Investment Q&A

Q: Would appreciate it very much ranking the above based on your expectation of total return over 3 to 5 years period. I wish to consolidate these number into less positions. In particular I am thinking of selling FCR at a loss and perhaps add to GRT.un or one of the others,

Thanks

Q: Could you comment on the announcement today from Artis. Why move to a publicly tradable private equity? Who benefits from this? Presumably it would still be on the TSX? I also wonder why they would sell off what seems to be the best portion of their portfolio? I hold a small position in Artis, but with significant capital gains (which I prefer not to realize right now). What is your view of Artis going forward - hold or sell?
Thank-you

Q: I have a very small position (<1%) with Artis REIT. It has grown smaller as most of my other holdings have increased in value. While I'm down 20% off my purchase price, it's redeeming itself with a nice dividend. But at this point I feel like I should either buy more to bring it up to closer to 2%, or dump it and find something with more growth potential (not necessarily a REIT).
Any advice? Eliminate it or add to it?

Q: Hello 5i Team
Now that Sandpiper has reorganized the board of ARTIS, will appoint a new CEO effective January 01, 2020 and will proceed with their 100 day plan, I have the following questions:
1 – Is ARTIS REIT at the current price $10.89 a reasonable price to pay, provided ARTIS/Sandpiper can complete their 100 day plan and hopefully realize Sandpiper’s estimated NAV at $15.40?
2 – Are any of the three outstanding ARTIS preferred units (AX-PR-A, AX-PR-E and AX-PR-I) a better way to play this story?
3 – Any thoughts on other Canadian REITS that could be put into play by activist investors, given most of the undervalued REITs are majority controlled by the parent corporation (Melcor REIT, Morguard REIT etc.).
Thanks

Q: I just read the presentation from Sandpiper laying out their reasons for immediate change at Artis - lack of management/board ownership but at the same time excessive compensation, too much familial association with management contracts, and the retail spinoff being a low value undertaking. What are your thoughts - justified critique or??
Thanks

Q: Artis and RioCan are both trading at about a 50 % discount to their NAV. Both pay a good dividend. Would you invest in either one? Would you favour one over the other? Are their dividends "safe"? AX.UN is down nearly a dollar in the last two days. Is there a reason for that? Thanks for your insight.

Q: I am underwater on these and would like to harvest the losses and re-buy after 30 days (or not). Can you suggest temporary replacements for each? Any of these names you would not buy after the 30 days and just add to others?
Please deduct as many questions as appropriate.
Thank you.

Q: If they are taken over, what share price range do you feel the acqusition would be done at? Wondering if it is still worth purchasing given the recent price increase.

Q: Artis Reit's strategic review seems to have drummed up some interest from more than one party including management (Not sure if that means they would want to take the company private, perhaps you could elaborate on that as well). Management I believe has quite a bit of "skin in the game" and they seem to think the shares are cheap because they are trading so much below NAV. What is your expert opinion? Is AX.un a good takeover candidate? On a side note, how reliable are real estate NAVs? I assume the price of all the real estate is valued if everything was sold on a orderly basis so that maximum value could be extracted, as opposed to rapid liquidation. I guess a more precise question I am asking is, "Are real estate NAVs realistic or can they be inflated?" The fact that Artis is buying back so many shares makes me think management is confident that the share are undervalued. I guess the 5 cent per month dividend gets easier to pay when they reduce the share count.

Q: In a response to Maureen today you listed Artis as one of two picks for a reit with a dividend over 3.5%. With all the reits out there, most of which pay well over 3.5%, why Artis? Would you please explain your reasons.
Thank-you

Q: What are your two favourites REITS today? And, what are your two favourite REITS today with dividends >3.5%? Thank you.

Q: I've held Artis Reit in my RRSP for quite a few years. I'm thinking of replacing it with H&R Reit. My thinking is H&R Reit:
1) has higher quality assets
2) is almost 4 times the size of Artis Reit (base on market cap)
3) pays a larger dividend
4) is at least as diversified geographically and by asset type (office, retail, industrial, and residential) as Artis Reit

I have two questions:
1) Is H&R just now heading into the problem of too much concentration in Alberta that Artis went through over the last few years (so this may not be the right time for the switch)?
2) Is Artis share price going to appreciate over the next qtr or two from its divestiture of properties at above the REITs NAV? If so, maybe waiting a qtr or two before switching would be better.

As always, I appreciate your insights.
All the best to the 5i Research team in 2020!
Peter

Q: Your thoughts for long term hold, 5 years

Q: My Reit and Utilities have become underweight in my portfolio (not because they haven't done well - other stocks have just done better). What would be your top three value investments in these sectors today (they all seem a bit expensive right now) in both the US and Canada. i am looking for both income and a bit of growth.

Q: Hello, see Artis has a had a nice little run here, looks like due to its strategic review and disposition of properties. Seen some reports that NAV is around $14. Would you be a seller here at these prices, or hold on for a little more gain?

Q: Artis Real Estate Investment Trust AX.UN
Please clarify the situation on Artis REIT. The first sentence of Marcel’s question on Sep 9 read “Artis is going thru the process of selling all its properties to wrap up its business.” Info from Artis website states “In November 2018, Artis announced its intention to sell between $800.0 million to $1.0 billion of non-core assets over the following three years.” Is Artis just selling non-core assets and continuing the business? If so, does your answer change?
Thank you.

Q: Good morning
Artis is going thru the process of selling all its properties to wrap up its business. When the process is completed how are the funds distributed to shareholders and would you know what the net asset value of the stock might be when the sale is completed?
Thks
Marcel

Q: Ax.un seems be selling quite a bit of properties -comment to the plan.

Q: Goodmorning
Could i have your comments on the earnings release and the formation of a special commitee?

Thks M

Q: Good morning 5i Team

I've owned Artis REIT for many years and doing okay (not great) with it due to the accumulated dividends. With the dividend cut the current market yield is 4.86% today. I've continued holding it expecting the total return to be okay going forward anticipating that share buybacks will cause the share price to increase this year.

I like the reit because of it's focused on industry assets and not focused on retail. I also like that it is growing it's properties in the USA. I don't like the reit because of the dividend cut (even with the focus on share buybacks).

Being primarily interested in income, but also total return, I see other reits that are likely better quality and currently pay a higher yield. Can you recommend one to switch to that has a significant presence in USA and is focused on industrial properties?

Thanks
Peter