Every day ROB Insight delivers exclusive analysis on breaking business news and market-moving events. Streetwise offers news and analysis on Bay Street and the world of finance. Inside the Market delivers up-to-the-minute insights on market news as it develops.
Here are our editors’ picks of some of the best reads available to Globe Unlimited subscribers this week.
How tech titans can blow it
This company became the “it” stock pick for tech darlings, thanks to product innovation that turned it into a world leader with a sprawling global empire. No, it’s not Apple we’re talking about, but Sony, which has rung up annual losses in four of the past five years, but whose name was once synonymous with cutting-edge consumer electronic devices. Even narrowing its focus and jettisoning assets – unloading its splashy Sony Tower in New York must have been particularly humbling – hasn’t helped it get back on track. Could the same slide be in store for Apple? In ROB Insight, Brian Milner examines the parallels and points out that, with no new killer products on the horizon, and a recent, pricey acquisition in the form of Beats Electronics, today’s tech titan could find itself veering down the same road as the once mighty Sony.
U.S. banking’s ugly duckling
Humbled by the financial crisis and bailed out by the British government – which now owns two-thirds of the bank – Royal Bank of Scotland has been under pressure to raise capital, and has been trying for some time to unload its U.S. banking arm, Citizens Financial. But shopping it around to potential buyers worldwide yielded no offers, and now the bank is opting for Plan B: a flotation. In Streetwise, Tim Kiladze explains how the bank that nobody wants got to where it is now.
GICs’ ladder reaches higher than ETFs’
Exchanged-traded funds have in recent years won over countless devotees who used to invest in mutual funds, and so investors looking for a conservative source of fixed income have been unsurprisingly attracted to laddered bond ETFs. But as ROB Carrick shows in Inside the Market, a laddered version of the old-school GIC offers a much better return. ETFs can boast much greater liquidity, but investors who don’t need access to their cash in the short term should take a serious look at the GIC option, and he offers examples of typical returns offered by each approach that clearly demonstrate the considerable edge that GICs hold.
Manufacturing is back – sort of
It’s official: Statistics Canada this week announced that Canadian manufacturing sales have returned to pre-recession levels. But don’t pop those champagne corks just yet. Factory sales are only nominally at their 2008 level, and stripping out inflation leaves them a good 8 per cent short – not to mention the six years of lost growth. And the recovery has been far from even, with expansion focused on a few sectors while other traditional engines of growth lag far behind. But there’s a brighter note that stands out in the report, writes David Parkinson in ROB Insight, that is a likely harbinger of rising production and hiring.
Canadian Mint enjoys silver’s tarnish
When your production output soars 2,000 per cent in nine years, any decline in the cost of your main input makes it well worthwhile to stock up. And that’s just what the Royal Canadian Mint did in 2013, boosting its silver reserves and increasing its manufacture of silver coins by 60 per cent after the metal price sank by 24 per cent. In Streetwise, Rachel Younglai looks at the market for investment coins and how the Mint and its U.S. counterpart are taking advantage of the demand.
Cashing in on the U.S. consumer
When the 2008 financial crisis sideswiped the American consumer, Canadian shoppers marched bravely on, keeping the tills ringing while their household debt levels continued to rise. Now the shoe’s on the other foot, after U.S. households wrestled their debt down to record lows and are seeing wage growth start to kick in. And that means two separate and distinct trends are forming for consumer discretionary stocks. In Inside the Market, Scott Barlow takes a look at the U.S. retail sector, and noting how consumers are notoriously fickle, focuses on the stocks with the most attractive valuations.