Steve DiGregorio's top picks: Apr. 5, 2016

Long term, we like remain positive on the equity markets, shorter term we anticipate increased volatility.

We see this as a period of time to begin repatriating investments to Canada.

- Fwd P/E for the TSX and S&P 500 are similar, but more earnings power in Canada two years out.   2016 Q1 should mark the trough for Canadian earnings (~$170)

- Canadian GDP has held in very well despite all the negative headlines

- Commodities have been basing (people are underestimating the earnings power from this), and industrials have been strong

- Better to repatriate to dividends stock in Canada (take advantage of the dividend tax credit), and growth outside of Canada

- Shorts are leaving Canada (Banks + 10% in March)

- Fiscal & Monetary policy positive

We see dividend investing as ideal for this environment (low rate, low growth)

Ideal scenario:  Fiscal stimulus, $50 oil, 75 cent dollar.

TOP PICKS:

Artis REIT Preferred Shares Series C (AX_u.TO) 

Callable 2018

CY 7.75%, Reset yield of 8.5%

446bps + 120bps = 556  > than coupon

Expensive capital

30% of properties in AB, 30%

Rona Preferred Shares Series A (RONa.TO)

Callable in 5 years

Real yield is 4.7% (which is expensive to lowes)

Lowe’s needs to continue to report in Canada

7M outstanding, therefore 35M extra on a $3B deal

Risk, competition bureau,

Downside to 4.5%-5% yield, imply $18 price

Transforce (TFI.TO)

Free cash flow machine (even in 2008 and 2009

DJ trucking index at 52 week high, TFI lagging.

Modified dutch auction for $220M of shares @ $22, only ^60 million tendered

Been building the last mile delivery through acquisitions, develop e-commerce B2C.  Relationship with Amazon

Past Picks: Oct. 30, 2015

COM DEV International (CDV.TO) - Acquired By Honeywell February 9, 2016

Crius Energy Trust (KWH_u.TO)

Dream Hard Asset Alternatives Trust (DRA_u.TO)

Total Return Average : -1.88%