Sunday, August 27, 2017

August 27, 2017, Quick Update: Peanut Convertible Debentures Power Rankings

This is the 13th update of the Peanut Convertible Debentures Power Rankings.  Consider this particular iteration a "skinny update", without the usual market commentary, as life has gotten busy! This update is current to August 25, 2017 and we'll likely get back to regular long-form updates by October.      

For a summary of the rankings of our entire convertible debenture coverage universe including the quantitative model prices of, and notes on each issue we follow, click on the table below to view it larger.

The Top-5 picks in the Power Rankings are also described with a little more detail in the corresponding section below.

For background information on the Peanut Power Rankings, please see our FAQs by clicking here

Important: the Peanut Power Rankings are provided as information and opinions only and are not intended to be a provision of investment advice or a recommendation of any investment action in any form.  As with all information concerning investments, it is highly recommended that an individual consult with a qualified investment professional before making any investment decisions.

Peanut Power Rankings Top-5 Convertible Debentures (August 25, 2017)
  1.  Tricon Capital, 5.75% 31-March-2022, Series 'U' Extendible US Dollar Convertible Debentures. (Ticker: TCN.DB.U), (Previous ranking: #1).  Bottom line: organic growth in TCN, scale in its US single family rental portfolio, good management, a decent US-dollar denominated coupon, and a reasonable valuation suggest that it's an opportunity to get into TCN.DB.U, if you aren't already in it.  We've been long TCN.DB.U since it debuted at US$100.00.  

  2. DHX Media, 5.875% 30-September-2024, Convertible Debentures. (Presumed ticker: DHX.DB), (Previous ranking: #2). The bottom line: DHX is a unique media content company that would probably makes a nice acquisition target for someone else (Disney? Rogers? Bell?), Peanuts is a once-in-generation type of asset with valuable IP, and the terms of the convertible debenture itself are excellent.  However, it is important to know that the issue, which was issued as a private placement, is not yet trading - and at this point, may not with any liquidity even after regulatory hold periods expire at the end of September. We have no position in DHX.DB, but would be interested in acquiring one once (if?) it becomes available for trading on the TSX.  We do, however, have a position in DHX's Series B common shares (ticker: DHX.B).  Snoopy dance! 

  3. Cargojet, 4.65% 31-December-2021, Series 'C' Convertible Debentures. (Ticker: CJT.DB.C), (Last update's ranking: #4).  The bottom line: Cargojet continues to have a superb market position in an area of long-term, secular growth, and even at current prices, it's not a bad entry point for CJT.DB.C. We've been long CJT.DB.C since it debuted at $100.00.    

  4. American Hotel Income Properties REIT LP, 5.00% 30-June-2022, Series 'U' Convertible Debentures. (Presumed ticker: HOT.DB.U), (Last update's ranking: #5). The bottom line: there are economic and interest rate risks with this one, but quite frankly, at these prices, HOT.DB.U is too cheap to ignore.  We've initiated a position in HOT.DB.U at US$98.00.   

  5. Rogers Sugar, 5.00% 31-December-2024, Sixth Series (Series 'E') Extendible Convertible Debentures. (Ticker: RSI.DB.E), (Previous ranking: #3). The bottom line: the new acquired maple business provides a shot in the arm for a long-time sleepy company, though trade, consumer sentiment, and growth risks remain in Rogers' traditional sugar business.  Also, the market was decidedly tepid on RSI's Q2, and the stock is down about 7% in the last two weeks. We have no current position in RSI.DB.E but would consider acquiring one at the right price.   
Picture of the Day
The Emperor's maples. Tokyo, Japan. Copyright © 2011 Felix Choo / dingobear photography.  Photo is available for licensing from Alamy Images. All rights reserved. Photo may not be reproduced without permission. 

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