| BUY | | Yellow Pages Income Fund | YLO.UN-T | 15.710 | A perfect trust. It has over 95% of the ad market in Canada, over 90% renew their subscriptions. Recently acquired SuperPages which increased their dominance. Have had a good run in the last little while. Still an attractive play. Have some efficiencies they can capitalize on with their latest acquiaition. | 2005-08-05 | |
| STRONG BUY | | Inter Pipeline Fund | IPL.UN-T | 10.740 | Payout ratio is between 80% and 85%. Yield is 7.1/7.15%. Very well diversified and stable cash flow producing company. 2 sides to their business. 1) Crude oil pipeline and gathering system which they have some flexibility in increasing tolls on. 2) Recently acquired a natural gas liquids extraction plant of which 80% is take or pay contracts. Expects distribution increases going forward. | 2005-08-05 | |
| WAIT | | Brick Group Income Fund | BRK.UN-T | 10.100 | Has about 70% market share in Canada. In a highly fragemented, very competitive furniture industry. Poor results last quarter because of margins being squeezed. Launching a mattress brand and the market is concerned on how they'll do relative to Sleep Country (Z.UN-T). Wait for the 2nd quarter results. | 2005-08-05 | |
| DON'T BUY | | IPC US Income Commercial REIT | IUR.UN-T | 12.100 | A Canadian REIT that exclusively invests in US property. Has 37. Well diversified in 13 states. Has $51 million preferred equity interest in a Bank of America building in San Francisco. Has done a good job of increasing distributions. Have had a bit of a run up over the last month and it's now fairly valued. | 2005-08-05 | |
| BUY | | CML Healthcare Income Fund | CLC.UN-T | 13.880 | A medical imaging company. Has a very stable component which is the laboratory business. The growth side is their MRI imaging. | 2005-08-05 | |
| DON'T BUY | | Connors Bros. Income Fund | CBF.UN-T | 15.110 | A classic case of elastic demand. In the last quarter or so, their costs have increased, and were unable to pass the costs on through higher prices. Had a dramatic hit to their sales numbers. | 2005-08-05 | |
| TOP PICK | | Primaris Retail REIT | PMZ.UN-T | 14.890 | (A Top Pick May 27/05. No change.) A very attractively valued trust. Excellent growth opportunities. Yield about 7.5%. Excellent management. Conservative payout ratios. | 2005-08-05 | |
| PAST TOP PICK | | Altagas Services | ALA.UN-T | 27.200 | (A Top Pick May 27/05. Up 8%.) Still likes. Represents good value anywhere between $24 and $26, so it's fairly valued at this point. | 2005-08-05 | |
| TOP PICK | | Calpine Power Income Fund | CF.UN-T | 10.800 | (A Top Pick May 27/05. Up 5%.) Very good value. | 2005-08-05 | |
| BUY | | Arc Energy Trust Units | AET.UN-T | 23.080 | In terms of risk/reward, this is one of the best royalty trusts. Well diversified. Conservative payout policy. Well run. Will be affected by any decrease in oil prices. Many of these trusts are pricing in $50/55 oil. | 2005-08-05 | |
| BUY | | Atlas Cold Storage Income Trust | FZR.UN-T | 5.730 | Feels they've cleaned up their act. Their accounting numbers are much better than they were in 2003. Most of the fees that were involved in their restructuring will go away this year which will improve cash flows. The warehouse sector in the US is improving. Probably undervalued at these levels. | 2005-08-05 | |
| BUY | | Parkland Income Fund | PKI.UN-T | 19.520 | A private, independent operator of gas stations. Higher crude oil has affected their margins as there's a lag between the time crude oil goes up and the time when they can pass on the increases. The opposite is also true. There's an opportunity for good value at these levels. | 2005-08-05 | |
| TOP PICK | | Fort Chicago Energy Partners | FCE.UN-T | 14.070 | Excellent in terms of diversification. Very stable. Good payout ratios. Likes the valuation at these levels. | 2005-08-05 | |
| BUY | | Superior Plus Income Fund | SPF.UN-T | 30.640 | 65% payout ratio. Have diversified in the last couple of years through acquisitions and so should experience quite a bit of growth going forward. Free cash flow in relation to free cash distributions is close to 90% and is lower than what he would like to see but should be able to grow into it with their new acquisitions. | 2005-05-27 | |
| DON'T BUY | | Retirement Residences REIT | RRR.UN-T | 9.120 | In long term care facilities. Demographics show that age 70 plus are growing at 2 X the general population. Since 2001, they have had steady declines in occupancy rates. Payout ratio is very aggressive. A lot of risk in this name. | 2005-05-27 | |
| BUY | | Chartwell Seniors housing | CSH.UN-T | 14.390 | Sitting pretty within an industry that's growing at 2 X the rate of the general population in relation to seniors over the age of 70. Have a higher allocation to independent living and assisted living which have higher margins than long term care. Have been a strong acquirer. Well diversified geographically. | 2005-05-27 | |
| DON'T BUY | | Legacy Hotels | LGY.UN-T | 7.050 | The premier hotel owner in Canada. A lot of asset quality in terms of their location. Hit by both 9/11 and Sars. Have really struggled to recover. They are under distributing in terms of where their cash flow is today. A lttle bit worried by this trust. Their track record hasn't been the greatest. Hotel REITs are high risk because length of their lease is typically one day or one week. | 2005-05-27 | |
| BUY | | Fort Chicago Energy Partners | FCE.UN-T | 12.910 | Has 50% ownership of a very stable cash flow producing asset, Alliance Pipeline. Also have Oxable (a natural gas liquid extraction facility). This one is very variable and subject to frac spreads. | 2005-05-27 | |
| BUY | | A Comment -- General Comments From an Expert | A Commentary | 35.620 | Sold interest to Epcor (EPE.PR.A-T) which should be very beneficial to them. Well managed. Has a lot of accretive growth. High level of net income to distributions. Very conservative. | 2005-05-27 | |
| BUY | | Inter Pipeline Fund | IPL.UN-T | 9.850 | A mid stream crude oil pipeline. Recently expanded into natural gas which he likes. On long term take or pay contracts. Doing fairly well on their Cold Lake pipeline. | 2005-05-27 | |
| BUY | | BFI Canada Income Fund | BFC.UN-T | 25.810 | Waste management is a great business, an ideal type of trust with long stable contracts, pricing power. Just made a major acquisition in the US. Double their revenue base. Hedged their currency exposure so they don't gert hit on currency. Very well managed. | 2005-05-27 | |
| DON'T BUY | | Connors Bros. Income Fund | CBF.UN-T | 16.070 | With acquisitions, now have a diversified product base. Last quarters numbers have not been very good because of a one time inventory charge which will not recur. Do not have the ability to pass on increased costs. Getting squeezed on prices of steel, fish, fuel. | 2005-05-27 | |
| TOP PICK | | Calpine Power Income Fund | CF.UN-T | 10.150 | The big issue is their relationship with Calpine Corp (CPN-N) on which there are lots of rumours on bankruptcy. The only real connection is through Calpine Corp.'s Calgary Energy Centre which has long term contracts with them. This is a speculative Top Pick with a little bit more risk. | 2005-05-27 | |
| BUY | | Yellow Pages Income Fund | YLO.UN-T | 13.950 | An example of a premier type trust business. Essentially own 90% of the total Canadian market in directories business. Sees some growth opportunities in their on-line advertising. It's about 3% of their total assets and is growing at about 40%. Well managed. | 2005-05-27 | |
| BUY | | RioCan Real Estate Investment | REI.UN-T | 19.600 | The largest retail REIT in Canada. Very well managed. Going forward feels that they will realize a lot of growth through the joint ventures they recently entered into which consists of taking underdeveloped retail properties, fixing and remodelling them and increasing the leasing around them. | 2005-05-27 | |
| TOP PICK | | Primaris Retail REIT | PMZ.UN-T | 14.840 | Mid market retail REIT. Have a unique partnership with (?) Property which will give them some good growth opportunities going forward. Conservatively managed. Good balance sheet in terms of ability to acquire. | 2005-05-27 | |
| TOP PICK | | Altagas Services | ALA.UN-T | 25.200 | Well diversified energy company. Recently announced that they are spinning off their natural gas regulated distribution pipeline in Alberta. Unitholders will not be affected as they will be given shares. Likes the management. Very conservative payout ratio on a free cash flow basis of 80%. | 2005-05-27 | |
