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Quebecor (Christinne Muschi/christinne muschi)
Quebecor (Christinne Muschi/christinne muschi)

Eye on Equities

With expectations so low, it's time to buy Quebecor: TD Add to ...

Quebecor Inc. shares are off about 10 per cent since the start of the year, prompting one Bay Street analyst to proclaim an attractive buying opportunity has emerged.

TD Newcrest analyst Vince Valentini upgraded the stock today to "buy" from "hold", and suggested there's limited downside risk as the cable company releases its first-quarter results on Thursday.

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"We do not expect particularly strong first-quarter results on May 26, but the recent relative weakness in QBR.B shares gives us confidence that expectations are sufficiently low heading into the quarter, so we are not waiting for the results to upgrade the stock," said Mr. Valentini.

The stock has materially underperformed many of its Canadian and U.S. peers since May of last year. Meanwhile, Mr. Valentini questions why the cable sector overall has underperformed Canadian telecom stocks, as this is not consistent with what has occurred in the U.S. and does not reflect many of the competitive advantages cable companies have.

"We believe investors should take advantage of the opportunity to buy what we consider a high quality cable company at a lower multiple than either BCE or Telus," he said.

Upside: Mr. Valentini raised his 12-month price target by $2 to $42.

Management at RioCan Real Estate Investment Trust has indicated it should be able to raise distributions in 2012, underscoring its confidence of growth. The company is on pace to hit its $600-million acquisition goal for this year, noted Scotia Capital analyst Pammi Bir.

Upside: Mr. Bir raised his one year price target by 25 cents to $26.

Although Torstar Corp. has had a very good run over the past 12 months and posted somewhat disappointing results in the first quarter, TD Newcrest analyst Scott Cuthbertson believes the stock still represents good value. "We like the balance sheet, revenue mix and exposure to the advertising market, so would continue to add to positions at current levels," said Mr. Cuthbertson.

Upside: TD raised its 12-month price target by $1 to $16 and rates the stock as a "buy."

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