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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hello 5i,

This is a sector allocation question. Portfolio Analytics indicates I have about 14% allocated to Real Estate and should only have 4%. My 3 real estate holdings are DLR:US, DIR.UN:CA and GRT.UN:CA. Would you suggest selling one of these 3 or trimming a bit from each?

Thanks
Read Answer Asked by ralph on September 19, 2023
Q: Are there any public companies that stand to profit if housing foreclosures in the U.S. significantly increase over the next 3-4 years? Or a suggested investment strategy to play this scenario in public markets?
Thanks
Read Answer Asked by Curtis on September 19, 2023
Q: Interest rates likely peaking and many real estate stocks are trading at discount. I am considering adding to real estate. Would you comment on this thought and suggest a stock and index.
Read Answer Asked by joe on September 13, 2023
Q: One year ago I decided to choose 6 reits ( avoiding shopping centers and offices),+ one professionaly managed reit etf (mentionned above) .The final result is that the managed ETF did loose 15% +,and the 6 "amateur chosen" ETF gained more than 15% ,the choice was based on the "basic observation"of a slowing economy and specific individual REIT performances,I did then favour industrial, data centers and some real estate REITs.Is it normal that a professionaly managed ETF could underperform so much versus personal choices and why? I wonder if I should trust actively managed products on the future,considering the fees etc..,instead of just choosing stocks or ETFs in safe sectors according to observable macro-economic tendancies.
Read Answer Asked by Jean-Yves on September 12, 2023
Q: Hi 5i,
I'm mindful of your answers to recent questions about AP.UN (lukewarm response at best) but I do wonder;
Employers are said to be insisting more and more that employees get up, get showered, get dressed and get in to work at the office.
Pre-pandemic AP.UN was in the $50.00 range, and even in the midst of COVID it didn't drop as low as it is now - presently units are selling for $20 just as they were a decade ago. If it's accurate that working from home is on downslope, is there an upside for AP.UN that's not reflected in its current price - was it worth $50/unit in early 2020, or was that unsustainable even without COVID - and do you see any scenario where it might get back to, say, 2/3rds of its early 2020 value?
And just generally speaking - do you think office REITs are out of the woods if current trends continue (and if interest rates come down over the next year or so)?
Thanks,
Peter
Read Answer Asked by Peter on August 28, 2023
Q: Hello 5i Team

Northview Fund (old ticker NHF.UN) is now trading as the new entity (Northview Residential REIT new ticker NRR.UN) on a post consolidated basis (1.75 NHF.UN = 1.0 NRR.UN).

1 - How does NRR.UN compare against the other Canadian residential reits?

2- Is it buyable or should I wait and see how the market likes it.

3 - Is there financial results available for the consolidated units or do I need to wait for Q3 quarterly results (available late October / early November).

Thanks
Read Answer Asked by Stephen on August 24, 2023
Q: Hi 5i,

I believe in management and the long-term prospects of AP.un, so I want to hold on long-term.

On a couple of conference calls management has indicated there will be a large taxable event for unit holders because of the data center sale. I assume this will be a capital gain which may be a ROC of just a plain taxable capital gain. In any event, would it make sense to sell my units now resulting in a large capital loss and then buy the units back after 30 days. The loss will more than offset any gain the company would declare. If it’s a return on capital, I would use the loss to offset other gains in 2023. Your thoughts would be appreciated.

Do you anticipate much change in the unit price over the next 45 days? What do you think of this REIT long-term (3-5 years)?

Thanks for your opinion.
John
Read Answer Asked by John on August 24, 2023
Q: Hi 5i,
A coupla questions, please deduct accordingly:

1. I've just received the following cautionary analysis regarding DIR.UN, and wonder if you would provide your comments on the points raised. I'm interested in acquiring DIR.UN but am concerned about the stated risks.

Currently, the following risks have been identified for the company (DIR.UN):
Major Risk
• Debt is not well covered by operating cash flow (8.6% operating cash flow to total debt).
Minor Risks
• Dividend is not well covered by earnings (dividend per share is over 12x earnings per share).
• Profit margins are more than 30% lower than last year (63% net profit margin).
• Shareholders have been diluted in the past year (3.1% increase in shares outstanding).


2. Could you also provide your analysis on BTB.UN based on the same criteria as applied to DIR.UN. I owned it years ago and enjoyed the yield, but became convinced it was too risky for my income portfolio. Now, years later, I see that while its unit price hasn't increased much, none of the fears materialized and had I held on it would have supplied decent income during that time. I'm considering re-entering.
Thanks 5i - much appreciated.
Peter
Read Answer Asked by Peter on August 23, 2023
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