Download pdf - AN INTERVIEW WITH Mark Bunting ROBERT WESSEL OF WHY … · 2018-09-15 · cent decline in the British pound, the firm has increased its exposure closer to a 10 per cent weighting,

MARCH 6, 2017 INVEST LIKE A PRO, WITH THE PROS

by Mark Bunting, Publisher, Capital Ideas Research

Canadian investors love their Canadian banks — for good reason.

In January, 1997, for example, 1,000 TD Bank shares were worth $8,700. Today, those shares have a value of nearly $133,000, including reinvested dividends. A neat return of more than 1,500%.

But a case can be made for investors to look beyond their own backyard to complement their Canadian bank holdings with banks from other parts of the world that have superior growth and healthy yields. That’s the opinion of Robert Wessel, managing partner of Hamilton Capi-tal, which distributes two ETFs with exposure to global financials.

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“What you’ve been seeing (for Canadian

banks) is these two decade cyclical and

secular trends end, and when they ended you

got more normal growth which is six per cent. Going from 10 per cent-plus to six is pretty

darn noteworthy.”

Robert Wessel, Hamilton Capital

Mark Bunting Publisher

COVER STORY

AN INTERVIEW WITH ROBERT WESSEL OF HAMILTON CAPITAL’S

OUTPERFORMING GLOBAL BANK ETF

FROM PEYTO TO JADESTONE: OIL & GAS

STOCKS WITH BIG UPSIDE POTENTIAL

ANALYSTS START TO TAKE A SHINE AGAIN TO

FORMER DARLING AVIGILON CORP.

WHY RAYMOND JAMES LIKES THE BUSINESS MODEL OF FOUNDERS ADVANTAGE CAPITAL

CAPITAL IDEAS DIGEST

The Case for Owning Global FinancialsHow to get growth and yield in the $10 trillion sector


The flagship Hamilton Capital Global Bank ETF (HBG-T) outperformed the Global Bank Index in 2016 by 16% with a 28% total return. Hamilton Capital recently launched the Hamilton Capital Global Financials Yield ETF (HFY-T), which it says offers REIT-like yield with positive interest rate sensitivity.

Capital Ideas Research interviewed Mr. Wessel about the benefits of investing in global financials, the superior growth of smaller or mid-caps in certain countries, including the U.S., and why REITS could be a risky bet should rates begin to normalize the next few years. He also has a few investment ideas for you.

Canadian banks return to normal

In 2011, Mr. Wessel and his team forecast that Canadian banks would see their EPS growth decelerate from low double digits to mid-single digits. That turned out to be accurate. Mr. Wessel believed at the time the big banks would return to normal growth rates after a lengthy period of outperformance.

“The Canadian banks had 20-plus years of 11 per cent growth. That’s not normal,” Mr. Wes-sel says. “Normal in this GDP environment is six per cent. We’re not being bearish on the Canadian banks. There’s nothing wrong with six. But it is notably lower than the 10 per cent-plus experienced from 1990 to 2010. The problem with the Canadian banks is that anything that’s even seen as marginally negative — because everybody owns so many of them and they have such strong feelings about them — that even benign, anodyne, generic commen-tary that earnings will slow can be seen, quite inaccurately, as being bearish. What you’ve been seeing is these two decade cyclical and secular trends end, and when they ended you got more normal growth which is six per cent. Going from 10 per cent-plus to six is pretty darn noteworthy.”

Mr. Wessel details the headwinds faced by Canadian banks the last few years.

“Turbulence in the global markets, slowdown in growth in the Canadian economy — below trend, weaker U.S. economy, a macro economic tailwind that was nowhere near as beneficial to the sector as it used to be, the significant allocation of capital outside of Canada. There was a multitude of factors,” he says.

Mr. Wessel believes there’s a place for Canadian banks in investors portfolios pointing to their solid franchises, high profitability, and predictable dividends. But he thinks global fi-nancials can be a good complement to the big banks while adding diversification, above average growth and solid yields.

“I think there are strong reasons, particularly related to taxation, not to sell Canadian banks. But is there a powerful case to add diversification alongside Canadian banks, I think the an-swer to that is very surely yes,” Mr. Wessel says.

Advantages to investing in global financials

“The global financial sector is so gigantic — it has a combined market cap of $10 trillion, give or take,” Mr. Wessel says. “There’s hundreds and hundreds and hundreds of financial companies. You just have the ability with a non-passive and active product to more explicitly find growth so we’re able to customize the portfolio, as large as it is, by finding financials that are growing, whether they’re growing because they’re operating in countries, or areas within countries, that are growing faster, or because they have good operational excellence, or, in part, because they’re taking market share. The sector is so massive so we’re able to

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“I think there are strong reasons,

particularly related to

taxation, not to sell Canadian banks. But is

there a powerful case to add

diversification

“The global financial sector is

so gigantic — it has a combined

market cap of $10 trillion, give or

take. There’s hundreds and hundreds of

financial companies. You

just have the ability with a

non-passive and active product to more explicitly find growth.”


pick and choose and come up with a highly liquid portfolio but still have exposure to growth.”

Another advantage to owning a diversified mix of global financials is that many of the countries in which the companies operate are not always correlated with Western hemisphere banks. It’s one of the reasons Mr. Wessel’s main fund out-performed last year.

“We had exposure to countries where they were not in the eye of the storm,” Mr. Wessel explains. “We had exposure to Australia, we had exposure to India, so when the world is having big problems for Brexit, Australia is weakening like everybody in the globe, but it’s not having the same impact. In down markets we were able to weather the corrections better because we had 15 countries. Invariably, a large amount of those countries, whenever there’s some sort of global correction, are not in the eye of the storm. By definition you tend to outperform in periods of turbulence because your diversification works to your advantage”

Big, dumb U.S. banks

In the U.S., Mr. Wessel has been paring back his bank holdings because of the recent run they’ve had. His main focus is in mid-cap banks and not large caps, in large part because the big four U.S. mega-cap banks are not growing their earnings.

“Wells Fargo, J.P. Morgan, B of A, and Citigroup are all in year four of zero EPS growth,” Mr. Wessel says. “All of those four mega banks are in all of the relevant indices. Those four banks are huge percentages of almost all passive finan-cials ETFs. They’re huge percentages of every financials index. They’re notable percentages of the S&P 500 and so on. A bank analyst friend of mine refers to them as ‘big, dumb banks’. By just being away from them, we’ve benefited.”

Mr. Wessel not only shuns the four U.S. mega banks, he’s also generally not invested in the large regional banks a tier below them.

“There’s the four mega-caps,” Mr. Wessel explains. “Then you’ve got about 10 regionals so there’s 14 banks that really are by far the biggest part of the U.S. banking system, and we generally own none of those. But below that is 200 mid-caps, and below that is another 200 small-caps. If you’re in Canada, you can’t design a portfolio of banks that’s growing faster than the sector because they’re all the sector, where in the U.S., if you have 200 banks to choose from — guess what — you can find a combination of banks that have a good risk/reward that are growing faster.”

The appeal of U.S. mid-caps

One of Mr. Wessel’s largest holdings is First Republic Bank (FRC-N) which offers commercial banking and wealth man-agement in select areas of California, Oregon, New York, Connecticut and Florida.

“We’re looking for areas and companies that are growing faster than their national or regional economy,” he says. “First Republic (FRC-N) is actually a decent sized institution. They do very, very well in the businesses that they target. They’re in good geographies, and they have good demographics in their targeted customer base. They have a wealthi-er clientele. They execute very well — so guess what — because the U.S. is such a big country, they’ve got lots of room to grow.”

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First Republic Bank (FRC-N) | One year chart


Another stock Mr. Wessel likes is Silicon Valley Bank (SIVB-O), which lends to technology companies, and offers bank-ing to high-net worth individuals. The bank claims on its website that it’s helped fund more than 300 start-ups.

U.K. and Northern European banks top of the heap

Overseas, an area of focus for Mr. Wessel are Northern European banks which, owing to their high capital levels, helped to shield his investors last year from some of the turmoil in other parts of Europe.

“All of the turbulence that took place in Europe last year — Brexit, the fragile economy of southern European, worries China would have a hard landing — we had al-most no exposure to those areas so we were in good shape,” Mr. Wessel says. “Going into Brexit we had basi-cally zero U.K., and our Europe was almost entirely North-ern Europe to hedge the risk of a negative surprise.”

Mr. Wessel also made the right call pre-Brexit by raising cash and reducing U.K. exposures. Now, with the correc-tion in both the U.K. banks, and the more than 20 per cent decline in the British pound, the firm has increased its exposure closer to a 10 per cent weighting, and has lifted its currency hedges.

Mr. Wessel also thinks highly of Aus-tralian and Northern European banks, which he believes are superior to most.

“Northern European countries are much wealthier than Canada, growing faster than Canada, have banks that have similar returns on equity or slight-ly lower than Canada, have high divi-

dend yields, and are seen, quite rightly, as very low beta banks,” Mr. Wessel says. “They also have tons and tons of capital, Swedish banks in particular, so they’re naturally seen as quite different, and separate and distinct than you would see in the average Euro-pean bank.”

Danske Bank (DANSKE-DC), which trades in Den-mark, is a favourite holding for Mr. Wessel.

“Danske is one of the most conservative banks in the world,” he says. “Northern European banks, including Danske, are among the best capitalized banks in the world. The Canadian banks have basically the lowest capital ratios in the world. We track 35 countries, there’s a chart on our website, and on that chart Cana-da is 34th. Northern European banks rank near the top.”

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Silicon Valley Bank (SIVB-O) | One year chart

Danske Bank (DANSKE-DC) | One year


The Canadian banking sector is often held up as an example of one that is well-run and prudently regulated, which allowed the banks to escape the financial crisis relatively unscathed. But Mr. Wessel says other countries feel the same way about their banking sectors.

“We don’t tell people they should sell Canada and buy Australia,” he says. “We just tell people there’s more than Canada. Australians know they have some of the best banks in the world. I’m sure people in Sweden think they have the best banks in the world, and I bet you if you talk to the average American now, they think they have the best banks in the world. Local market bias is a very real dynamic.”

Higher interest rates are coming

Dividend yields are usually an important part of total returns for global financials. Mr. Wessel believes we’re coming into the first sustained period of higher interest rates since the late 1970s, something many investors have never experienced. How should investors, especially those who own real estate investment trusts (REITs), protect their investments while producing growth and yield? That’s where Hamilton Capital’s new ETF (HFY-T) comes into play.

“It aspires to a REIT-like yield, but with positive rate sensitivity, Mr. Wessel says. “The REITs have very low growth and very high valuations, and that’s sustained by the fact that they have very high yields.”

Will REITS underperform the financials?

“It seems very likely the market is about to experience a three-to-five year period of rising or normalizing rates. Arguably, it’s already started,” he says. “In the last 15 years, REITs have done poorly in periods of rising rates, and could be challenged in the coming years. There’s more than 400 financials globally that have a yield of more than 5%. Our aspiration is to have a REIT-like yield but because the portfolio would respond positively to rising rates, it would seem like an obvious substitute to sell a REIT ETF and buy HFY.”

**

Hamilton Capital Partners offers a fair amount of free commentary on the global banking sector on its website. Read it here. hamilton-capital.com/insights/

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http://www.hamilton-capital.com/insights/


Dow 21,000 sound too good to be true? Maybe not, according to UBS Wealth Management.

In a recent Barron's article, Mark Haefele, global chief investment officer at UBS, wrote that he has "mixed views" on some Trump trades (for example he says U.S. government bond yields are at "risk of stalling” and the "bulk of the dollar rally is over) but that the U.S. equities component of the so-called “Trump trade” has “room to run."

"Corporate tax cuts could add between two and eight percentage points to earnings growth this year. If repatriated overseas cash is used for share buybacks, earnings could be a further 3-to-4% higher. And even if President Trump’s actions fall short of his pledges, economic and corporate fundamentals provide grounds for confidence," he wrote.

Mr. Haefele said he already expect to see 11% earnings growth for the S&P 500 index this year, driven by the strength of the U.S. consumer and the recovery in the oil price.

"Overall, we believe market conditions justify a moderately risk-on stance. Global economic data is beating consensus forecasts by the most since May 2010, according to the Citi Economic Surprise Index. And equity market volatility is low, with the

CBOE Volatility Index (VIX) trading at around 11.6 and below its average of 19.6 since 1990." As a result, Mr. Haefele says his firm is overweight global equities versus high-quality government and corporate bonds.

"While we do not expect a significant re-rating of global equities – already trading on a trailing price earnings ratio close to their 30-year average of 18.4 times – markets should rise on earnings growth," he wrote.

"Our view is reinforced by a positive US fourth-quarter earnings season. With over three quarters of S&P 500 companies having already reported, earnings per share (EPS) growth is on track to rise around 6%, and around two-thirds of companies have beat earnings per share estimates. We expect full-year EPS growth of around 11%. Tax reforms could add further upside.”

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SMART MONEY

http://www.barrons.com/articles/which-trump-trades-have-more-room-to-run-1488233690


CIBC World Markets analyst Scott Fromson initiated coverage o f C C L I n d u s t r i e s I n c . ( C C L . B - T ) w i t h a n “outperformer” rating and $320 price target for the stock. Consensus is $322.14. The stock is currently trading around $287.

All seven analysts that cover the s t o c k h a v e a " b u y " recommendation. “We think CCL's leadership position, including large product and geographical footprint, gives it a key competitive advantage in s e r v i n g i t s m u l t i n a t i o n a l customers in food, beverage, packaged goods, auto, industrial and health care,” said Mr. Fromson in a note. “CCL is able to provide local market service across a broad product range in major markets all over the world.

He also said internal growth is strong and further acquisitions are "a key catalyst," for growth. “We believe CCL will continue to seek acquisition opportunities among the fragmented industry, filling out the product and geographic portfolio. This issue is sufficiently important to address in the early part of this report. Market history has shown on countless occasions that Growth by Acquisition can be a tricky approach. Do it right and the market giddily takes the

stock higher. But if the strategy turns sour, the market is merciless.”

Echelon Wealth analyst Russell Stanley init iated coverage o f C a n o p y G r o w t h C o r p . ( W E E D - T ) w i t h a “speculative buy” rating and $14 price target. The stock is currently trading around $11.85. Consensus is $14.16. “Canopy’s growth strategy includes continued market share expansion in Canada, moving up the value-chain by adding higher value cannabis-based products, and expanding internationally,” he said in a note.

“For a company with this market capitalization, we believe WEED is underfollowed,” he added. “We view WEED as the market leader in several ways, and our 'speculative buy' rating reflects t h e s i g n i f i c a n t g r o w t h

a s s u m p t i o n s b e h i n d o u r est imates, rather than its competitive positioning."

All seven analysts that cover the s t o c k h a v e a " b u y " recommendation.

R a y m o n d J a m e s a n a l y s t Michael Overvelde initiated coverage of Founders Advan-tage Capital Corp. (FCF-X) with an “outperform” rating and He set a price target of $4.50. Consensus is $4.88. The stock is currently trading around $3.55.

H e d e s c r i b e s t h e n e w l y established investment as h a v i n g a " d i f f e r e n t i a t e d approach to investing designed to appeal to founding share-holders of successful growth companies that are seeking to partially monetize their hold-ings while retaining operating control of the businesses that they founded."

What different, he said, is its investment structure, which is "designed to allow founding owners of investee companies to retain minority stakes while participating disproportionately in future cash flow growth that they help to generate."

Mr. Overvelde said there is "a favourable selection bias i n h e r e n t i n F A C a p i t a l ’ s investment model as it is designed to appeal to business owners that have visibility on continued growth and the desire to see it materialize.”

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Initiations


All three analysts that cover the s t o c k h a v e a " b u y " recommendation.

Valeura Energy (VLE-T). Mackie Research maintains “buy”, price target of $2.40, which implied upside of 182%.

Jadestone Energy (JSE-V). GMP FirstEnergy maintains “speculative buy”, price target of $1.40. Current price is $0.49.

Tamarack Valley (TVE-T). Canaccord Genuity cuts price target to $4.50 from $5. CIBC maintains “outperform”, price target of $5. Current price is $3.

Primero Mining (P-T) Mackie Research reduces price target to $4 from $4.50, which implied a 330% return, maintains Buy.

Canaccord Genuity analyst Robert Young increased his target price on Kinaxis Inc. (KXS-T) to $80 from $74 and maintained his "buy" recommendation after its latest earnings report. Consensus is $79.42. The stock is currently trading around $75.

"We see a number of upside drivers that could lead to higher than expected growth including improved profile, positive channel impact with maturing opportunities, expansion into Korea and the broader APAC region, as well as an impressive slate of top-tier prospects," he said in a note.

"Kinaxis has been actively investing to build a strong set of channel partners, and we believe that Kinaxis is in the early stages onboarding more partners such as Bain announced recently, and potentially Cognizant."

Added Mr. Young: "Kinaxis is not cheap, but we recommend the shares given the company’s

strong combination of forecast revenue growth and EBITDA margin which we believe supports a premium valuation. Great companies don't let

you in easy..."

Among 12 analysts that cover the stock 11 have a "buy" and one a "hold."

A number of analysts increased their targets on Avigilon Corp. (AVO-T) in recent days, after its latest earnings report.

Raymond James analyst Steven Li upgraded the stock to "outperform" from "market perform" and bumped his target to $20 from $12. "This is the second quarter in a row that AVO has outperformed relative to expectations," said Mr. Li. "With its IP licensing program starting to make a material contribution (and driving upside), a steady cadence of new products with solid margins (improving mix) and stronger CF conversion, we are upgrading AVO." GMP analyst Justin Keywood, who raised his rating to “buy” from “hold" and bumped his target to $19 from $10.50.

B M O N e s b i t t B u r n s a n a l y s t T h a n o s Moschopoulos has a "market perform" on the stock and increased his target to $17 from $12. Consensus is $18.40.

“We believe that Avigilon has a strong and competitively differentiated product offering, albeit in a market that seems to be experiencing slowing growth and increased pricing pressure,”

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NOTABLE


said Mr. Moschopoulos. “We're neutral on the stock as we'd like better comfort that Avigilon can get back towards achieving a healthy level of year-over-year EPS growth.”

Still with Avigilon, Haywood Securities raises the price target to $25 from $20, maintains “buy”. RBC raises price target to $18 from $16, maintains “outperform”. CIBC raises target to $18 from $10, maintains “neutral”.

Among eight analysts that cover the stock, five have a "buy" and three a “hold.”

TECSYS (TCS-T). Cormack reiterates “buy”, and $12 target.

“We believe TECSYS is solidly positioned to execute on the nascent but growing healthcare SCM market that has started to open up of late. Further, we believe the building recurring revenue base provides the stock with increasing u n d e r l y i n g v a l u e w h i c h m a k e s t h e risk-to-reward compelling.”

Point Loma Resources (PLX-V). This is a junior energy stock we first mentioned a few weeks ago, based on a Mackie Research recommendation. The stock surged more than 75% after that before pulling back. Mackie reiterates a “buy” with a price target of $1, which still gives the shares a projected potential return of 100%.

Eguana Technologies (EGT-V). Mackie Research reiterates “speculative buy”, price target of $0.70, which indicated a return of 192%.

Peyto Exploration (PEY-T). RBC maintains Outperform, price target of $45, implying upside of 62%. GMP FirstEnergy maintains Buy, target of $42.75. Secure Energy (SES-T). RBC maintains

“outperform”, price target of $14, suggesting total return of 33%. GMP FirstEnergy maintains “buy”, target of $14. Torstar (TS.B-T). RBC maintains “sector perform”, price target of $3, implying 75% upside.

CanniMed Therapeutics (CMED-T) Eche-lon Wealth has some new commentary on this marijuana company although it currently doesn’t have a rating on the stock. "CMED reported revenue of $9.8 million and an adjusted EBITDA loss of $0.1 million v. analyst expectations for revenue of $9.4 million and an adjusted EBITDA loss of $1.0 million. This represents top-line growth of 69%. Moreover, the volume sales appear to be accelerating, with Q1/2017 volumes up 83% year-over-year. The company also announced that an independent analysis by Anandia Labs returned a clean certificate, with “not detected” levels for each of the 56 pesticides, fungicides and plant growth regulators (PGRs) tested for.”

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Asanko Gold Inc. (AKG-T) was raised to "buy" from "hold" at Canaccord Genuity by analyst Rahul Paul, who lowered his target to $5 from $5.50. Consensus is $5.75.

Albermarle (ALB-N). RBC raises price target on this lithium company to $130 (U.S.) from $114, maintains “outperform”.

Bank of Montreal (BMO-T) was upgraded to "sector outperform" from "sector perform" by Scotiabank Cap-ital Markets analyst Sumit Malhotra. He increased his target price to $113 from $108. Desjardins Securities an-alyst Doug Young maintained a “hold” rating for the stock and increased his target to $104 from $99. Con-sensus is $104.44.

Bank of Nova Scotia (BNS-T) is a “buy” at Des-jardins Securities. Analyst Doug Young increased his target price to $86 from $83.

BMO Nesbitt Burns analyst Sohrab Movahedi has an "outperform" and increased his target to $83 from $80. Consensus is $82.98.

Canadian Imperial Bank of Commerce’s (CM-T, CM-N) is a “buy” at Desjardins Securities. Analyst Doug Young increased his target to $126 from $119. Consensus is $118.20.

Dream Global Real Estate Investment Trust’s (DRG.UN-T) is a "hold" at Desjardins Securities. Analyst Michael Markidis raised his target to $10 from $9.50. Consensus is $7.54.

D R E A M U n l i m i t e d Corp. (DRM-T) was raised to "buy" from "hold" at TD Se-curities by analyst Sam Damiani with a target of $9. Consensus is $9.50.

MacDonald Dettwiler and Associated Ltd. (MDA-T) was upgraded to

"outperformer" from "neutral" by CIBC World

Markets analyst Stephanie Price. Ms. Price lowered her target price to $83 from $86. Consensus is $81.89.

MAG Silver Corp. (MAG-T) was raised to "speculative buy" from "hold" at TD Se-curities by analyst Daniel Earle. He raised his target to $26 from $21. Consensus is $24.74.

McDonald’s Corp. (MCD-N) is an "outperform" at Credit Suisse. Analyst Jason West increased his t a r g e t t o $ 1 3 7 f r o m $ 1 3 0 . C o n s e n s u s i s $131.50.

Methanex Corp. (MEOH-Q, MX-T) was upgraded to “outperform” from “market perform” by Raymond James analyst Steve Hansen. His target price for the stock rose to $60 (U.S.) from $53. Consensus is $53.09.

Mullen Group Ltd. (MTL-T)

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OTHER Upgrades & REVISIONS


was rated a new “buy” by Cormark Securities analyst David Tyerman, who set a target price of $19. The ana-lyst average target is $20.19.

N a t i o n a l B a n k o f Canada (NA-T) is a "market perform" at BMO Nesbitt Burns. Analyst Sohrab Mova-hedi raised his target price to $60 from $56. Consensus is $59.52.

Secure Energy Services Inc. (SES-T) was raised to "strong buy" from "buy" at Industrial Alliance by analyst Elias Foscolos. His target rose to $13 from $12.25, while the average is $13.70.

Spin Master Corp. (TOY-T) is a "market perform" at BMO Nesbitt Burns. Gerrick Johnson raised his target price to $38 from $34. Consensus is $30.39.

WSP Global Inc. (WSP-T) was upgraded to strong buy” from “outperform" at Ray-mond James. Analyst Freder-ic Bastien maintained a $55 target price. Consensus is $49.64.

Sarepta (SRPT-O). RBC cuts price target to $91 (U.S.) from $98, which implied 193% upside.

Chartwell Retirement Residences’ (CSH.UN-T) was downgraded to "hold" from "buy" at Canaccord Genuity. Analyst Jenny Ma kept a price target of $16 per unit. Consensus is $12.56.

Magna International Inc. (MGA-N, MG-T) was raised to "outperform" from "neu-tral" at Macquarie by ana-lyst Michael Glen with a target of $50 (U.S.), up from $43.50. Consensus is $50.57.

Painted Pony Petroleum Ltd. (PPY-T) is an "outper-form" at Raymond James. A n a l y s t J e r e m y McCrea lowered his target price for the stock to $12.50 from $14. Consensus is $9.30.

Parkland Fuel Corp. (PKI-T) is a "buy" at Canaccord Genuity. Analyst Derek Dley lowered his target p r i c e t o $ 3 2 f r o m $33. Consensus is $24.42.

Pattern Energy Group Inc.’s (PEGI-Q, PEG-T) is an "outperform" at RBC Do-minion Securities. Analyst Shelby Tucker lowered his target price to $24 (U.S.) from $25. Consensus is $30.08.

Plaza Retail REIT (PLZ.UN-T) was downgraded to “mar-ket perform” from “outper-form" by Raymond James analyst Johann Rodrigues. He maintained a target price o f $ 5 . 2 5 p e r unit. Consensus is $4.

Slate Retail REIT (SRT.UN-T) is an “outperform” at BMO Nesbitt Burns. Analyst Troy MacLean lowered his tar-get price to $12.75 from $13. Consensus is $11.99.

Yamana Gold Inc. (AUY-N, YRI-T) is an “out-perform” at RBC Dominion Secur i t ies . Analyst Dan Rollins lowered his target price for the stock to $3.75 (U.S.) from $4.50. Consensus is $4.56.

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Technically SPEAKING by Dwight Galusha

setyourstop.comDiversified Royalty (DIV-T) continues to trend higher within a series of bull flag continuation patterns. The price action appears to be resuming its journey higher as it breaks out from this pattern.

http://setyourstop.com

http://setyourstop.com


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Sandvine Corp (SVC-T) is giving a buy signal as it makes a powerful move above the 200-day moving average. With all indicators surging higher, this breakout appears to be very bullish.


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The CAPITAL IDEAS Digest is published by Capital Ideas Research Inc. The letter does not, and cannot, constitute a recommendation to buy or sell any security. By subscribing, you acknowledge that it is provided for informational purposes only and does not constitute investment advice. You also acknowledge that Capital Ideas may use the subscriber information to offer additional products and services in accordance with applicable laws. You further agree that Capital Ideas will not be liable for any losses or liabilities that may be occasioned as a result of the information or commentary provided in the newsletter. Further disclosures at www.capitalideasresearch.com/disclaimer.php

Wi-Lan Inc (WIN-T) has broken out from a bull flag continuation pattern and is now consolidating at the 200-day moving average. The SCTR ranking is attempting to make a powerful move above 75 which would place WI-Lan in the top performing quartile of TSX-listed stocks. With all indicators pointing positive, a convincing breakout above the 200-day moving average would be extremely bullish.

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