BFI Canada Income Fund announced this week that it will soon be an income trust no more, a move that sent the unit price of the Waste management companyinto a tailspin on Tuesday as investors bemoaned the fact that thepayout would be cut by 73 per cent.But there is an upside here: The unit price is cheap enough to makeit a compelling buy. That, at least, is the argument put forth byAvi Dalfen, an analyst at Blackmont Capital, who raised hisrecommendation to a “buy” from a “hold.” Hemaintained a 12-month price target of $23 on the units – soonto be stocks – which implies a 25 per cent upside. The unitstraded on Wednesday afternoon at $18.38, unchanged.According to his calculations, the recent selloff means that theunits trade at just 6.4-times BFI's estimated 2009 EBITDA (earningsbefore interest, taxes, depreciation and amortization).From www.chinatopsupplier.com
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