Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.


This Two-Minute Market Move Could Make You Rich

This Two-Minute Market Move Could Make You Rich[Revealed] How to generate instant income from the stock market. Over and over again. At will. This technique is so powerful – and safe – we’re guaranteeing you can use it to generate $1 million (or more) in retirement cash. And we’ll even send you a $1,000 check to kickstart your journey. Go here for details.


Another Dividend Champion Attracts a Takeover

By Chad Fraser on August 26, 2016

At Canadian Edge, we’re dividend investors above all—on the lookout for stocks with growing payouts we can reinvest, driving returns higher over time.

The key phrase here is “over time.” Because for compounding to work its magic, we need stocks we can hold for the long haul. So we’re not explicitly seeking quick, one-time gains … but we’re happy to lock them in when we can.

In the past three months, we’ve grabbed two such gains, as acquirers offered up juicy premiums for two members of Canadian Edge’s Dividend Champions Portfolio.

What’s driving the deals? We’ve had some good luck, to be sure, but both buys had qualities that, in hindsight, were tempting bait for deep-pocketed foreign buyers.

More on that in a moment. First, here’s a look at the latest acquisition.

Whistler-Blackcomb Grabs Some Air

If you watched the 2010 Winter Olympics, you saw a lot of the Whistler-Blackcomb resort, north of Vancouver. It’s North America’s most visited ski area, drawing more than 2 million visitors a year.

Not as well known is that the resort is publicly traded, under the Whistler-Blackcomb Holdings (TSX: WB, OTC: WSBHF) moniker.

That’s about to change: on Aug. 8, WB accepted a C$1.4 billion offer from Vail Resorts (NYSE: MTN). If the deal goes through later this year, as expected, Whistler investors will get cash and Vail shares worth around C$36 per Whistler share.

But it’s not a slam-dunk. WB shareholders, Canadian competition regulators and the British Columbia Supreme Court all need to sign off. Whistler is also in delicate talks with local First Nations about its Renaissance plan, a $345 million investment to add attractions that make the business less reliant on a snowy ski season.

Saying these factors make the deal “likely but not completely certain to succeed,” Canadian Edge chief strategist Deon Vernooy recommended selling the stock on August 8, when it was trading around C$36.63. If you’d bought on his first recommendation 15 months earlier, in May 2015, you would have locked in a 102% total return, in Canadian dollars.

InnVest Checks Out

Vernooy’s Whistler call followed a similar recommendation on May 20, this time on InnVest REIT (TSX: INN-U, OTC: IVRVF), a Canadian hotel operator that, 10 days earlier, had signed a C$2.1 billion takeover deal (or C$7.25 per unit in cash) from Hong Kong-based Bluesky Hotels and Resorts.

That prompted Vernooy to issue a sell call, locking in a 36% total return from his first recommendation nine months earlier.

So can we expect this happy run to continue? There’s reason to believe more deals could be in the offing north of the border.

That’s particularly true of stocks that have the qualities we look for, which usually rank high on acquirers’ lists, too. They include low relative valuations, healthy balance sheets and high-quality operations generating rising cash flow. We also put a lot of weight on the quality of the management team—a factor many investors overlook.

InnVest, for example, was trading at just 10.6 times adjusted funds from operations (a better measure of REIT performance than earnings) when we first recommended it. We expected cash flow to improve from 2016 onward, putting a lift under InnVest’s dividend payout, which already yielded 8.1%.

Even so, the stock didn’t check all our boxes: It was in the midst of a turnaround, had too much debt, and its dividend history was uneven. But that masked some key events happening behind the scenes.

One was a big management upgrade, including a new CEO, chairman of the board and a slate of independent directors. The end result was a team with more skin in the game, with management and the board holding 35% of the issued units.

Underpinning all this was InnVest’s portfolio, which includes 109 hotels in prime tourist areas. That sets the REIT up to keep profiting from the low Canadian dollar, which is drawing in more U.S. tourists while discouraging Canadians from heading abroad.

Low Loonie Will Likely Drive More Deals

The low dollar no doubt played a key role in our two latest tie-ups, handing both acquirers a nice discount on prime Canadian assets.

Indeed, the loonie’s decline against the greenback has corresponded with a spike in foreign investment in Canada. The currency began its swoon from parity with the U.S. dollar in late 2012 and now trades around $0.78 U.S. Meantime, foreign direct investment has risen 16.5% from 2012 through 2014, versus just a 6.9% increase from 2010 through 2012, according to Statistics Canada.

For us, the bittersweet part is that takeovers force us to bid adieu to reliable dividend-payers and seek out others to make our long-term investing strategy work. You can see our latest ideas for new buying—as well as our up-to-the-minute Dividend Champions Portfolio—in the current issue of Canadian Edge.

You might also enjoy…


Forget Buy and Hold. Here’s how to retire faster…

I’m not a fan of “buy and hold.” Gurus like to tell you that patience is the key, but I call horse puckey.

We’ve discovered an investing technique that consistently pays out easy-to-repeat profits.

One that’s proven to beat the market 2,082% in head-to-head testing.

And one that’s generated over 488 winners since 2011.

This method is so powerful, in fact, some of the investors we’ve let use it reported back to us saying they’ve made $71,425… $82,371… and even as much as $151,000 in a single year thanks to this “trick.”

That’s how powerful this investing technique is!

What what exactly is this mysterious method? I’ve put all the details together here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.