Handling your children

The Ritcey Report

May 18, 2017

This is part four of a four-part blog about the, sometimes devastating, consequences of overnight wealth.

Affluenza – a condition that comes from being surrounded by too much money, and it can affect children very negatively. Our children, those in our family we care and worry about the most, are especially vulnerable to the consequences of sudden wealth.

This is the fourth of my blogs about the impact of overnight wealth and, despite the overwhelming evidence that the results of sudden wealth are usually more negative than positive (especially on children) I have located a source of good news.

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Backdrop remains stable, but valuation is beginning to look more appealing

Canadian & U.S. morning comments

May 16, 2017

Post in line Q1 results, our stable view of FCR is intact. Notwithstanding what appears to be a temporary occupancy slip, fundamentals are in good shape with internal growth expected to remain in the low-2% range. Capital allocation remains mostly aimed at developments with the pace of completions expected to build through 2H/17. As well, aside from our initial estimate, upcoming new disclosure should shed some light on management’s view of the long-term value creation opportunity through intensification. Our target price held firm with only minor revisions to our ~3.5% 2-year AFFOPS CAGR. The shares are trading at 18.8x 2017E AFFO/5.4% implied cap rate/1% below NAV (Exhibits 1-3 in the analyst’s full comment available on Scotiaview.com). Similar to its retail peers, FCR’s premium to the sector has compressed to below average levels which we partly attribute to investor expectations for stronger growth and a weak sentiment on retail. Still, with a best in class portfolio, we see a reasonable entry for patient capital.

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