Tuesday, 30 November 2010

A Special Christmas Gift From Carfinco?

Carfinco Income Fund (TSX:CFN.UN)
Units issued: 23.9 million
Units fully diluted: 24 million
Current monthly distribution: $0.02
Q1/2010 special distribution: $0.04
Q2/2010 special distribution: $0.10
Q3/2010 special distribution: $0.10

-----------------------------------------

Analyst Fred Westra has been bullish on Carfinco since he and Industrial Alliance (IA) started coverage back in February of 2010. At that time IA believed that Carfino was a strong buy and that it was worth $3.50 per unit within 12 months.

Fast forward to Fred's latest report published November 25th on his 11th update, the strong buy remains intact but the target is now $7.75.

The reasoning behind the elevated evaluation is that Carfinco has set six consecutive record quarters of earnings in a row and he expects that it will issue a special distribution in December that he estimates at $0.19 per unit.

Being an Income Fund, Carfinco must distribute all of its taxable earnings for 2010 and if the fourth quarter is anything like the last six, Christmas will come early for unitholders.

See the IA report by clicking here.....