Friday, 4 December 2009

Carfinco Top Pick on BNN Market Call

Carfinco Income Fund
Units issued basic 23.3 million
Units issued fully diluted 23.4 million
Current monthly distribution: $0.015
Current annualized yield - 9%


Last night, Jason Donville, president and CEO of Donville Kent Asset Management chose Carfinco Income Trust as his number one pick on Market Call on the Business News Network. Interestingly, he ranked it ahead of Royal bank.

That combined with the Globe and Mail’s summary of BNN’s Market Call, which is available in the Report on Business section today is part of the reason Carfinco units opened today up 10% at $2.26 on strong volume.

Here is what the Globe and Mail said to summarize Mr. Donville’s interview.

“Carfinco is a sub-prime vehicle lender that is based in Edmonton. The company’s earnings tend to be quite cyclical but it is extremely profitable during the expansion phase of the economic cycle with return on equity in the 40 to 50-per-cent range being the norm. The company also boasts a strong management team in Troy and Tracy Graf.

Other highlights include…

- Very good management
- Expect a huge bounce back in profitability
- I see this stock going to $3 in 12 months
- 15% distribution moving forward
- I’m confident of a $0.30 dividend in 2011. On a $2 stock. That’s a 15% yield.

About Jason Donville, President & CEO, Donville Kent Asset Management

Jason has had an illustrious career as an award-winning analyst in both Asia and Canada. Prior to founding DKAM, Mr. Donville was consistently ranked as one of the top financial services analysts in the country. In 2004 and 2005, Mr. Donville was ranked in all three financial services research categories (banks, insurance and diversified financial services) in the annual Brendan Woods surveys. Mr. Donville was also recognized as the Top Stock Picker in Diversified Financial Services in the 2004 and 2005 National Post/Starmine surveys, and ranked number 3 for forecast accuracy in 2004 in the same survey.