canadian tire

RIOCAN REIT $30.05 (Toronto symbol REI.UN; Units outstanding: 315.8 million; Market cap: $9.5 billion; TSINetwork Rating: Average; Dividend yield: 4.7%; www.riocan.com) continues to hit new all-time highs, even with the closure of the Future Shop chain. Electronics retailer Best Buy (New York symbol BBY) recently closed 66 of its 131 Future Shop outlets in Canada and will convert the remaining 65 to Best Buy stores. There are only 10 Future Shops in RioCan’s malls, so these closures and conversions should have little impact on its results. Combined, 32 Best Buy and Future Shop stores rent space from RioCan, accounting for just 1.5% of its 2014 rental revenue....

When you feel the urge to sell a stock that’s been a strong performer, your “itchy trigger finger” could erase bigger gains in the future.

Up 243% since it was Canadian Stock of the Year in 2012, CP Rail continues to reap the rewards of a very successful restructuring plan.

Pat McKeough responds to many requests from members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions.

Q: What is your opinion of the following investment: First Capital Realty? Thanks.

A: First Capital Realty Inc. (symbol FCR on Toronto; www.firstcapitalrealty.ca) owns, develops and operates shopping centres throughout Canada. It focuses on big cities, including Toronto, Montreal, Calgary, Vancouver, Ottawa and Edmonton.

First Capital owns interests in 157 properties. Supermarkets and drugstores account for 31% of its rental revenue, followed by national and discount retailers (15%), medical clinics, gyms and daycare facilities (14%), restaurants (13%) and banks and government offices (11%). Other retailers supply the remaining 16%.

The company’s largest tenants include Sobeys, Loblaw, Metro, Canadian Tire, Wal-Mart and Dollarama.

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First Capital Realty Inc., $19.76, symbol FCR on Toronto (Shares outstanding: 220.9 million; Market cap: $4.4 billion; www.firstcapitalrealty.ca), owns, develops and operates shopping centres throughout Canada. It focuses on big cities, including Toronto, Montreal, Calgary, Vancouver, Ottawa and Edmonton. First Capital owns interests in 157 properties. Supermarkets and drugstores account for 31% of its rental revenue, followed by national and discount retailers (15%), medical clinics, gyms and daycare facilities (14%), restaurants (13%) and banks and government offices (11%). Other retailers supply the remaining 16%. The company’s largest tenants include Sobeys, Loblaw, Metro, Canadian Tire, Wal-Mart and Dollarama....

Despite pessimistic media forecasts, Canada’s banks remain strong and international exposure helps make Scotiabank a best buy.

RIOCAN REAL ESTATE INVESTMENT TRUST $28 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 315.4 million; Market cap: $8.8 billion; Price-to-sales ratio: 7.0; Dividend yield: 5.0%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 292 shopping centres in Canada, including 15 under development. These holdings account for 84% of the REIT’s rental revenue. The remaining 16% comes from 48 malls in the U.S.

In the past few years, RioCan took advantage of lower property values and interest rates to expand its portfolio. As a result, its revenue jumped 39.8%, from $882 million in 2010 to $1.2 billion in 2014.

Due to gains and losses on property sales, earnings fell from $6.04 a unit (or a total of $1.5 billion) in 2010 to $3.25 (or $873 million) in 2011. Earnings rebounded to $4.57 a unit (or $1.3 billion) in 2012 but declined to $2.10 a unit (or $663 million) in 2014.

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Building on the strong performance of its shopping mall empire, RioCan REIT unlocks more property value in a deal with Hudson’s Bay.

RIOCAN REAL ESTATE INVESTMENT TRUST $28 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 315.4 million; Market cap: $8.8 billion; Price-to-sales ratio: 7.0; Dividend yield: 5.0%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 292 shopping centres in Canada, including 15 under development. These holdings account for 84% of the REIT’s rental revenue. The remaining 16% comes from 48 malls in the U.S. In the past few years, RioCan took advantage of lower property values and interest rates to expand its portfolio. As a result, its revenue jumped 39.8%, from $882 million in 2010 to $1.2 billion in 2014. Due to gains and losses on property sales, earnings fell from $6.04 a unit (or a total of $1.5 billion) in 2010 to $3.25 (or $873 million) in 2011. Earnings rebounded to $4.57 a unit (or $1.3 billion) in 2012 but declined to $2.10 a unit (or $663 million) in 2014....

Every Monday we feature “A Stock to Sell” as our daily post. With every stock or investment we recommend as a sell, we give you a full explanation of why we advise against investing in it at this time. In today’s article we have two sells, both from an industry which has a great deal of promise for the future, but hurdles to overcome in the present.

3D Systems Corp. (symbol DDD on New York; www.3dsystems.com), makes and services 3-D printers and provides print materials.

The company’s sales rose 23.0% in the three months ended September 30, 2014, to $166.9 million from $135.7 million a year earlier, though its earnings per share fell 30.7%, to $0.18 from $0.26, on higher research and marketing spending.

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