STOCKCHASE

37.400

Competition is fierce but they are still increasing revenue per unit because of the smart phones, television. Buckets of free cash flow.

2010-07-26

PAST TOP PICK

19.700

(A Top Pick Aug 12/09. Up 21.5%.) Still likes.

2010-07-26

PAST TOP PICK

Sherritt International Corp.

40.700

(A Top Pick Aug 12/09. Up 24.49%.) Still likes.

2010-07-26

PAST TOP PICK

S-T

7.130

(A Top Pick Aug 12/09. Up 7.75%.) 7.75% bonds maturing October 2015. Still likes.

2010-07-26

WEAK BUY

Toronto Dominion

TD-T

72.920

Deploys capital very efficiently. Big risks going forward would be expansion in the US but have such a dynamic retail business he is not concerned. Expect a normalized rate of return of dividend plus 5%.

2010-07-26

Comment

Northwest Healthcare Property REIT

NWH.UN-T

11.170

Focused on medical buildings, which are boring, defensive properties but are rented out to about 75% of government services. Recently did an IPO and the risk is management might have underestimated their “General and administrative” costs. 7.1% yield. Just recently sold his holdings in order to move money to another story.

2010-07-26

SELL

Manitoba Telecom Services

MBT-T

28.250

Not participated in the massive rally we had. Allstream asset is bleeding them. Also have pension issues. A real risk of a distribution cut.

2010-07-26

BUY

RioCan Real Estate Investment

11.710

Basically a Western play and own retail, commercial and industrial. Very good at what they do. Biggest problem with their distribution was a little too high but are starting to grow into it. Attractive yield a 9.2%.

2010-07-26

BUY

Westshore Terminals Inc.

WTE.UN-T

18.720

Westshore Terminals (WTE.UN-T) or RioCan Real Estate (REI.UN-T)? A throughput for coal from Vancouver to Asia. He prefers this one that is not susceptible to volatility of coal with a conservative payout ratio.

2010-07-26

Comment

REI.UN-T

19.990

Westshore Terminals (WTE.UN-T) or RioCan Real Estate (REI.UN-T)? Strip malls and biggest public real estate firm. Prefers Westshore as it is not susceptible to volatility of coal and the payout ratio is very conservative. Payout ratio on this is about 110%.

2010-07-26

HOLD

Royal Bank

RY-T

52.450

Missed their numbers last quarter so stock had a dip. Trying to make a push into a global banking entity by going into the US, which could have some execution risks but a brand name that is respected globally. Will probably go up 5%-10% over the next 12 months. You could Buy for the long-term.

2010-07-26

DON'T BUY

Yellow Pages Income Fund

YLO.UN-T

5.890

Had problems with a poor balance sheet and an execution strategy. Hit hard with the 2006 income trust changes. Now refocusing and re-branding as a service provider to get their name in the Internet. Competition could be fierce.

2010-07-26

TOP PICK

8.280

Stable performer. Focuses on apartment buildings and manufactured housing, mostly out east. Get CMHC financing so that when interest rates drop they get better financing. 6.75% dividend.

2010-05-28

TOP PICK

Manulife Financial

MFC-T

17.580

Did a ton of equity and debt issues so it was diluted over the last couple of years. Capital ratio (for insurance companies) is about 250%, really high. Have a growth profile in Asia. Really cheap at less than 1X Book. Looking for $30 in 2 years.

2010-05-28

TOP PICK

30.670

Great management and are cutting costs, which are dropping to the profit line. Beat estimates. Wireless growth is decent. Olympics sponsorship really helped their wireless line. A free cash flow machine. Good yield.

2010-05-28

HOLD

Yellow Pages Income Fund

YLO.UN-T

6.260

Not been a fan of this for years but now taking a hard look. Not sure if it will grow into its share price. Migrating over to small/medium businesses and margins will be good on this. Doesn't have the competitive advantage anymore. Trading at around 7X EBITDA but should be at around 6. Thinks 12.75% yield is sustainable.

2010-05-28

DON'T BUY

Dundee REIT

D.UN-T

24.220

Q1 results came in all right. Beat estimates by $.01. Not fans of this one as their Alberta properties are sub-properties and are about to have a 10%-20% vacancy rate. (Trying to diversify out of Alberta.)

2010-05-28

BUY

First Capital Realty

FCR-T

14.150

Really good management. Properties are recession resistant with a lot of Shoppers (SC-T) and grocery stores. Appropriate one to hold during either up cycles or down cycles.

2010-05-28

BUY

Extendicare REIT

EXE.UN-T

9.100

Nursing homes in the US and Canada. A REIT but is taxable. Balance sheet has improved from a year ago. Beat estimates last quarter. Cheap compared to peers.

2010-05-28

PAST TOP PICK

39.840

(A Top Pick May 4/09. Up 39.57%.) Still likes.

2010-05-28

PAST TOP PICK

Leon's Furniture

LNF-T

12.110

(A Top Pick May 4/09. Up 32.22%.) Still likes.

2010-05-28

PAST TOP PICK

0.020

(A Top Pick May 4/09. N/A.) Long term real estate bonds: E.g. Riocan, First Capital. Really cheap last year but not so cheap now.

2010-05-28

BUY

Calloway REIT

CWT.UN-T

20.330

Outdoor strip malls/retail facilities. Wal-Mart (WMT-N) is their biggest anchor. Has recovered nicely from the credit crisis. Has some room to grow. 7% distribution is safe but probably will not grow.

2010-05-28

BUY

19.810

Payout ratio of only 60%. Will convert to a corporation. 3-D entrenched in movie theatres has helped their bottom line. Good solid management. About to move over to digital projection, which will take a couple of years. This will increase their margins and allow more flexibility. 7% yield.

2010-05-28

Comment

Whiterock REIT

WRK.UN-T

14.090

Over distribute over their AFFO (Adjusted Funds from Operations). Leverage is higher than industry standard. Good properties. Management is on target and appropriately aggressive. Will have to issue more equity or buy more properties to get the 12% distribution on side.

2010-05-28

BUY

H&R Real Estate Inv Trust

8.270

REIT focuses on apartment buildings and mobile homes out east and in Ontario. Raise $50 million on an equity issue, which is slightly dilutive. This will go towards future purchases and will be accretive to the bottom line.

2010-04-01

Comment

HR.UN-T

16.870

Debentures. Well managed company with exposure to large office complexes and geographically diversified. REITs will benefit as income trusts have to convert to corporations and people are looking for yield.

2010-04-01

BUY

Brookfield Asset Management (A)

BAM.A-T

26.000

One of the premier Canadian companies. Active managers. They own Brookfield Properties (BPO-N) as well as infrastructure projects. Relatively cheap. Really good growth profile. Have capital that they can deploy anywhere globally.

2010-04-01

N/A

Canadian Imperial Bank of Commerce

0.020

We are going to wait a long time for the US to raise rates (9 months to a year). The problem is the economy. 10% unemployment. There is a massive de-leveraging going on in the world. A lot of people with credit card debt are just paying down debt. A long, slow, grinding ride. There is going to be growth because inventories are low. There is a risk we see in China and India. They were building inventory on commodities. Even emerging markets are going to have a tough time.

2010-02-24

SELL

CM-T

67.820

CIBC 9% bond. Last February bonds were the place to be. It was crazy. There are not enough reasons to sell this bond now, but there are not enough reasons to buy. There may be opportunities elsewhere.

2010-02-24

SELL

Dundee REIT

D.UN-T

25.650

Trades at 1.3 times net asset value. Still does not like the story. Large exposure to the Calgary second tier real estate market – 20-30% vacancy and climbing. Way over valued.

2010-02-24

Comment

Brookfield Properties

BPO-T

14.260

Rumor about BPO turning into a REIT. They are well capitalized. They bet their numbers last quarter. REITs are the only tax efficient structure left after income trusts end. It would make a lot of sense to turn BPO into a REIT.

2010-02-24

PAST TOP PICK

38.720

(Top Pick Feb 19/09, Up 53%) Did well. It was a great way to participate in a defensive way on the REITs. Still a top pick.

2010-02-24

HOLD

11.500

Mix of office, industrial and retail. Market overreacted over the last year or two. Own it in a mutual fund he manages. Just took a little profit on it. Thinks they will deliver in the end. They are still going to grow.

2010-02-24

DON'T BUY

Bank of Nova Scotia

BNS-T

47.220

Never owned it. Return on equity is better on TD and Royal. There is that out there situation with Latin America with BNS. You want to be in BNS when the market is low. Surprised if we see stellar returns from banks. They are being very aggressive in the US.

2010-02-24

Comment

RioCan Real Estate Investment

0.020

Preferreds trade on their own dynamic. There are different kinds. When you have a negative market and liquidity dries up a bit, preferreds may under perform.

2010-02-24

DON'T BUY

REI.UN-T

18.890

Largest real estate company in the space. They are now going into the US, which he has a problem with. You have to make sure their execution is perfect. They are still over distributing (~110%). They are vulnerable. They probably wont cut the distribution, but they wont grow it.

2010-02-24

HOLD

Home Capital Group

HCG-T

41.140

He is mad because he saw it and looked at it and missed it. Last year would have been a great time to get into this story. It is the sub-prime market in Canada. Their earnings didn’t drop. Now it is expensive. The sub-prime market will probably deteriorate, although not as much as in the US.

2010-02-24

DON'T BUY

Suncor Energy Inc

SU-T

30.700

Acquisition didn’t work. They had operational problems with their oil sands development. Now they bought Petro Canada, which was an unfocused, crappy company. They took it in and now they are this behemoth. Now you are not going to have any idea for 3 years how it has turned out. He prefers Imperial Oil, CNQ.

2010-02-24

TOP PICK

38.720

Great way to play the REIT market. Not a great REIT but you can sleep at night. Management is fantastic. Management owns 25% of the stock. Beat their numbers last quarter. 2011/12 just adds to this story. They have 300 Million on their balance sheet that they have to deploy or buy back stock with.

2010-02-24

TOP PICK

General Electric

GE-N

16.120

10/22/2037 5.73% Bond – distressed bond, but double A rated. Trades cheaply. It’s a long bond. The credit is giving you 200 basis points over the government of Canada. They are de-leveraging their balance sheet. It’s a global company and they are well diversified.

2010-02-24

TOP PICK

Sherritt International Corp.

18.900

You can sleep at night. This company keeps going up in down markets. They are recession resistant. Will stay as an income trust going forward because they have a lot of tax deductions.

2010-02-24

PAST TOP PICK

S-T

6.910

(Top Pick Feb 19/09, Up 35%) The place to be was the distressed bond market. The debt profile of Sherritt was not over leveraged. Fantastic balance sheet. If you stripped out Cuba, it more than covered any debt issues out there.

2010-02-24

PAST TOP PICK

34.250

(Top Pick Feb 19/09, Up 10%) Hasn’t done much. It has so much free cash flow and the ability to raise dividends, which it just did. Despite the wireless competition, the ability to buy back stock and to grow appeals to him. A great yield in this environment.

2010-02-24

DON'T BUY

Thomson Reuters Corp

TRI-T

36.380

Execution was fine. It was a fantastic, blue chip company. With the Reuters acquisition it is that much more powerful. It’s valuation he has an issue with.

2010-02-24

TOP PICK

Manulife Financial

MFC-T

20.790

Market was angry with them because of the new issue but he thinks of it as a transitional event where it changes the fundamentals. Well capitalized now and have money for acquisitions. Trading at only 10X earnings.

2010-01-08

TOP PICK

Bank of America

BAC-N

16.780

Been in and out of this one during the whole nightmare and has done well. Thinks it is now truly the Bank of America. Well capitalized. Losses are slowing down and mitigating.

2010-01-08

TOP PICK

8.350

Manufactured housing focused mainly in the east. Very good management. Healthy 7.5% yield. When they need to borrow, they can use CMHC rates.

2010-01-08

BUY

Toronto Dominion

TD-T

63.730

Bonds. Government of Canada and bank bond rate differentials have come in considerably so they are not as good value as they were but they are good bonds and you can sleep at nights.

2010-01-08

BUY

Canadian Apartment Properties

11.250

Just did a new issue so they are beefing up their acquisition and balance sheet. Well diversified in office, commercial and retail in the West. Concentrating on lowering their Alberta exposure. Excellent management.

2010-01-08

BUY

Bell Aliant

BA.UN-T

27.940

Eastern landlines. Conservative balance sheet. Not a huge growth profile. Bell (BCE-T) is a majority shareholder and there is always talk of a takeover. Owns the debt but not the trust. Yield is compelling so wouldn't be surprised to see upper pressure on price.

2010-01-08

BUY

Bank of Nova Scotia

BNS-T

47.460

Prefers Royal (RY-T) and TD (TD-T) because of their vibrant retail networks and hesitates on Latin America exposure. However, this is well run bank and well capitalized. Expects dividend increases out of all the banks in the 2nd or 3rd quarter.

2010-01-08

BUY

Transalta Corp

TA-T

23.360

Are the bonds a safe investment? Credit profile weakened slightly because they acquired Canadian Hydro and issued a fair amount of debt. Debt to capital was at 52% but is now 57% but hopefully will come down in 2011. Acquisition gave them newer and greener assets. Still an investment grade bond and he likes it.

2010-01-08

SELL

CAR.UN-T

14.380

Doesn't like this one. Prefers Boardwalk (BEI.UN-T) and Killam (KMP-T). Even though it has recovered from its lows, you are still dealing with the GTA and it's over supply of rental space. Also balance sheet concerns. (See Top Picks.)

2010-01-08

Comment

0.020

“Principal Protection Notes” structure has always been a problem. Transparency is so poor that you never seem to win on them. You can construct your own without paying management fees by buying a 10-year residual bond at a discount. E.g. $.80 on the $1 and with the $.20 you buy the underlying security. If your investment goes to zero, your $.80 goes to 100, which is like a principal protection.

2010-01-08

Comment

0.020

REITs. Generally in good shape. The anomaly is that if rates are 2% and REIT rates are 7%-8%, the spread is very high. He feels that REIT yields should come down. After the income trust conversion there are not many tax deferred structures left and REITs will be the last man standing.

2010-01-08

N/A

Sceptre Investment Council Ltd

0.020

The liquidity crisis is over, but is this a deep recession or are we coming out of it. The US consumer and house markets are the big questions. Consumer is cutting down debt and becoming a saver. Black Friday is coming up this week. If you are a retailer, you have been expecting this for 9 months so expect inventory control has been much higher. Inventory levels are close to lows. There will be inventory buildup in early 2010. He is more in the deflation camp than the inflation camp. There is too big a spread between gov't of Canada bonds and dividend paying stocks. These will have to compress.

2009-11-24

BUY

SZ-T

5.450

He did like it and he did get out previously. There is great cash on the books. Generally descent performance. The one negative is that it has a lot of institutional and pension business. The best part of the business is the private client business because of better fees. It’s relatively cheap and a chance there could be a takeover, although he is not sure they are set up for it. He is not interested in this point in time but it probably could go up from here.

2009-11-24

BUY

Brookfield Asset Management (A)

9.840

They like the company. They just started buying it. They recently got their balance sheet in order. They diversified into Winnipeg out of Calgary. He thinks that with a yield of 10.9%, over the next 6-9 months they will probably creep up. They can sustain their distribution and they are good operators. They are not as susceptible to the hot oil economy as one might think.

2009-11-24

BUY

BAM.A-T

22.350

They are fantastic managers. They delve into infrastructure and property management. They are experts at finding hard assets and grinding them to get as much value out of them as possible. They have so much capital to deploy. They highly like this company. A large part of their portfolio is cyclical and would get hurt in a downturn.

2009-11-24

HOLD

Brookfield Properties

BPO-T

12.030

The only risk is that the office side could be weak.

2009-11-24

HOLD

Encana Corp

ECA-T

55.950

A Premier Canadian company. Does not like the idea of splitting their assets. He likes the fact that they have oil and gas. He is going to keep both pieces. You want to own this company for 10 or 20 years.

2009-11-24

N/A

0.020

Most of the REITs will qualify to remain trusts, exceptions are Chartwell, extendicare, hotel properties. Anyone who has more than 5% management fees would not qualify. He thinks there will be a large movement from income trusts into REITs. Those not qualified have already been discounted.

2009-11-24

PAST TOP PICK

0.020

(Top Pick January 13, 2009, Up 21%) GE Capital Funding 5.73% 10/22/2037. There is $10 more in these so he is not cycling out of them.

2009-11-24

PAST TOP PICK

0.020

(Top Pick January 13, 2009, Up131%) Pacific Rubiales CV 8% 08/29/2013. The bonds got distressed and he got an equity-like return on them. Thinks it is at full value.

2009-11-24

PAST TOP PICK

0.020

(Top Pick January 13, 2009, Up 47%) Sherritt 7.7.% 10/15/2015). Fantastic balance sheet, not ever leveraged.

2009-11-24

DON'T BUY

Yellow Pages Income Fund

YLO.UN-T

5.350

He has always disliked them. There was a huge debt problem. Does not like their business model. The advertising revenue that they get is old school. It’s really messy. It’s been depressed for so long that he would not be surprised if they recovered 20-40% but this is not his game.

2009-11-24

HOLD

27.700

Likes Rogers better. But they have stable cash flow, so much free cash flow. Telcos are not a growth story but a dividend story. BCE will have to increase dividends over the years. Wait for another 10-15%. They are under levered.

2009-11-24

BUY

32.030

HSPA is here. It is an overlay on the GSM system. So they can offer the latest blackberries and iPhones. This is priced into the stock. You are going to see margins pop with the iPhones. Cable does well against satellite. They are steeling landlines for home phone from telcos. He likes Rogers better than BCE or Telus.

2009-11-24

DON'T BUY

Dundee REIT

D.UN-T

19.600

He would run from this. Retail clients are pushing yield. They are heavily into lower end buildings in Calgary. Vacancy rate is going to go from 20% to 30%. Rents are forecast to drop. They are fully valued and a good chance that they go lower. Not sure if distribution is sustainable. They wrote this management contract where they didn’t align themselves with the investor. He really doesn’t like this.

2009-11-24

BUY

Manitoba Telecom Services

0.020

Fairfax Financial 7.5% 09-Apr-2019. They are fine from a bond perspective. You don’t have to worry about the bond side.

2009-11-24

BUY

First Capital Realty

FCR-T

19.530

(Market Call Minute) Great Management. Room for cash flow to grow.

2009-11-24

HOLD

MBT-T

31.840

(Market Call Minute) It has free cash flow, but is the weakest of the telcos

2009-11-24

BUY

George Weston Ltd.

WN-T

59.100

(Market Call Minute) Tremendous cash on the books. They really like it.

2009-11-24

TOP PICK

Manulife Financial

MFC-T

18.500

If you are coming into it now, the balance sheet is that much better. Now they can go on and make acquisitions. They are one of the leaders in Asia. Cleaned up their balance sheet. They are still getting priced at levels that are somewhat irrational. Expects 30% return over the next two years.

2009-11-24

TOP PICK

0.020

Sherritt 7.75% 10/15/2015. Not worried about Cuban component. It’s not the largest part of their operation. Even if you wiped out the Cuban and Madagascar assets, then he knows the Saskatchewan assets will cover him. 7% return. Owns the stock in equity portfolio also. Cuba is discounted to nothing but is a great asset base.

2009-11-24

TOP PICK

7.710

If you are going to be in the REITs. They are great managers, mostly out east. They are seeing a net migration because of commodities. They are well capitalized. Get funding through CMHC. Distribution is sustainable and there is a chance it will grow.

2009-11-24

Comment

0.020

Interest rates. Australians raised interest rates but doesn't think Canada will do so for at least 2 years.

2009-10-06

Comment

26.370

Never liked because head winds were so strong over the last 3 years. Used as a proxy for the bonds he holds. Trading at around 10X forward earnings. Just announced they and Telus (T-T) will be starting a new 3G network and selling iPhones & Blackberries, which should be able to help gain market share. (See Top Picks.)

2009-10-06

HOLD

0.020

Greater Toronto Airport Authority bonds. Fantastic business because they charge fees on every airplane that goes out. Highly rated bond but the problem he had was the higher risk for the amount of compensation.

2009-10-06

DON'T BUY

Caterpillar

CAT-N

51.700

Very cyclical. Great company. A lot of global infrastructure projects will benefit them but is already priced in. With the 50% run-up on the market he would want a better price, possibly low $40's. 3.25% yield.

2009-10-06

BUY

9.050

Commercial and industrial real estate in Alberta. Did a convertible debenture so they have funding in place. Not too expensive. Thinks the small-cap space in the rates is poised to outperform.

2009-10-06

DON'T BUY

Biovail Corp.

BVF-T

15.650

Always problematic because you are dealing with a pharmaceutical company that has to fight against generics. These businesses have great free cash flows but there is no growth

2009-10-06

Comment

Research In Motion

RIM-T

70.300

BCE’s announcemed they will be selling iPhones but new RIM’s are coming out, which they will be selling also. This will be good for them.

2009-10-06

TOP PICK

28.050

Good defensive stock but hasn't performed that well because of new entrants coming in but the company is in such great shape financially. A lot of free cash flow. Have 3-year agreements with iPhones and RIM (RIM-T). Cable division is doing well. Would like them to increase their dividends.

2009-10-06

TOP PICK

6.940

Own manufactured homes in eastern provinces and Ontario. They get cheaper CMHC financing so there is no funding issues.

2009-10-06

TOP PICK

0.020

Government of Canada 5.75% bonds maturing 2033. Real opportunity in the bond market is the long end of the yield curve. Curve is going to flatten, which means the long end rallies more than the short end. Real rates are too high in Canada with the Cdn$ going higher and the massive overcapacity globally and this will create deflation.

2009-10-06

PAST TOP PICK

26.370

(A Top Pick Dec 17/08. Up 26%.) Bell Canada Bonds 4.64% maturing 2016.

2009-10-06

PAST TOP PICK

General Electric

GE-N

16.080

(A Top Pick Dec 17/08. Up 20%.) GE Capital Bonds 5.37% maturing in 2037.

2009-10-06

PAST TOP PICK

RioCan Real Estate Investment

38.350

(A Top Pick Dec 17/08. Up 76.12%.)

2009-10-06

Comment

REI.UN-T

17.670

Largest REIT and excellent operators. Growth and distributions based on very vibrant new developments but doesn't think this is part of the distribution growth right now so doesn't know how they're going to increase distributions, which are safe. Very good balance sheet. (He holds debt, not the equity.)

2009-10-06

TOP PICK

16.000

Good balance sheet. 60% payout ratio. Have tax losses for 3 or 4 years beyond 2011. Great management and cash flow. Growing EBITDA. Deploying new technology giving them a greater market share. 7.8% yield.

2009-08-12

TOP PICK

Sherritt International Corp.

34.260

Good balance sheet. Have some much room they are not buying apartments any more but instead are buying back shares. CMHC financing so funding costs are dropping dramatically. There continues to be net migration into Alberta.

2009-08-12

TOP PICK

S-T

6.820

7.75% bonds maturing October 2015. Currently a 9% yield. Balance sheet is under levered at about 30% debt to cap. (The Stock is fully valued.)

2009-08-12

PAST TOP PICK