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Originally Posted by I-Hate-Hulse
Hmmm can you elaborate on your train of thought here? I would have assumed that with a less tax efficient corporate structure in place that valuations would head downward, not upward. (I actually think most current valuations have taken this into consideration already)
Unless Kinnear's new GOR Financial Instrument takes off I guess.
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That is what I had thought originally as well, however having owned income trusts for a long time and observed how they have performed against non-trust corporations in my portfolio it became clear just how different the two types of investments they really are.
Income Trusts, for the most part even in their hay days were never a growth stock per se, but as their title insists are income generating to the shareholders. They generate steady monthly income but the stock prices moved slowly. On the other hand you have non-trust companies having their stock price advance considerably more than the trust companies but had lower pay-outs if any dividend.
So the idea is that today income trusts have been devalued considerably for multiple reasons and are somewhat affordable. Their share prices would be moving slowly until they convert but the payouts are still good and I'd have those re-invested and once they convert look for stock price appreciation.
But that is only my opinion.