Paul Gardner is Partner & Portfolio Manager with Avenue Investment Management. His focus is fixed income, large cap dividend paying stocks & REITs.
Mainstreet Equity The company is meeting and exceeding all its profitability and revenue numbers. It still is expanding its portfolio that focuses on Alberta and Saskatchewan low rise apartment properties. It trades at a significant discount to its NAV
Sherritt 8 per cent 2018 bond Company’s bond is a considered high yield but its balance sheet is stable but has investment grade credit metrics. The Madagascar mine is near completion and operations will start up shortly. This will help with overall cash flow of the company. The bond still yields high in this low rate environment that we live in.
Davis and Henderson The company is well known for its cheque printing business which is now only 40 per cent of overall revenue. The company has expanded into Loan and registration services in Canada and US. Stable business with conservative payout structure. 7.0 per cent dividend
Then: $37.98 Now: $41.03 Total return: +13.90%
Then: $0.92 Now: $0.92 Total return: +9.45%
RioCan 4.499% 2016 bond
Total Return Average: +10.8 per cent
We see two diverging themes occurring in the global markets. North and South America continue to outperform economically due to employment growth and its relatively healthier consumer. U.S. housing seems to have stabilized. On the other side of the globe, we see the EURO sponsored countries crumbling due to its lack of will to commit to its very unpopular austerity programs. Equity market valuations are reasonable and should track quietly upwards from current levels. Bond yields in Canada are very expensive. We expect a small rise in interest rates over the next few quarters. Theme is still in place, interest rates will stay relatively low for the foreseeable future due to global deleveraging and its access to labour worldwide.
Compiled by Franklin Cameron/BNN Market Call Tonight
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