March 21, 2013 Comments

Melcor Developments reported today that it has filed a preliminary prospectus for the proposed partial spin-off of its rental properties into a REIT. This will not likely lead to an accounting gain for Melcor since the real estate is already marked to market. But if the REIT trades above book value then that could push the Melcor stock up. When I saw the press release today it looked like good news to me and I was able to buy more Melcor before its price rose much today. Melcor was up 4.0% on the news today. Possibly it will rise further as this news gets reflected in the stock price. It’s thinly traded and so does not instantly reflect news.

Boston Pizza was up 2.4% to $21.40. I find it expensive at this price. It recently announced it will borrow money to buy back shares. That is accretive to the yield. But it feels a bit forced. Also since our recent update they raised the distribution by 4%. It has done very well indeed but it does seem expensive at this point. I am more inclined to sell some as opposed to buy more at this point.

Canadian National Railway was down 2.5% today. It does not look cheap but possibly the decline is a buying opportunity. CN should do well long term.


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