| TOP PICK | | Medical Facilities Corp. | DR.UN-T | 9.200 | (A Top Pick Jan 27/06. Down 24%.) Was hurt quite a lot because of the perception that currency exposure would hurt. Valuations are compelling. Probably one of the best operators in the specialty hospital business. Cash flow is very secure and their currency hedge protects this until 2008. Payout ratio is 85%. | 2006-06-30 | |
| TOP PICK | | KCP Income Fund | KCP.UN-T | 9.850 | Bleach manufacturer. Once Clorox hedges come off they will be able to raise their prices. Recently diversified into the consumer health sector by becoming a contract manufacturer for Johnson & Johnson (JNJ-N), Pfizer (PFE-N), etc. Distribution of 10.6%. | 2006-06-30 | |
| TOP PICK | | Sleep Country Canada | Z.UN-T | 23.230 | Mattresses are big-ticket items. A recession resistant type of business. Management always under promises and over delivers on their financial results. Payout ratio has decreased since their IPO to about 75%. Will probably expense some costs because of their Quebec acquisition. | 2006-06-30 | |
| PAST TOP PICK | | Livingston Int'l Income Fund | LIV.UN-T | 25.990 | (A Top Pick Jan 27/06. Up 2.5%.) Expect the synergies from their last year’s acquisition will come through in the next 6 months. Payout ratio is very comfortable at 85%. | 2006-06-30 | |
| PAST TOP PICK | | Chemtrade Logisitics Inc. | CHE.UN-T | 10.280 | (A Top Pick Jan 27/06. Down 13%.) Hurricane hit one of their plants last year so they had to undergo some downtime and raw material costs have gone up. Believes these issues are temporary. 14% yield is pricing in any risk factor. | 2006-06-30 | |
| DON'T BUY | | Boston Pizza Royalties | BPF.UN-T | 17.500 | 7% yield which is considered quite low. Same store sales growth has been spectacular. Has not been lower than 6% in the last 10 years. One of the problems he has is the expectation of the price. Holds only a small weighting. If you have a diversified portfolio, it is probably OK. | 2006-06-30 | |
| DON'T BUY | | Cineplex Galaxy Income Fund | CGX.UN-T | 13.530 | Largest theatre chain in Canada. Have some concerns on the overall health of the entertainment/theatre industry. | 2006-06-30 | |
| BUY | | Crescent Point Energy Trust | CPG.UN-T | 21.830 | Weighted a little bit more are on the gassy side. Continuing to make acquisitions, so the percentage will change. Payout ratio is very comfortable so shouldn't be affected too much by changes in gas prices. | 2006-06-30 | |
| BUY | | Cathedral Energy Services Income Trust | CET.UN-T | 10.820 | Provide rentals of drilling related equipment, mainly hardware and software. These services are in high demand. High ROE of about 23% for the past five years. No debt. Low payout ratio of about 50%. | 2006-06-30 | |
| Comment | | Lakeport Brewing Income Fund | TFR.UN-T | 16.100 | Low priced beer. Likes the management. If the big brewers become active, there is a competition risk and they would have to adjust accordingly. Sold his holdings when the valuation went up. | 2006-06-30 | |
| DON'T BUY | | Pollard Banknote Income Fund | PBL.UN-T | 10.050 | 1 of 3 lottery ticket providers in Ontario. Downgraded to a secondary provider on a contract with the state of New York. Until they have some clarity as to what they can do to replace the loss of revenues, he would stay clear. | 2006-06-30 | |
| BUY | | Great Lakes Carbon Income Fund | GLC.UN-T | 9.600 | World's largest producer of calcined petroleum coke. Managed to earn a comfortable margin in 2005. In 2006, the volumes are off a little bit but they also have very strong commodity prices. Have a currency hedge in place for a couple of more years. | 2006-06-30 | |
| BUY | | Yellow Pages Income Fund | YLO.UN-T | 16.100 | One of the premier income trusts. Yield is about 6.5/7%. Valuation is still very fair. Working on some good activities for their clients. | 2006-06-30 | |
| BUY | | Extendicare Inc | EXE-T | 25.150 | A major nursing home operator in North America. 80% of the earnings come from the US. Converting to in income trust which could result in a $28/29 price. Have one of the best franchises in the business. Occupancy rates are very good. Margins are high. | 2006-06-30 | |
| BUY | | Progress Energy Trust | PGX.UN-T | 16.300 | Very high quality assets. 75% natural gas. Have had some recent drilling success. Have hedged a lot of their natural gas exposure. | 2006-06-30 | |
| BUY | | Keystone North America Inc. | KNA.UN-T | 8.310 | 5th largest funeral homes in North America and most of them are in rural areas. On the acquisition trail. Very prudent operators. | 2006-06-30 | |
| BUY | | Penn West Energy Trust | PWT.UN-T | 44.900 | One of the larger energy trusts. 50/50 weighting in oil/gas. Have a huge land base which they farm out and collect royalties on. Sitting on Canada's largest light oil field. If you are positive on energy, this is a very, very good name. | 2006-06-30 | |
| DON'T BUY | | Davis & Henderson Income Fund | DHF.UN-T | 17.700 | The chequing industry is a very mature one. Cheque usage has been declining for years and is currently in about a 3/5% decline. Company has done a good job in mitigating a lot of the headwinds. Recently made an acquisition in the mortgage business but they paid a huge multiple, about 14 X cash flow. Timing is at the peak of the cycle. | 2006-06-30 | |
| BUY | | Trinidad Energy Services | TDG.UN-T | 17.760 | 3rd largest driller. Drilling has been very robust during the past winter. Relatively clean balance sheet to make acquisitions. Recent one in the US got them 20 more drilling rigs. | 2006-06-30 | |
| WEAK BUY | | Aliant | AIT-T | 33.170 | Becoming a trust on July 10. A regional player. When the assets go into the trust, they will not have the high growth of the wireless business. Distributions should be very secure but with a modest capital appreciation. | 2006-06-30 | |
| BUY | | Baytex Energy Trust | BTE.UN-T | 24.200 | Has 3 elements, conventional, heavy oil and some natural gas. Have some cost efficiencies in place. Differential between heavy and light oil is narrowing. | 2006-06-30 | |
| HOLD | | Pembina Pipeline Income Trust | PIF.UN-T | 18.050 | Have announced that they will be issuing additional units which could dilute the price. The company is doing this to clean up their balance sheet and may not have much effect. | 2006-03-31 | |
| TOP PICK | | K-Bro Linen Income Fund | KBL.UN-T | 14.900 | In the laundry management business, catering to healthcare and hospital sectors. Revenue is backed by long-term contracts. $14 or below would be a good entry point. | 2006-03-31 | |
| BUY | | Enerplus Resources Fund | ERF.UN-T | 58.570 | A prudent operator with a low risk profile. | 2006-03-31 | |
| TOP PICK | | Sleep Country Canada | Z.UN-T | 28.020 | Specialty mattress retailer in Canada. Very stable business. Margins are very good. Good management. Payout ratio has been decreasing since they started and is now 75%. Just acquired a US company and a Quebec company. We'll be spending capital to increase market share which could result in some selloff of shares. Opportune time to buy. | 2006-03-31 | |
| BUY | | Penn West Energy Trust | PWT.UN-T | 42.690 | Trades at a price to net asset value which is cheaper than most of the oil/gas trusts. Payout ratio is 60%. Debt to cash flow is 6:1. They hold 4.5 million acres which is good for farming out and they collect the royalties. They hold 40% interest in Pembina Cardium which is light oil. | 2006-03-31 | |
| TOP PICK | | Yellow Pages Income Fund | YLO.UN-T | 16.240 | Still a little bit below where it should be trading in terms of its net asset value. Online business is growing at about 40/50% and visitors are directed to their site. There is a new project providing voice directory over cellphones. They also have potential to make acquisitions. | 2006-03-31 | |
| BUY | | CML Healthcare Income Fund | CLC.UN-T | 14.610 | One of the best healthcare providers in Canada. Provide lab testing in Ontario and medical imaging in five provinces. Hitting resistance because it the delay in negotiations for rate increases with the Ontario government. The company feels that negotiations are going well. At a good level. | 2006-03-31 | |
| DON'T BUY | | Canadian Oil Sands Trust | COS.UN-T | 167.600 | The largest name in the income trust sector. A lot of funds have to buy this name because of its size. Your participation will probably depend on oil prices. If you believe they will continue to be high, it may be one you should consider holding in a moderate level. Price is very high and includes a lot of optimism. | 2006-03-31 | |
| TOP PICK | | Chemtrade Logisitics Inc. | CHE.UN-T | 11.650 | Good price. | 2006-01-27 | |
| TOP PICK | | Livingston Int'l Income Fund | LIV.UN-T | 25.500 | In the customs brokerage business. They benefit from the good cross border trade. | 2006-01-27 | |
| TOP PICK | | Medical Facilities Corp. | DR.UN-T | 11.900 | US specialty hospitals operating in South Dakota and Oklahoma. Can grow by acquisition. About 10% yield. | 2006-01-27 | |
| PAST TOP PICK | | Morneau Sobeco Income Fund | MSI.UN-T | 12.990 | (A Top Pick Nov 11/05. Up 25%.) Revenues are very steady. Should continue to do very well. Continue to hold. | 2006-01-27 | |
| PAST TOP PICK | | KCP Income Fund | KCP.UN-T | 10.800 | (A Top Pick Nov 11/05. Up 6.8%.) For the past few years, they've had some operational problems but that seems to be behind them. Still likes. | 2006-01-27 | |
| PAST TOP PICK | | CML Healthcare Income Fund | CLC.UN-T | 15.500 | (A Top Pick Nov 11/05. Up 16%.) A nice steady business. They are still waiting for the biannual contract negotiations with the Ontario government, which is not concerned. Still likes. | 2006-01-27 | |
| HOLD | | TransForce Inc. | TFI-T | 18.800 | Canada's largest trucking company. They grow by accretive acquisitions. Their margins are very high because of their pricing power. They have increased distributions steadily. Getting to be fully valued. | 2006-01-27 | |
| DON'T BUY | | Associated Brands Income Fund | ABF.UN-T | 2.690 | Manufacturer of private label dry-blend food products. Has serious concerns. Have yet to achieve their targets. The high Canadian$, high material costs and intense national competition have continued to hurt them. | 2006-01-27 | |
| BUY on WEAKNESS | | Aeroplan Income Fund | AER.UN-T | 12.750 | A high-quality income trust. Fairly healthy growth. You get about 10/12% total return which includes growth plus distributions. | 2006-01-27 | |
| HOLD | | Yellow Pages Income Fund | YLO.UN-T | 16.500 | A very solidly run trust. Has made good acquisitions and optimised the margins. The last acquisition would generate 4/5% increase in distributions. | 2006-01-27 | |
| HOLD | | Precision Drilling Corp. | PD.UN-T | 38.500 | The largest contract driller in Canada, operating more than 400 rigs. Drilling activity in western Canada will be very intense. Rates are up to 10% higher than last year. If you don't own, try to buy at a lower price. | 2006-01-27 | |
| HOLD | | Great Lakes Carbon Income Fund | GLC.UN-T | 10.770 | The world's largest producer of calcine petroleum coke. The pricing for their commodity is quite strong because of the limited supply. Have generated good margins. The good news is built into the stock now. | 2006-01-27 | |
| DON'T BUY | | Pengrowth Energy Trust (B) | PGF.B-T | 23.240 | Sold 2% of their production on an odd lot arrangement. Allows the company to capitalise on the possible upside of others drilling on their land without committing capital. Outlook for natural gas is weaker now and they are at the upper end of operating costs. | 2006-01-27 | |
| WATCH | | Superior Plus Income Fund | SPF.UN-T | 23.660 | They have a business model that continues to diversify. Its core business was propane but in recent years have made acquisitions not related to the original business. Have some operational issues which management is addressing. | 2006-01-27 | |
| DON'T BUY | | Brick Group Income Fund | BRK.UN-T | 8.660 | Has concerns that they have a number of businesses in addition to their core Brick stores. They should focus on their core business without distraction of other activities. Distribution is tight. | 2006-01-27 | |
| HOLD | | BCE Inc. | BCE-T | 27.400 | Looking for an announcement regarding spinning off rural telephone lines into income trust which should create some value for them. Getting about 5% yield. | 2006-01-27 | |
| HOLD | | Arc Energy Trust | AET.UN-T | 26.680 | A blue-chip royalty trust. Have a very stable group of assets. Very comfortable reserve life at 12 years. Recent acquisition of a pool of light oil should be good. | 2006-01-27 | |
| HOLD | | Madacy Entertainment Income Fund | MEG.UN-T | 6.350 | Competes in the budget CD and DVD business. Customers include Wal-Mart, Best Buy, mass merchants and specialty shops. One of their clients just filed for bankruptcy which represented about 5% of their total revenues. It is now pricing in most of the risk. | 2006-01-27 | |
| BUY on WEAKNESS | | BFI Canada Income Fund | BFC.UN-T | 29.000 | Garbage collection and landfill operation in Canada and the US. Prudent management team. Grows by acquisition. Recession proof. Not cheap right now. | 2006-01-27 | |
| HOLD | | K-Bro Linen Income Fund | KBL.UN-T | 14.680 | Canada's largest laundry/linen processing company. Clients are basically hospitals and hotels in major metropolitan areas. Payout ratio is very conservative at 70%. Fairly priced at this time. | 2006-01-27 | |
| BUY on WEAKNESS | | CCS Income Trust | CCR.UN-T | 32.410 | An energy service company that cleans up waste. A boon to the service sector. Not inexpensive, so buy on the dips. A low 4% yield because they have a growth profile which is in the high single digits. | 2005-11-11 | |
| DON'T BUY | | Davis & Henderson Income Fund | DHF.UN-T | 18.290 | The major supplier of printed cheques to the chartered banks. Cheque usage has been in decline. Have a lot of cost efficiencies. Has had some earnings revisions downwards. | 2005-11-11 | |
| Comment | | Fording Canadian Coal Trust (Inc Trust) | FDG.UN-T | 41.300 | Have been hearing about a re-organization to a royalty trust, but doesn't believe this will result in any tax savings for unit holders. | 2005-11-11 | |
| TOP PICK | | CML Healthcare Income Fund | CLC.UN-T | 13.030 | Have a laboratory blood and urine testing section in Ontario as well as a medical imaging business in 5 provinces. One of Canada's best health care companies. Expects the Ontario government will be giving approval for an increase in fees. | 2005-11-11 | |
| WEAK BUY | | StarPoint Energy Trust | SPN.UN-T | 20.540 | Merging with Acclaim (AE.UN-T) in January as well as applying for a listing on the NYSE. There will also be a seperate exploration company formed which will be run by Starpoint management. His concern would be on the slightly shorter reserve life. | 2005-11-11 | |
| WEAK BUY | | Penn West Energy Trust | PWT.UN-T | 32.400 | He just recapped the earnings announcement made earlier in the week. Felt they had benefited from higher commodity prices, but mitigating this was their higher operating costs as well as some processing bottle necks that they experienced. Have 4.5 million acres of undeveloped land which they will farm out. | 2005-11-11 | |
| DON'T BUY | | Golf Town Income Fund | GLF.UN-T | 10.290 | A very fragmented market with a lot of smaller players. A discretionary fund which they are not interested in. | 2005-11-11 | |
| DON'T BUY | | Pizza Pizza Royalty Income Fund | PZA.UN-T | 8.920 | Generally does not participate in restaurent royalty funds. Prefers Boston Pizza (BPF.UN-T) which he owns. | 2005-11-11 | |
| BUY | | Boston Pizza Royalties | BPF.UN-T | 14.700 | Generally does not participate in restaurent royalty funds, but this one has had a very good record of same store sales growth for the past 10 years. | 2005-11-11 | |
| HOLD | | Superior Plus Income Fund | SPF.UN-T | 21.790 | In the last several years have started to diverisfy from propane into areas such as a pulp chemical, dry wall and flat rolled aluminum. During the last couple of quarters, there were performance issues with the original propane business. | 2005-11-11 | |
| BUY | | Entertainment One Income Fund | EOF.UN-T | 6.250 | The largest national wholesaler of DVD's and CD's in Canada. Recently made a US acquisition of a content provider. This will be less seasonal and cyclical with higher margins. At the current price, the distribution is 24%. | 2005-11-11 | |
| BUY | | Bonavista Energy Trust | BNP.UN-T | 33.150 | One of the better energy trusts that are currently on the market. Excellent management. Reserve life is about 9 years and the quality of the assets is excellent. This trust always focus on high working interest and low risk drilling prospects. | 2005-11-11 | |
| HOLD | | Canadian Oil Sands Trust | COS.UN-T | 111.020 | The only pure play in the syncrude oil project. The distribution increase had been factored into the share price and once it was announced, the stock price fell back. The driver to this investment would be energy prices. | 2005-11-11 | |
| HOLD | | BFI Canada Income Fund | BFC.UN-T | 27.600 | A very well managed company. A non-cyclical business of waste management, garbage collection and landfill. Just reported excellent results as usual. Because they have some operations in the US, there may be an opportunity for them to develop a more efficient tax structure. | 2005-11-11 | |
| HOLD | | Gienow Windows & Doors Income Fund | GIF.UN-T | 8.250 | Has benefited from the recent housing boom and all the construction activity in North America. Payout ratio is above 90%. If you believe that the housing sector will be strong, this is a name you can continue to hold. | 2005-11-11 | |
| TOP PICK | | KCP Income Fund | KCP.UN-T | 9.970 | No-name bleach producer. Had to wait for a price increase from their main competition, Chlorox which has now happened twice this year. Have acquired additional businesses which allowed them to pass along raw material costs. | 2005-11-11 | |
| TOP PICK | | Morneau Sobeco Income Fund | MSI.UN-T | 10.400 | One of 3 benefit/pension consultants in Canada. A lot of their revenues are locked into multi-year contracts. There is a constant need for companies to outsource their pension/health benefits programs. | 2005-11-11 | |
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