Monday, December 9, 2013

Canadian REITs: Super Buys: Dundee Real Estate Investment Trust (TSX:D-UN),Northern Property Real Estate Investment Trust (TSX:NPR-UN)

Not since 1990 have US REITs fetched such a high multiple in terms of book value per unit. In contrast, almost all the Canadian REITs in our table trade near, or at a discount to, their book value. Here's a look at two super buys.

Dundee Real Estate Investment Trust (TSX:D-UN) (OTC:DRETF) have given up 22.8% of their US-dollar value this year. However, the stock's disappointing performance doesn't reflect a corresponding deterioration in the trust's underlying business. In fact, the office and industrial REIT remains solidly profitable.

Although market sentiment toward this laggard won't recover overnight, the stock's current yield of 7.8% rewards investors for their patience.

And Dundee REIT's moderate payout ratio, steady occupancy rates, and strong balance sheet limit the risks of holding and waiting. And the stock trades at 0.79 times book value.
Whereas Dundee REIT focuses on larger cities, Northern Property Real Estate Investment Trust (TSX:NPR-UN) (OTC:NPRUF) owns primarily residential income-producing properties in Alberta, and the Nunavut, and Northwest Territories—remote areas where the firm is often the only game in town.

In recent quarters, the trust has faced the challenge of redeploying the proceeds from the divestment of its senior-housing facilities—a move that the firm made to maintain its tax-advantaged status.

Although the REIT faces its fair share of challenges, the trust has returned to dividend growth and continues to deploy the proceeds from the sale of its senior-housing facilities.
From a tax standpoint, we note the Canadian government withholds 15% of the dividends that these REITs pay to US investors, though you can recover this amount by filing a Form 1116 at tax time. Investors who hold these stocks in an IRA or other tax-advantaged account will not be able to recoup this withholding.

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America Movil SAB de CV (NYSE: AMX)

América Móvil, S.A.B. de C.V. provides telecommunications services in the United States, Latin America, and the Caribbean. It offers mobile and fixed voice services, including airtime, local, long-distance services, public telephony services, and network interconnection services. The company also provides value added services comprising short message services, multimedia messaging services, and mobile entertainment services; and data services, such as data transmission, e-mail services, Web browsing, instant messaging, content streaming, and interactive applications, as well as corporate network services. In addition, it offers handsets, smartphones, broadband cards, and tablets; accessories consisting of chargers, headsets, belt clips, and batteries; push-to-talk services; and other wireless services that include two wave, PC and wireless security, and machine-to-machine services, as well as Oficina Móvil Telcel, a services suite to enhance applications, video calls, and mobile banking.
Please take a look at the 1-year chart of AMX (América Móvil, S.A.B. de C.V.) below with my added notations:
1-year chart of AMX (América Móvil, S.A.B. de C.V.) Movil's stock had been trading in mostly a sideways range from March through October. Several times over that period the stock also formed a key resistance level at around $22 (blue). Back in November the stock finally broke up out of its base and above that important $22 level. So, assuming AMX holds $22, the stock should be moving overall higher from here.

The Tale of the Tape: AMX had a key level of resistance at $22 that should now act as support on any pullbacks. A long trade could be entered on a pullback to $22 with a stop placed below that level. A break back below $22 could negate the forecast for a move higher.
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Brazil ETFs in Focus on GDP Contraction: Any Hope for 2014?

A year to forget for Brazil isn’t over quite yet, as more bad news has hit the huge South American nation. This time, the weakness comes from the latest GDP report from the country, which was quite poor.

In the report, Brazil revealed that its GDP actually contracted for the most recent quarter (compared to Q2), posting a decline of -0.5%. This was lower than the -0.3% slump predicted by a Bloomberg survey of 38 economists, according to the Financial Times.

The key areas of weakness in the country came from a big slump in agricultural output, which tumbled by 3.5% (q/q), while industry and services were a bit better, showing tiny gains for the time period. Troublingly for the nation though, investment also fell, by 2.2%, suggesting that some are abandoning the country as a destination for capital. (more)

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TASER International, Inc. (NASDAQ: TASR)

TASER International, Inc. engages in the development, manufacture, and sale of conducted electrical weapons (CEWs) for use in law enforcement, federal, military, corrections, private security, and personal defense markets worldwide. Its CEWs transmit electrical pulses along the wires and into the body affecting the sensory and motor functions of the peripheral nervous system. The company manufactures four hand-held CEW product lines, including TASER X2, TASER X3, TASER X26, and TASER X26P; TASER eXtended Range Electronic Projectile, a self-contained wireless CEW that deploys from a 12-gauge pump-action shotgun; and TASER Shockwave security system that provides safety and stand-off capability during hostile situations. It also offers consumer products comprising TASER C2 CEW; various types of cartridges comprising standard cartridges, Smart cartridges, and training cartridges; and other accessories, such as batteries. In addition, the company provides video products, including TASER AXON camera system that captures devices and enhances transparency between law enforcement agencies and their communities; EVIDENCE.COM, a digital evidence management system and warehouse, which provides digital evidence management, sharing, analysis, and storage services.
To review TASER's stock, please take a look at the 1-year chart of TASR (TASER International, Inc.) below with my added notations:
1-year chart of TASR (TASER International, Inc.) TASR has formed a solid resistance at $18 (red), which would also be a 52-week high breakout if the stock could manage to close above it. In addition, the stock has been climbing a trendline of support (blue). These two levels combined have TASR sandwiched within a common chart pattern known as an ascending triangle. At some point, the stock will eventually have to break one of those two levels.

The Tale of the Tape: TASR has an up trending support and a 52-week resistance level to watch. A long trade could be made on a close above the $18 resistance. A break below the up trending support could be an opportunity to enter a short trade.
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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
12 noon Household debt (financial accounts) 3Q   -- 0.2%
7:30 am NFIB small business index Nov.   -- 91.6
10 am Job openings Oct.   -- 3.9 mln
10 am Wholesale inventories Oct.   -- 0.4%
2 pm Federal budget Nov.   -- -$172 bln
8:30 am Weekly jobless claims 12/7
335,000 298,000 
8:30 am Retail sales Nov.   0.7% 0.4%
8:30 am Retail sales ex-autos Nov.   0.2% 0.2%
8:30 am Import price index Nov.   -0.8% -0.7%
10 am Business inventories Oct.   0.4% 0.6%
8:30 am Producer price index Nov.   0.1% -0.2%
8:30 am Core PPI Nov.   0.1% 0.2%
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