STOCKCHASE

6.360

(A Top Pick Jan 18/11. Up 8%.) 7.75% bond due 2015. Yielding about 6%. Sold this one and bought a bond maturing in 2018.

2012-01-18

BUY on WEAKNESS

Westshore Terminals Inc.

WTE.UN-T

24.660

Balance sheet is conservative and distribution is completely doable. This is a proxy for China in that they have the terminals where coal is shipped to the far east. Sold his holdings when the price got to this point. Would be interested in the low $20s.

2012-01-18

TOP PICK

Yellow Media Inc

YLO-T

0.200

7.3% bond maturing in 2015. The big issue is, is it a bankrupt company? They still have free cash flow of about $300 million and they know they have to quickly pay down debt. Thinks there's no value in the equity and very little value in the preferreds but there is some decent value in the debt.

2012-01-18

BUY on WEAKNESS

Cineplex Inc

CGX-T

25.120

Had really liked this but exited his position when it reached his point of valuation. Still likes, but would prefer to see it come off a little bit.

2012-01-18

Comment

0.020

Markets. Home builder stocks have gone parabolic, but when you look at the numbers in the US, he believes that there is starting to be some stabilization. They are clearing up a lot of inventory. Probably in the next year to 18 months, US homebuilders will start to build again. US Banks will be the benefit of this.

2012-01-18

BUY

0.020

How risky are BBB bonds such as Calloway (CWT.UN-T) or First Capital (FCR-T)? Credit rating agencies rate rates as BBB’s but the stability and their balance sheets are equivalent to an A, but you get an extra 2% basis points above Canada bonds. He really likes real estate bonds.

2012-01-18

Comment

Telefonica S.A.

TEF-N

17.090

Has underperformed to the euro. It is a big component of Spain's equity market. Brazil and Latin America is about 40% of their cash flow. Growth in Latin America on the telco side is quite large. Dividend is getting closer to where it is hitting the 80%-90% payout but he thinks it is sustainable. Prices starting to look attractive.

2012-01-18

BUY

Bell Aliant

BA-T

27.920

Yield of around 7%, which he thinks is sustainable. Free cash flow of about $500 million. They’re spending a couple of hundred million dollars creating a fibre network to homes in the Atlantic provinces. And they will be taking market share.

2012-01-18

DON'T BUY

Extendicare REIT

EXE.UN-T

8.350

Trades at about 12X AFFO (After Funds from Operations), which is reasonable. The problem is that the payout is about 95%. Of both US and Canadian assets and it is very hard to understand the US regulatory rules. He prefers Leisureworld (LW-T) in this sector, which is all in Ontario and has long-term care facilities with some retirement homes.

2012-01-18

TOP PICK

22.500

They acquire underperforming apartment buildings in Alberta. They reposition CapX into apartments and re-rent them out. Management is internalized and they own 30% of the company. Probably worth closer to $32-$35. Very cheap. Get their funding from CMHC which is the cheapest way to do it.

2012-01-18

TOP PICK

0.930

(A Top Pick Jan 18/11. Up 12.98%.) Diversified into office and retail. Focused in Québec. Healthy 8.5% yield. Now have liquidity so will be saving a lot of interest expense. The rate at 11X AFFO, which is not unreasonable. Could be a takeout target.

2012-01-18

Comment

American Capital Agency

AGNC-Q

28.440

19.6% dividend yield. Currently trading at $28.44 with a 52 week high of $30.76. Is this a good buy when it is so close to its high? This is a mortgage-backed security and is backed by the US government. Their spread is very juicy.

2012-01-18

BUY

Cominar Real Estate Inv Tr

10.290

(He owns the convertible debentures on this.) He likes it as a debt holder as they have a very good balance sheet. Had a real misstep in Alberta and went through a lot of cost overruns. Management has now cleaned up their bidding process and they have a full order book. Expect there will be some outperformance over the next 3-4 years.

2011-12-05

BUY

CUF.UN-T

22.350

Making a hostile bid for Canmarc (CMQ.UN-T). Have really great property assets in Québec. Only trading at about 12X price to AFFO. Not over levered. Yield of about 6%. Stable properties and have access to capital. You'll probably earn 6% plus 6.7% in capital gains next year.

2011-12-05

TOP PICK

First Capital Realty

FCR-T

17.190

5.36% bond. Great managers. Real Estate bonds are rated BBB, which is still investment grade but you get 250 basis points over Government of Canada’s. Real estate bonds are less volatile than almost any other bonds out there.

2011-12-05

TOP PICK

5.560

8% bonds due 2017. Biggest project is in Madagascar where they had cost over runs. Because of its Cuban assets is rated a non-investment grade bond but with their fundamentals it should trade as an A low bond. Great managers.

2011-12-05

TOP PICK

Yellow Media Inc

YLO-T

0.220

7.3% bonds due 2015. Dislikes the company but their bonds are trading $.50 on the dollar. This company still makes money and has a positive EBITDA and positive free cash flow. Thinks they will survive but if they don’t, the bonds have first call on their business.

2011-12-05

Comment

0.020

High-yield bonds as purchased through ETF's? These tend to focus in the US because high-yield in Canada is lacking. US high-yield gives you a certain amount of high volatility. Also watch for foreign exchange issues. A higher Cdn$ could impact your investment. You have to watch out for the fees.

2011-12-05

Comment

Crombie Real Estate Investment Trust

0.020

Tax implication on large-cap US dividend stocks? 1st of all, you have to deal with the Cdn$ and if it gets stronger your investment will get weaker. There is a US 15% withholding tax on your dividends even if it’s in an RRSP, which you don't get back. This is a small negative of the big puzzle.(There has been a question on the 15%, so check with your advisor on this.)

2011-12-05

BUY

CRR.UN-T

13.300

This is a unique story in the real estate space. 35% of their real estate exposure is tied to Sobey’s Empire. When they develop properties, they develop with a partnership with Empire. With shipbuilding coming through Irvings, it will be heavily concentrated in New Brunswick and Nova Scotia for the Eastern markets. This will help them over the next 3-4 years.

2011-12-05

PAST TOP PICK

Bell Aliant

BA-T

28.000

(A Top Pick Nov 1/10. Up 6%.) 4.37% 09/13/2017 Bonds.

2011-12-05

BUY

Brookfield Asset Management (A)

BAM.A-T

28.380

A fantastic holding company that has a tremendous amount of value. Numbers came out a little light from what that street expected. One of the world global managers that tend to do the right things. Trading below NAV.

2011-12-05

PAST TOP PICK

Annaly Capital Management Inc.

0.880

(A Top Pick Nov 1/10. Up 27.78%.)

2011-12-05

Comment

NLY-N

16.270

Curious where this sector is going with the Freddie Mac's and Fannie Mae's mortgage REITs and the TWIST program? Federal reserve, instead of doing quantitative easing decided to lend short term and buy long-term to flatten the yield curve. Doesn't necessarily hurt or help this company. Did very well in last year's environment because short-term rates are very low and long-term rates are very high. If you believe the US housing market is going to stabilize (flat line or go up slightly) this company will probably outperform.

2011-12-05

PAST TOP PICK

BMO Covered Call Utilities ETF

10.900

(A Top Pick Nov 1/10. Up 15.23%.)

2011-12-05

DON'T BUY

ZWU-T

15.030

Covered Call Utilities ETF. Covered Call strategy is very popular these days but is getting crowded. Basically it says that if the market trades sideways and with all the volatility in the market, can you not make money off that volatility. To do this they go long the stock but write covered calls against it. You underperform if the market goes really down or goes really up. Over the next 2-3 years we should see a better equity market.

2011-12-05

SELL

InnVest Reit

INN.UN-T

4.480

Hotel properties. Has had so many problems in the last 5 years. Economic recovery is slow, but more important, tourism into Canada is getting new multiyear lows. They also have to upgrade their properties. Just cut the dividend by 20%.

2011-11-16

BUY

Inter Pipeline Fund

IPL.UN-T

18.500

Plugged into the oil sands and you don't have to think too much with this one. You have a good asset and really good demand. With Keystone being laid, it will be filled with oil.

2011-11-16

BUY

Manitoba Telecom Services

MBT-T

28.460

Had issues last 5-6 years. Weaker numbers last quarter. Overpaid for Allstream assets 5-6 years ago. These assets are now starting to turn around and add to the bottom line. Now connected to fibre. Still not the best in class but expect it could trade up into the low $30's in the next 6 months or so.

2011-11-16

WEAK BUY

45.100

For a long-term hold? Cdn banks trade globally at a premium to BV. Will be reporting very soon and he expects some weak trading numbers. They are now trying to make an international impact on the wealth management side of the business. Don't look for much growth over the next year. Expect dividends will be raised.

2011-11-16

DON'T BUY

Sunlife Financial

SLF-T

20.710

Yield of about 7% and the market is kind of calling for a cut. He doesn't think they will. The environment is so bad for them because interest rates were not supposed to stay this low for so long.

2011-11-16

TOP PICK

5.450

8% bonds. Rated a noninvestment grade bond but tremendous value. That leverages is small.

2011-11-16

DON'T BUY

Transalta Corp

TA-T

21.400

Utilities do not have the volatility of pipelines. (He owns the bonds and is quite comfortable with it.) They want to maintain a 30% market share in Alberta but they always have to deal with shutdowns and expect there will be some next year. Have to spend a ton of CapX on their plants in 2012. Prefers others such as Enbridge (ENB-T).

2011-11-16

TOP PICK

Yellow Media Inc

YLO-T

0.255

7.3% bonds. Trading at $.50 to the dollar but should be closer to $.80. Disliked this company for 6 years but bonds are ahead of the equity and preferred holders. Still have positive free cash flow. Make about $500 million of EBITDA. They are forced to pay down debt in order to survive. Even if they go into receivership, the bonds should get their money.

2011-11-16

PAST TOP PICK

Bell Aliant

BA-T

27.390

(A Top Pick Nov 1/10. Up 8%.) Bell Aliant 4.37% 09/13/2017 Bonds.

2011-11-16

TOP PICK

18.650

Own a lot of assets out West. Own apartment buildings and they buy “Ma and Pa” 3-4 story apartment buildings and renovate them. Get tremendous growth in their net operating income. Trades at a discount to NAV of about 25%. Wouldn’t be surprised to see it at $25 by end of 2012. Management owns 20% of outstanding shares.

2011-11-16

PAST TOP PICK

0.880

(A Top Pick Nov 1/10. Up 25.38%.) Small cap commercial real estate trust, focused mostly in Québec. Properties are decent and management is okay. Trades at a discount to NAV. Numbers just came out and they were decent. Probably worth about $1.20. Distribution is sustainable at 9%.

2011-11-16

PAST TOP PICK

H&R Real Estate Inv Trust

10.640

(A Top Pick Nov 1/10. Up 12.76%.)

2011-11-16

DON'T BUY

Bank of Nova Scotia

BNS-T

52.830

One of few that have not raise dividend. Exposure to Latin and South America. Got hurt by last 6 weeks. Only met numbers when TD beat them. Prefers RY to BNS and TD to RT.

2011-10-11

WEAK BUY

HR.UN-T

19.950

Excellent managers. Stock price has fallen more than rest of sector. More with development side so there is a feeling you will see some softness.

2011-10-11

BUY

Parkland Fuel Corp

PKI-T

9.230

Dividend is sustainable (80%). Suffered recently. Largest independent gas marking firm. Own gas stations. 10% of all outstanding gas stations. Margins are stable. Hiccup because market fell. Some value and stability there and continue to pay out the 11% dividend.

2011-10-11

WAIT

47.950

A main pick. Likes because of stability of retail network. Can grow by acquisitions. A great margin business. He wants to see the growth strategy. TD has grown rates of return through the US. Wonders what their strategy is outside of Canada. Prefers TD.

2011-10-11

WAIT

Sunlife Financial

SLF-T

25.500

Not a core position. Insurance side is incredibly difficult. This is better than MFC. Perfect storm of low interest rates and the equity market has really been side swiped. They’ve all done a good job of hedging. Done a good job of cost cutting and grown bottom line in this difficult environment. If we see a move up in interest rates and see stabilization in equity market we could see it get a double bang. But he prefers banks.

2011-10-11

PAST TOP PICK

4.840

(Top Pick Sep 1/10, Up 4%) 7.75% bonds maturing October 2015. He will do equity like return in a bond.

2011-10-11

DON'T BUY

Transalta Corp

TA-T

23.110

Owns the bonds. Did break out but from a fundamental perspective it is s lifted because of the interest rates. They are closing down a power plant and that could be expensive. Not his favourite utility.

2011-10-11

PAST TOP PICK

Killam Properties Inc

KMP-T

10.310

(Top Pick Sep 1/10, Up 16.93%) A theme4 from a year ago. Great defensive. Stability and as rates get lower they funding gets cheaper. Doesn’t know when he will transition out of it.

2011-10-11

N/A

0.020

There is so much volatility in the global markets. Look through the noise. The non-farm payroll numbers showed some nice stability but some growth. There had to be some follow through bullishness on that news. Europeans are acting vs. reacting but market is pricing in a default so it is not a factor. Numbers out of Europe are not that bad. Seasonally the next two months are usually a rally in the market. Sees a bit of a recovery and a movement upwards. Dividend paying and utilities/REITs have done so well. They are almost a safe haven. He is more neutral on REITs now because they have done so well. Thinks there will be a sector shift out of the interest sensitive stuff.

2011-10-11

TOP PICK

0.020

First Capital reality 5.34% 2013. Extra 2.5 points above Gov’t of Canada. Very good at executing and developing own properties. Investment grade bond. It is hard to find value in the bond market.

2011-10-11

BUY

Telefonica S.A.

TEF-N

20.510

Spanish Telco. Likes that the main revenue growth is out of Latin America. So as EU spins out of control 40% of revenue is Latin America. When you are shorting the EU market, this is one of the largest market cap in the EU. The dividend is safe and there is capacity to grow.

2011-10-11

DON'T BUY

Extendicare REIT

EXE.UN-T

6.890

Doesn’t own as a main position because you are dealing with the US retirement market and the regulations. 10% decrease in funding. Hard to understand balance sheet, properties and the US. Not sure if payout is safe, but it is still a viable entity. Shies away from it because of transparency of business plan.

2011-10-11

TOP PICK

16.990

Good management. 30% of management-owned shares. Renovate and reposition apartment buildings in Alberta. CMHC financing. Beat estimates last time aggressively. No destitution. Management adds value to properties.

2011-10-11

TOP PICK

Artis Real Estate Investment Trust

0.790

Trades at a cheap level to net asset value. Own properties in Quebec and Ottawa. Light industrial. Cut distribution twice in dark days. Sustainable distribution and liquidity now.

2011-10-11

BUY

AX.UN-T

12.320

He likes the company and the management. Office and retail out west. Starting to get into US. It is at the right price point. Dividend is aggressive, payout more than they make, but they are working through that. You are going to get the dividend bit that is about it. Not too over levered. Likes it.

2011-10-11

HOLD

Visa Inc.

V-N

90.510

It is so expensive from a valuation perspective, but you can’t deny the consistency of the model. He is a value player and it is hard to engage in this because of the price. It’s still a great company. Don’t add to it.

2011-10-11

DON'T BUY

Claymore 1-5 yr Ladder Corp Bond ETF

CBO-T

20.370

Yield curve is so flat between 2 and 20 years. You don’t get that much yield by going up the ladder. It is hard to get excited about the bond market. If you don’t expect much, credit markets give you more bang for your dollar.

2011-10-11

PAST TOP PICK

BMO HighYield Corp Bond US Hedge to CAD ETF

10.530

(Top Pick Sep 1/10, 16.00%) Unlike competitors, it is Ontario only retirement and nursing homes. Funding formula with province is much more understandable. Cheap financing and demographics work. Election out of the way could put upward pressure on pricing.

2011-10-11

SELL ON STRENGTH

ZHY-T

14.270

US corporate bonds. In 2009 high yield bonds were decimated. We had a bit of a hiccup. It is still hard to find value in the high yield market. Dividend paying companies are less risky. High yield is littered with really bad credits, unlike 3 years ago when there was a run on liquidity.

2011-10-11

TOP PICK

8.020

7% bonds due 2014. Pristine balance sheet. Almost have no debt. Not looking to have it converted into equity.

2011-09-08

DON'T BUY

BCE Inc.

BCE-T

38.800

6.46% strip bonds expiring May 2042? Normally he does not give money longer than 7 years because the business cycle is 3-4 years. You not getting paid enough to extend that far out. He owns 2016 bonds.

2011-09-08

BUY

Keyera Corp

KEY-T

45.930

Natural gas processor and its byproducts. They are in a very good spot. Feels there is even more room even though it has hit 52-week highs. They benefit from a low natural gas price and the byproducts. Could see $55 in the next 1-1.5 years. Yield of 4.2%.

2011-09-08

Comment

48.920

Last couple of earnings reports have disappointed the street. Trade at around 2X book. US strategy has failed. Have been impacted by being a beta for the global market. Doesn't expect it will do anything for the next 6 months. Needs the global markets to recover. This is a 2012-2013 story. (See Top Picks.)

2011-09-08

PAST TOP PICK

5.170

(A Top Pick Sept 1/10. Up 7%.) 7.75% bonds maturing October 2015.

2011-09-08

BUY

Toronto Dominion

TD-T

76.310

Has the wind at its back that not only does it have the capital, but their strategy is being deployed (being accretive in the US). Dividends will go up, but probably not for the next 2 quarters.

2011-09-08

HOLD

Thomson Reuters Corp

TRI-T

29.010

Really interesting at this point. Their business has not fallen that drastically. They are a beta for the financial markets and specifically track the bank indexes. Their financial products are highly sensitive to a cut in spending for a lot of the banks. However, they also have legal, medical and marketing data. Trading at 5X EBITDA versus their normal 7X.

2011-09-08

PAST TOP PICK

Killam Properties Inc

KMP-T

10.670

(A Top Pick Sept 1/10. Up 21.43%.)

2011-09-08

Comment

0.020

S&P 500 dividend yields have recently moved above the 10-year bond yields. Very significant and is telling you that if you can stand the volatility, you have to at least consider equities as being overly cheap. If you extend back and look at where earnings yield is, it hasn't been this high in 20-30 years. When you are buying companies, you are buying their earnings power. You should consider large-cap dividend stocks, those with reasonable balance sheets.

2011-09-08

BUY

Hudbay Minerals Inc.

HBM-T

12.290

Likes that it trades very cheap on a cash flow basis. Their copper assets and the new mines that are going into production will really add to the bottom line.

2011-09-08

TOP PICK

17.400

Purchase and refurbish old apartment buildings in Alberta where vacancy rates are dropping. Starting to get some pricing power. Really cheap on NAV value. Don't pay out anything but use their free cash flow to continue growing the bottom line. Management owns 30% of outstanding stock.

2011-09-08

TOP PICK

10.430

(A Top Pick Sept 1/10. Up 12.37%.) Senior care is a really complicated space. This one is so much each year because it has all its retirement/nursing facilities in Ontario. Getting into more higher end real estate and are getting CMHC financing..

2011-09-08

TOP PICK

Canadian Imperial Bank of Commerce

8.080

7% Convertible Bond due 2014. This is almost like a guarantee, because there is little to no debt on their balance sheet. If the stock recovers and goes up, this is convertible.

2011-08-10

TOP PICK

Bank of America

BAC-N

6.770

Believes you either price that for bankruptcy or for the next cycle and is probably worth $25. He believes the housing market is stabilizing. 5 of their 6 businesses are making money. Trades at half its BV. Doesn't have that much fear of the current lawsuits.

2011-08-10

DON'T BUY

CM-T

71.150

Canadian banks have done a brilliant job of not losing money. Trading at a premium at 2X BV and doesn't know if they have much more room. This one trades at a higher BV so he prefers Toronto Dominion (TD-T) and Royal (RY-T).

2011-08-10

BUY

First Capital Realty

FCR-T

15.570

Well-managed company. Anchors are Shoppers (SC-T) and Loblaws (L-T). Great executers of strategy. Reasonable at 13X AFFO. Doing more green developments.

2011-08-10

BUY

Imperial Oil

IMO-T

39.020

They make tremendous return on equity on their projects. Alberta project is on line and is doing well. Good buying opportunity.

2011-08-10

SELL

Manulife Financial

MFC-T

12.500

Held this for a long time but finally sold it recently. Equity risks are now being covered because they are now putting on more hedging. The big drop in bond yields has hurt insurance companies. Dynamics are poor.

2011-08-10

Comment

49.730

Convertible preferred? He would be kind of negative on preferreds. This bank is “best in class” along with Toronto dominion (TD-T). Got out of the US retail and are now focusing on wealth management. Not a bad time for purchase of the common shares.

2011-08-10

BUY

Shoppers Drug Mart Corp

SC-T

37.970

Hasn't like this one for 4 or 5 years. Got cheaper with the Ontario rule changes and is looking better. Front store sales are really doing well. And be surprised to see it in the mid-$40's in the next 8-12 months.

2011-08-10

PAST TOP PICK

Chartwell Seniors housing

4.920

(A Top Pick Sept 1/10. Up 9%.) 7.75% bonds maturing October 2015. Pristine balance sheet. Sold out recently because a yield was getting close to 5.5% but put some of the cash into the stock.

2011-08-10

SELL

Thomson Reuters Corp

TRI-T

30.050

Into law information, market information and healthcare information. These are the first things that are cut in a struggling economy. Have struggled since acquiring writers. Trading at 20X earnings.

2011-08-10

BUY

Telus Corp

T-T

51.580

One of the “best in class”. Competition telcos feared has impacted them a little bit but they benefiting from the changeover to data, which is now the growth engine. Telcos will be in better shape than cable because they are coming out with the fiber TV.

2011-08-10

PAST TOP PICK

Killam Properties Inc

KMP-T

10.010

(A Top Pick Sept 1/10. Up 13.15%.) A safe way to play real estate. Occupancy levels are pretty high.

2011-08-10

BUY

CSH.UN-T

7.040

Operations have turned around nicely over the last couple of years. Cheap. He might look at this for himself in the next couple of months.

2011-08-10

Comment

Brookfield Asset Management (A)

0.020

Market. Investors have to remember this is the summer and there is probably buyer exhaustion. A real case could be made that this is just an overreaction and a very large correction. Currently buying companies with pristine balance sheets. Continues to like earnings yield, which is earnings over price, as opposed to PE. Big divergence between Earnings Yield and Bond Yield.

2011-08-10

Comment

Whiterock REIT

WRK.UN-T

11.650

Recently sold a large part of his holdings. Bothers him that CEO’s compensation is based on growth rather than profitability. Also making more acquisitions outside of Canada and hopes they can transition these into accretive acquisitions. Doesn't expect much growth.

2011-08-10

BUY

BAM.A-T

28.150

Best in class asset managers. You can sleep at nights if you own this one. So well financed and so good at what they do, that they can go global and analyze opportunities.

2011-08-10

DON'T BUY

Extendicare REIT

EXE.UN-T

7.830

US regulatory body dropped retirement home funding by 12%, which hurt the stock. It will be hard for them to go up in value. Prefers Leisure World (LW-T), where provincial regulations are much simpler to understand.

2011-08-10

TOP PICK

Artis Real Estate Investment Trust

17.420

Real estate company that focuses on apartments in Alberta. Great at transitioning old apartment buildings. Recently blew away numbers. Management owns 30% of the float. Trades at a discount to its NAV. $23 over the next 6 months.

2011-08-10

BUY

AX.UN-T

12.670

Office and retail space, mainly out West. Great management. Likes their acquisition strategy in Minnesota. Have come off and this is a great buying opportunity. Yield of about 8.5%.

2011-08-10

Comment

Pure Industrial Real Estatetrust Trust

AAR.UN-X

3.950

Focuses on industrial property space. Very efficient at picking up good yielding properties. Have tons of capital that they can access. Bringing their external management in-house. 7.7% yield.

2011-08-10

PAST TOP PICK

10.050

(A Top Pick Sept 1/10. Up 10.19%.) Still likes. Fantastic company with a conservative capital balance sheet. Room for it to grow.

2011-08-10

PAST TOP PICK