Category Archives: Stock Analysis

Linamar Corporation Q2 2016 Analysis

About Linamar Corporation

Auto parts manufacturer assembly line

Linamar Corporation (TSX:LNR) manufactures highly engineered products, powering vehicles, motion, work, and lives and is ranked 33rd among the top 100 automotive suppliers in North America.

It has 57 manufacturing locations, 6 research and development centres, and 21 sales offices in 17 countries in North and South America, Europe, and Asia.

Q2 2016 and half-year results

Today Linamar rose a whopping 10% after releasing its Q2 2016 results.

Linamar increased its sales by 21% to record levels of $1.66 billion and increased its operating earnings by 29% to record levels of $213.7 million compared to Q2 2015.

The double-digit growth is attributable to its Powertrain/Driveline segment, which delivered strong sales and operating earnings growth of 26.1% and 45%, respectively. This more than covered for the “meh” results from its Industrial segment, whose sales increased 2.1% and operating earnings declined 3.3%, because the Powertrain/Driveline segment contributed about 84% of the sales and 79% of the operating earnings in the first half of the year. Read More

Plaza Retail REIT: Stock Analysis

This article was last updated on June 29, 2016.

About Plaza Retail REIT

Plaza Retail REIT logo

Plaza Retail REIT (TSX:PLZ.UN) is based in Fredericton, New Brunswick in Eastern Canada. It rents out retail properties such as strip plazas, single-use properties, and enclosed malls. Plaza’s unique business strategy drives its business via value-add opportunities to develop and redevelop retail real estate mainly in Eastern Canada.

Plaza Retail maybe a new name to you because it is a small REIT with a market capitalization of $473 million. On the Plaza Retail website, it states “Management owns a significant stake in the company.” So, the management’s interests are aligned with unitholders’ interests.

The REIT pays out monthly distributions that can be reinvested at a 3% discount if you enroll in the divistribution reinvestment plan. At $4.87 per unit, it yields 5.34% .

Retail Properties

At the end of Q1 2016, the REIT had interests in 302 properties, totaling 7.1 million square feet. Over half (exactly 51.9%) of Plaza Retail’s gross leasable area (GLA) is in Québec and New Brunswick. That said, as shown in the “Summary of Properties”, the GLA between the two provinces were diversified across 147 properties.

Plaza Retail REIT gross leasable area breakdown

Source data: Plaza Retail REIT Q1 2016 Report – p2

Plaza Retail REIT Properties Summary

Source: Plaza Retail REIT Q1 2016 Report – p2

Plaza Retail primarily leases to national retailers (90.5% of tenancy mix) with a focus on the consumer staples sector. So, the Target exit from Canada and the Future Shops to Best Buy rebranding has had little impact on Plaza Retail. Read More