On Friday, the S&P 500 was down 1.0% and Toronto was down 0.5%. That was a modest decline in the face of news that the President has the corona virus.
Apple was down 3.2%, Amazon was down 3.0%.
The big winner was the Boston Pizza Royalties Income Fund which gained 43% to close at $7.75 after announcing that it would reinstate monthly distributions at the rate of 6.5 cents per month. That is a yield of 10.1% which is attractive if it is viewed as sustainable and especially if it is viewed as having potential to rise – both of which are arguably true.
The Fund announced that the BP restaurant revenues had recovered to 84% of the prior year’s level as of August and had been at 81% in July. That is impressive and more than I would have expected given seating restrictions. Take-out sales must have been impressive.
6.5 cents is 64% of the 10.2 cents it had paid in February and March. And it is 57% of the 11.5 cents it had been paying out for several years until they cut with the February distribution.
This 6.5 cents is better than I was expecting when I recently mentioned BP and updated the report on September 8.
Part of the reason the for such a big gain was that the unit price had been particularly weak in the past two weeks. The big jump also indicates that the Fund has been able to keep this news a complete secret until it came out. That’s the way it should be.
Overall, the units would seem to be attractive at this price. But we might also expect continued volatility due to the impacts of the second wave of the virus.
As of Sunday evening, the futures markets are indicating a positive day in the markets on Monday.