||
| PAST TOP PICK | Altagas Ltd | ALA-T | 29.800 | (A Top Pick Aug 23/11. Up 15.49%.) Sees Upside to around $33. | 2011-11-11 | ||
| Comment | BCE Inc. | BCE-T | 39.750 | 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. | 2011-11-11 | ||
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| BUY | Canadian Oil Sands | COS-T | 21.110 | Attractive valuation and pays a good dividend. Expect oil Sands stocks will have some cost pressures as they expand production. Feels oil prices will be $90-$100 for the next 10 years. | 2011-11-11 | ||
| HOLD | First Capital Realty | FCR-T | 16.470 | Grocery/drug stores are their anchor tenants. There is big demand from international/US retailers for retail space in Canada because of the good economy and rents are cheaper. Great management. | 2011-11-11 | ||
| Comment | Keyera Corp | KEY-T | 46.990 | 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. | 2011-11-11 | ||
| DON'T BUY | Manulife Financial | MFC-T | 12.040 | 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. | 2011-11-11 | ||
| BUY | Northern Property REIT | NPR.UN-T | 28.720 | 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. | 2011-11-11 | ||
| HOLD | Provident Energy Ltd | PVE-T (DEAD) | 9.410 | Extreme company that focuses on infrastructure. Have a great development pipeline, which they can potentially expand their services. Confident that they will be able to increase their dividends in the next 12-18 months. Valuations in this sector are getting a little bit stretched. | 2011-11-11 | ||
| PAST TOP PICK | Canadian Real Estate Investment | REF.UN-T | 35.190 | (A Top Pick Aug 23/11. Up 8.1%.) | 2011-11-11 | ||
| BUY | Just Energy Group | JE-T | 10.660 | 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. | 2011-11-11 | ||
| TOP PICK | Brookfield Office Properties Ltd | BOX.UN-T | 22.180 | The premier office portfolio in Canada with AA and AAA properties. NAV is around $25. Own about 12 million square feet of development potential. Payout ratio is reasonable. Good chance of a dividend increase in the next couple of years. Yield of about 4.9%. | 2011-11-11 | ||
| HOLD | Boardwalk REIT | BEI.UN-T | 48.690 | 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. | 2011-11-11 | ||
| BUY | Ag Growth International Inc | AFN-T | 30.750 | Grain handling equipment. Feels 7.8% dividend is sustainable. Payout ratio of about 55%. Biggest concern is their international business, which is about 15% of revenue with an objective to get to 40%. Expect this will be put on hold for the next 12-18 months. | 2011-11-11 | ||
| TOP PICK | Canexus Corp | CUS-T | 6.190 | 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. | 2011-11-11 | ||
| TOP PICK | InterRent REIT | IIP.UN-T | 2.810 | (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%. | 2011-11-11 | ||
| TOP PICK | Altagas Ltd | ALA-T | 26.090 | Middle man processor of energy, distribution. Power production. Strong development pipeline. Will benefit from higher power prices. Reasonable payout ratio and can increase dividends in future. | 2011-08-23 | ||
| BUY | Bank of Nova Scotia | BNS-T | 51.430 | He is underweight financials. Good results from BMO this morning. Canadian banks in general had a pretty big tailwind lending to Canadians. And will now be a headwind with debt levels being so high now. Definitely a good place for along term outlook. | 2011-08-23 | ||
| BUY | Canadian Imperial Bank of Commerce | CM-T | 71.630 | Significant exposure to Canadian consumer. Recently acquired an investment company in the US, which will be accretive next year. You could see a very competitive environment in Canada and it could put pressure on the price. | 2011-08-23 | ||
| BUY | Husky Energy | HSE-T | 24.930 | Longer term he is bullish on oil equity prices. HSE represents compelling value. Good discount to net asset value and can increase production. | 2011-08-23 | ||
| BUY | Inter Pipeline Fund | IPL.UN-T | 16.040 | Energy infrastructure company. Huge increase in oil and gas production conventional and unconventional. Production expected to triple in the next 10 years. 6% yield. | 2011-08-23 | ||
| TOP PICK | Canadian Real Estate Investment | REF.UN-T | 32.990 | Own industrial, commercial and office properties. Strong development pipeline so can grow size of portfolio by 10-15% in next few years. Payout ratio is low so there is room for a payout increase. | 2011-08-23 | ||
| BUY | RioCan Real Estate Investment | REI.UN-T | 24.990 | Pretty good upside left. Retail locations. National tenants. Very good management team. Likes retain sector. Economy here is doing relatively well. Easiest to reach consumers in Canada with majority in 6 largest centers. They can increase cash flow over the next 5-10 years. | 2011-08-23 | ||
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| BUY | Toronto Dominion | TD-T | 73.300 | Strongest deposit base in Canada. Credit card receivables they recently got will give some accretion. Definitely likes TD. | 2011-08-23 | ||
| DON'T BUY | Yellow Media Inc | YLO-T | 0.930 | Not worth getting into. They are skating on thin ice. Management has a huge task ahead of them. Print business is in secular decline, down about 10% a year. It is harder to solicit ad sales for only part of business. Prefers the preferred. You will get capital gain and redemption in 2017 plus the dividend as long as they don’t go under. | 2011-08-23 | ||
| N/A | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Market: We are lucky in Canada that we have opportunities for income stocks. You can get income yields in excess of 4,5 or 7%. US are saying they are keeping interest rates low for a couple of years. | 2011-08-23 | ||
| DON'T BUY | Chorus Aviation Inc | CHR.B-T | 4.320 | Operates some of the regional airlines. It’s like junk air Canada debt. Yield sustainability is based on debt rating of Air Canada. Leary of jumping into it. | 2011-08-23 | ||
| BUY | Bell Aliant | BA-T | 27.200 | Immune from wireless issue the others are facing. Must build out its home network. Are spending billions to build out network. Taxable in 2013. Dividend is sustainable. | 2011-08-23 | ||
| HOLD | Extendicare REIT | EXE.UN-T | 7.480 | Will have to face reduced sales. Regulatory problem. Would sell if it pops a dollar or two. | 2011-08-23 | ||
| TOP PICK | InterRent REIT | IIP.UN-T | 2.400 | Apartment REIT, mostly on Ontario. Off the institutional radar screen. Occupancy increase of 10% over last couple of years. Will make acquisitions to grow. Nice yield. | 2011-08-23 | ||
| BUY | TransGlobe Apartment REIT | TGA.UN-T | 10.950 | Likes it. Just started buying. The apartment sector is somewhat defensive because if the economy goes down, demand for low rent housing increases. 3% increase allowed next year. | 2011-08-23 |
