investment

Trying to buy a stock you like at a lower price can actually expose you to unnecessary risk. For a number of investors, there are two steps to buying a stock.

Recent events in Ukraine leave me with a pleasing sense of déjà vu. This goes back to the early 1960s. I had a number of friends back then who had left Hungary as refugees after the failed revolution of 1956. I had read about conditions in the communist world, of course. But hearing about it from friends who had lived through it made it much more tangible. With those memories in mind, the Eastern European revolutions of 1989 seemed like a wonderful thing. When the Eastern European revolutions broke out, I often stayed up until the early hours of the morning, watching live CNN coverage of events then going on in the former Soviet bloc—the destruction of the Berlin Wall, the non-violent crowds standing up to the dictators, and the on-the-scene discussions of political changes that were likely to follow. I felt a strong personal connection to the changes. But I also had a professional interest. The collapse of communism was likely to be great for the world, and in particular for the stock market. The spread of political and economic liberty, and of the free enterprise system, was bound to lead to greater wealth for all....

Manulife Floating Rate Senior Loan Fund, $9.85, symbol MFR.UN on Toronto (Units outstanding: 26.5 million; Market cap: $261.0 million; www.manulifemutualfunds.ca), mainly holds senior floating rate loans and, to a lesser extent, short-duration debt securities. Senior debt is first in line to be repaid in the event of a bankruptcy. However, the fund primarily invests in junk bonds—debt that’s rated below investment grade. Corporate bonds are riskier than government bonds, and their risk levels vary widely. Some corporates are almost as safe as government bonds and offer only slightly higher yields. Others offer much higher yields, but are far riskier. The junk bonds that Manulife Floating Rate Senior Loan Fund invests in are from the second group....

E-L Financial Corp. Ltd., $701.13, symbol ELF on Toronto (Shares outstanding; 4.0 million; Market cap: $2.9 billion; www.empire.ca), is a holding company that owns 80% of the Empire Life Insurance Company. In addition to life insurance, Empire provides employee benefit plans and financial services. E-L also owns an investment portfolio that includes both direct investments in companies and publicly traded stocks and bonds. As well, it has a 51.38% interest in United Corporations, a closed-end investment fund (symbol UNC on Toronto). The company sold its 100% interest in the Dominion of Canada General Insurance Company, which underwrites property and casualty insurance, on November 1, 2013. That brought in cash of $1.1 billion and let E-L pay a $75 dollar-a-share special dividend....

We haven’t been able to find any water utilities we would recommend for investment. The water business in developed countries is subject to a lot of regulatory hurdles and has limited growth prospects. There may be opportunities in developing nations, many of which desperately need clean water. But investing in these markets can expose you to political risk. We think you should stick with the utility stocks we recommend in our newsletters....

ISHARES CDN REIT SECTOR INDEX FUND $15.52 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 Canadian real estate investment trusts in the S&P/TSX Capped REIT Index. The weight of each REIT is limited to 25% of the ETF’s value.zxc iShares CDN REIT’s expenses are 0.60% of its assets....

ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $32.88 (Toronto symbol AP.UN; Units outstanding: 68.5 million; Market cap: $2.2 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.3%; www.alliedpropertiesreit.com) owns 133 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 9.5 million square feet of leasable area.

Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to retail space. They usually feature exposed beams, interior brick and hardwood floors.

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RIOCAN REAL ESTATE INVESTMENT TRUST $25.35 (Toronto symbol REI.UN; Units outstanding: 302.3 million; Market cap: $7.5 billion; TSINetwork Rating: Average; Dividend yield: 5.6%; www.riocan.com) is Canada’s largest real estate investment trust (REIT), with interests in 346 shopping malls containing over 83 million square feet of leasable area. That total includes 51 U.S. malls with over 14 million square feet.

In the quarter ended September 30, 2013, Rio- Can’s revenue rose 3.1%, to $272 million from $248 million. Cash flow rose 6.6%, to $113 million from $106 million. Cash flow per unit rose 2.8%, to $0.37 from $0.36, on more shares outstanding.

RioCan continues to see growth opportunities in Canada and the U.S. In 2012, it spent $926 million on properties. In the first three quarters of 2013, it bought 16 more for a total of $576 million.
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SNC-LAVALIN GROUP INC. (Toronto symbol SNC; www.snclavalin.com) is a leading Canadian engineering and construction company that specializes in large-scale public works projects, such as roads, bridges, transit systems and water treatment plants. SNC has offices in over 40 countries....

FAIR ISAAC CORP. $52.77 (New York symbol FICO; TSINetwork Rating: Average) (415-472-2211; www.fairisaac.com; Shares outstanding: 34.9 million; Market cap: $1.8 billion; Dividend yield: 0.2%) makes FICO Scores, the computer program that dominates the market for software that businesses use to evaluate customer creditworthiness....