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| BUY | | BFI Canada Income Fund | BFC.UN-T | 27.220 | Payout ratio is reasonable at 85%. Recession resistant business. Management has done a great job in acquiring/expanding landfill sites. Organic growth is good at around 6%. Made a big US acquisition and have integrated it extraordinarily well. Hedged their US currency exposure. | 2006-07-14 | |
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| DON'T BUY | | Sequoia Oil & Gas Trust | SQE.UN-T | 13.400 | Merging with Daylight Energy Trust and will be known as Evergreen Energy Trust. It looked like a good deal at the beginning but terms have been changed because of production problems. That is disquieting. | 2006-07-14 | |
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| DON'T BUY | | Daylight Energy Trust | DAY.UN-T | 10.740 | Merging with Sequoia Oil & Gas Trust and will be known as Evergreen Energy Trust. It looked like a good deal at the beginning but terms have been changed because of production problems. That is disquieting. | 2006-07-14 | |
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| DON'T BUY | | Stephensons Rental Services | RNT.UN-T | 7.000 | Ideal business trust has stability, lack of competition and a payout ratio below 100%. This one exhibits none of those characteristics. Their market is highly dependent on construction/contractors, so any slowdown in housing will hurt. Payout ratio is well over 100%. 18% yield indicates a possible cut. | 2006-07-14 | |
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| DON'T BUY | | Superior Plus Income Fund | SPF.UN-T | 10.920 | Announced they were selling their aluminum division which is a positive step. Still feels they are involved in too many business lines. | 2006-07-14 | |
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| PAST TOP PICK | | Canada Cartage Diversified Income Fund | TRK.UN-T | 10.950 | (A Top Pick Apr 28/06. No change.) A great business model. Should continue to do well. | 2006-07-14 | |
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| PAST TOP PICK | | Duke Energy Income Fund | DET.UN-T | 12.300 | (A Top Pick Apr 28/06. Down 7%.) A good yield play. Has the potential to make acquisitions from their US parent that would be accretive with possible distribution increases. | 2006-07-14 | |
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| TOP PICK | | Bell Aliant | BA.UN-T | 34.050 | A great conservative, stable way to participate in the telephone industry. Yields about 8%. Conservative payout ratio of about 90%. Possible increased distributions in the next year or so because of surplus cash flow. Have some interesting acquisition opportunities. | 2006-07-14 | |
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| DON'T BUY | | Canexus Income Fund | CUS.UN-T | 7.080 | Has been hit when a number of pulp/paper mills have been shut down as they have been the supplier of sodium chlorate. Their big advantage is electricity costs. The price of sodium chlorate has remained relatively firm. There is a huge overhang because of the 61% ownership by Nexun. | 2006-04-28 | |
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| WEAK BUY | | Wajax Income Fund | WJX.UN-T | 38.550 | Their business is primarily supplying heavy equipment to mining/oil and gas, forestry and construction industry. The Sobey family owns 27% of it. 30% of their tour revenues are earned from servicing equipment they have sold. May be reaching the peak of its earnings potential. | 2006-04-28 | |
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| PAST TOP PICK | | Mullen Group Income Fund | MTL.UN-T | 34.090 | (A Top Pick Jan 20/06. Up 9.6%.) Still likes it. Have increased distributions. | 2006-04-28 | |
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| DON'T BUY | | Pollard Banknote Income Fund | PBL.UN-T | 10.000 | Contract for printing lottery tickets for New York State will terminate in June. Hoping to replace it with a contract with Ontario. Have been very creative in developing new lottery type products. Competition is two large US companies so there are political concerns. | 2006-04-28 | |
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| TOP PICK | | Duke Energy Income Fund | DET.UN-T | 12.980 | One of the largest midstream gas processors operating in western Canada. The primarily process sour gas and have a real technological advantage in their process. Yields 6.2%. A growth trust. | 2006-04-28 | |
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| TOP PICK | | Canada Cartage Diversified Income Fund | TRK.UN-T | 11.130 | New trust in March/06. Payout ratio of about 75%. Yield is about 9.2%. Like its business model. They basically have configured fleets to serve specific customers and are dedicated to those customers. | 2006-04-28 | |
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| HOLD | | RioCan Real Estate Investment | REI.UN-T | 23.190 | Continues to see the REIT sector is a good growth area. This one represents stable growth. (Management is targeting 5% a year.) Prefers Calloway (CWT.UN-T) which has about the same yield but represents a higher growth rate. | 2006-01-20 | |
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| HOLD | | Retirement Residences REIT | RRR.UN-T | 9.900 | One of the difficulties is that somewhere years ago, the Ontario government put in some incentives which added about 20,000 new beds to retirement homes which caused a huge oversupply. This is gradually being absorbed. They have a number of properties that are going to have to be upgraded which will cost them a fair bit of money. Could be a takeover. | 2006-01-20 | |
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| DON'T BUY | | Clean Power Income Fund | CLE.UN-T | 5.050 | A combination of hydro electric generation and biomass (basically burning scrap wood product). Hasn't fared terribly well in the market place recently as several of their hydro facilities they had low water levels. Also, the Quebec government changed the rules on tree harvesting. High payout ratio. | 2005-10-21 | |
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| BUY | | Liquor Stores Income Fund | LIQ.UN-T | 16.150 | Consumer spending continues to go along at a reasonable pace. A well constructed trust. A good franchise in the area in which it operates in. Has ample scope for expansion. Over time, should see a higher revenue stream translating into higher distribution. | 2005-10-21 | |
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| DON'T BUY | | Calpine Power Income Fund | CF.UN-T | 9.000 | Operates 3 very fine power generation facilities. The big problem is that the guarantees behind the power contracts are held by Calpine Corp. in the US which is virtually bankrupt. Calpine Trust has very little ability to call on their parent for back up revenues. | 2005-10-21 | |
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| DON'T BUY | | Fort Chicago Energy Partners | FCE.UN-T | 11.090 | The decline in unit prices of all income trusts has pretty much all been the result of the uncertainty that has been generated. The possibility for distribution increases are probably limited over the next year or so. Their Aux Sable facilty (a natural gas stripping plant) is at a disadvantage because of the spread between natural gas and liquid. | 2005-10-21 | |
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| DON'T BUY | | Great Lakes Hydro Inc | GLH.UN-T | 16.500 | Hydrology is something that you cannot have any guarantees on. Dependent on rainfall in the summer and snow fall in the winter. Unless water levels are high enough, the turbines don't have enough energy to drive them. | 2005-10-21 | |
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| TOP PICK | | Morneau Sobeco Income Fund | MSI.UN-T | 9.750 | A great Canadian success story. A benefits consulting firm. Yields a little over 9%. Extremely good quality trust in that about 95% of its revenues recur every year. Once they start consulting to a company, it essentially becomes a recurring stream of revenue. | 2005-10-21 | |
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| BUY | | Norcast Income Fund | NCF.UN-T | 10.200 | Makes steel balls and liners for ore crushers for mining companies. They have the technical ability to go to every mine site, examine the type of ore they have to crush and design the proper liner and balls. Not a lot of competition. | 2005-09-09 | |
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| BUY | | C.I.Fund Management | CIX-T | 25.490 | Thinking of conbverting to a trust. Good company. | 2005-09-09 | |
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| DON'T BUY | | Transat A.T. Inc (A) | TRZ.A-T | 19.320 | Can't see this as going to a trust. Far too cyclical and far too many factors which can influence the bottom line severely. | 2005-09-09 | |
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| DON'T BUY | | CanWest Global Comm. | CGS-T | 15.000 | Intends to convert to a trust without the National Post. The newspaper business tends to be fairly cyclical. National and local advertising can be quite volatile depending on the direction the economy is heading in. This will require a lot of due diligence to understand how much leverage there will be in the trust and how cyclical it will be. | 2005-09-09 | |
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| BUY | | UE Waterheater Income Fund | UWH.UN-T | 13.550 | Rent water heaters to households. Not cyclical, there's a known replacement cycle for water heaters, there's a known rental stream. Yield is about 6.6%. | 2005-09-09 | |
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| DON'T BUY | | Great Lakes Hydro Inc | GLH.UN-T | 19.940 | In theory power corps should be good models for income trusts because they are fairly stable. This one is totally dependent on hydro power, but you need water supply and it's difficult to predict what there will be down the road. | 2005-09-09 | |
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| TOP PICK | | BFI Canada Income Fund | BFC.UN-T | 30.060 | A favourite. They operate land fill sites and non-hazardous solid waste collection in Canada and the US. Has increased its distributions 4 times since becoming a trust and expects this to continue. | 2005-09-09 | |
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| DON'T BUY | | Retirement Residences REIT | RRR.UN-T | 9.350 | Earnings have dropped and had to cut distributions. Was the victim of Ontario government changes which encouraged a lot more building of retirement residences resulting in too many retirement homes for the older population. The situation will probably clarify itself over the next 3/4 years. | 2005-05-20 | |
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| VAGUE | | Agilent Technologies | A-N | 83.600 | Trust conversion is becoming controversial because of vote allowing option holders to vote and large windfall to employees. The windfall is not that large. Likes this trust. Gas weighted. Well operated. | 2005-05-20 | |
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| WEAK BUY | | Acclaim Energy Trust | AE.UN-T | 14.950 | Likes it. Like most energy trusts, not sure he would be buying. Highly gas oriented. Started small and built through acquisition. Distribution is paid at exactly $0.165 a month, even though their cash flow is higher than that. The result is that their payout ratio is 65/70%. | 2005-05-20 | |
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| TOP PICK | | Keyera Facilities Income Fund | KEY.UN-T | 16.180 | Good trust model. Located between gas fields and the consumer. They collect gas, process it, break it into natural gas liquids and ship the rest into the main stream pipelines. No real commodity risks. Basically being paid to transport a product from one place to another. Payout ratio in line at about 88%. Distribution is $1.26 which is expected to rise to $1.30 or so. | 2005-05-20 | |
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