Bruce Campbell (2)MCAN Mortgage CorpMKP.TOCOMMENTJan 15, 2014

Basically paying out all of its income as dividend, so you are not going to get growth, just dividend. Thinks the dividend is relatively safe as long as the Canadian housing market holds up. If you like growth in the sector, he likes Equity Financial (EQI-T). Their lending book growth was something like 178% last quarter.

With Mortgage companies, you should receive a safer income stream as interest rates rise. It is a yield-only vehicle. If the stock moves up, trim down.

Has a small short position as part of a basket that is against his biggest Long Equity Financial Holdings (EQI-T) (?) in that sector. He is short this because it is one of the few publicly traded mortgage companies originators that has some pretty significant Western Canadian exposure, which will act as a bit of a headwind. Trading at close to 2X BV, whereas the company that he likes better is trading below its BV. 7.8% dividend yield is safe as long as the real estate market in Canada holds up and interest rates stay low. At some point we are going to see residential real estate in Canada roll over, and certainly in areas that are going to be hit by the decline in energy.

(A Top Pick Dec 28/12. Down 1.56%.) 3 Shorts. He is now layering this trade back on now because the spike in rates in May through August pulled forward demand in the housing market.

Pay out all their profitability every year. Stock had a little bit of a sell off but it was not anything significant. A timely buy.

(Top Pick Sept 27/12, Up 1.24%) SHORT. He was early in his call. We saw re-accelerating sales over the last three months. He saw some increase in their loan write-offs in the last few months.

Good company and there has probably been an overreaction to a slightly disappointing quarter or something like that. Insiders are buying which is a good sign. 8.9% dividend yield.

(Market Call Minute.) Interesting company. Just did an acquisition of Exceed Mortgage Corp. the nice thing about it is that if you want dividend income, they have a yield of around 10%.

Mortgage Investment Corporation (or a MIC) and to qualify, they have to pay out all their profits each year so they don’t retain any of their profits. You don’t get any growth in retained earnings. 7.9% yield is all you get. Really like buying a high-yield bond. He is shooting for more than 8% for his clients..

Shorting Canadian housing with Home Capital Group (HCG-T,) and Genworth MI Canada (MIC-T). Is a little bit early but he has seen the housing bubble build and believes it has now peaked and is now on the downside. If right and Canadian housing prices fall 20%-30% over the next 2 years, then these companies are not going to just be at risk of earnings but also at risk of solvency.

Loan to values are quite conservative because of Canadian laws. There is headline risk. Stick with it but don't add to it. Prefers HCG-T

(A SHORT) Primarily subprime mortgage lender almost solely focused on single-family housing. Looking at the housing market data starting with Vancouver and the Toronto condo market, which is now spreading into single-family market elsewhere, you are seeing sales down and listings up. Looks like Phoenix and Florida circa 2006 to him. You are going to start to see inventory build dramatically over the next 6 months and then you start to see prices really fall. Thinks there is 20%-30% downside.