Wednesday, March 29, 2017

My Six Investment Transactions in Q117

During the first quarter of 2017 I made four purchases and two sales in my investment holdings.  Excluded from those six transactions are the ETF purchases of VCN and VXC for my son’s Registered Education Savings Plan.  Below is a brief recap of my six transactions during the quarter.

Buy – Canadian Apartment Properties REIT (TSE: CAR.UN)

In mid-January, I increased my stake in Canadian Apartment Properties REIT inside of my TFSA.  Adding to my holding in this great company was a simple decision for me as I see it as a way to collect a 4% yield on a high-quality, well-diversified portfolio of rental properties.  In late February, the REIT announced a 2.4% distribution increase.

Sold – Alaris Royalty Corp. (TSE: AD)

On February 10th I sold my remaining shares of Alaris Royalty in my RRSP. Even though my reason for selling was to avoid over-exposure given my full position of Alaris in my unregistered portfolio, this was still a difficult transaction for me. Although I remain confident in Alaris’s management and consider the company an excellent long-term investment, work needs to be done to turn the page on some of their recent mistakes. With plans to hold mostly US companies inside my RRSP, the timing seemed right to sell my Alaris shares.

Sold – Rogers Communications (TSE: RCI.B)

After Rogers reported strong results in late January and failed to raise their dividend for a second straight year, I decided to sell a small part of my position in mid-February.  Beyond the failure to raise their dividend for a second year in a row, I was upset that the company let go a truly great CEO in Guy Laurence since Rogers family members didn’t agree with the way he was running the business. Management now seems to be waiting for Joe Natale (former CEO of Telus) to come aboard this summer before making any strategic decisions.  Luckily, my Rogers position is in my TFSA, so I didn’t have to pay any capital gains tax on the sale.

Buy – Enbridge Inc (TSE: ENB)

One of my plans for 2017 involves adding to investments that I’m comfortable in as a way to slowly add to these positions. After Enbridge announced a 10% dividend hike in January and indicated that they were likely to increase their payout again after the Spectra acquisition closed, I decided that buying a bit more Enbridge made sense.  On February 24th, when the stock dipped to $54.50 a share, I bought a small amount in order to add to my position.

Buy – Keg Royalties Income Fund (TSE: KEG.UN)

In late February, I was able to complete my position in the Keg Royalties Income Fund inside my RRSP. Not only does the Keg position pay a 5.5% distribution, they also have a history of declaring special dividends in December, which I benefited from in 2016. 

Buy – Tanger Factory Outlet Centers (NYSE: SKT)

Rarely do I take to Twitter to brag about buying a particular stock, yet that was the case on March 10th when I initiated a position in Tanger in my RRSP. After watching Tanger for years and patiently waiting for a situation where the company was valued at less than 15X P/FFO and I had enough cash inside my RRSP to take advantage, the stars were aligned! Now I can only hope that Tanger stays in the $31-$33 range for a while so that I can use my annual RRSP contribution to snap up some more of this exceptionally managed REIT.

Since part of my plan for 2017 is to keep transaction costs low, I'm happy with the six transactions above given it compares favorably with busier quarters historically. The lack of any short-term trades helped keep the number of transactions down. The only transaction that I'm second guessing is selling a small portion of my Rogers position. I feel that the transaction might have been based more on my frustration with the Rogers family and lack of strategic direction being taken by interim management. I'll try not to let emotions enter my investment process to the same degree during the remainder of 2017.

What buy or sell decision that you made during the first quarter of the year are you most proud of?

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