Here are our editors’ picks of some of the best reads of the week. (The articles are available to Globe Unlimited subscribers only.)
Big workers weighing on bottom line
With a temporary shortage of helicopters to fly workers to offshore platforms, Transocean has told employees to trim the fat that has been weighing on costs. As Carl Mortished explains in ROB Insight, it’s an issue that’s been on the radar of airlines for years as fuel costs have soared, but most have been reluctant to act on it, concerned about potential litigation and the PR implications.
A blue-light special on utilities?
The TSX utilities sector is yielding a full 3.5 percentage points above five-year government bonds, so it’s no surprise that investors have been flocking in, writes Scott Barlow in ROB Insight. What is surprising, he notes, is that utilities are not overvalued -- and what's more, they've actually become cheaper in P/E terms.
Can I get a time share on that REIT?
With Canada’s property market believed by many to be in bubble territory, you might not expect a flurry of new REITs. But the new listings the TSX is expected to see are not for domestic properties, but assets south of the border and in Europe, writes Tara Perkins in Streetwise.
To the mall! To the mall!
The Bank of Canada’s dire warnings over household spending and personal debt seem to have gotten through. It’s no longer a code-blue situation, apparently. While parsing the bank’s recent statement, ROB Insight’s David Parkinson noted that it forecast an acceleration in the economy this year fuelled by higher household spending. And there was no finger-wagging.
Gold is going up (unless it goes down)
The sorry state of the mining industry was the talk of the Prospectors and Developers Association of Canada convention this week. More than half of TSX miner listings are focused on gold, so Dundee economist Martin Murenbeeld’s forecast of a spot price breaking $2,000 (U.S.) in 2013 would have been welcome news to attendees, writes Pav Jordan in Streetwise. And while gold ETFs have been dumping the metal as the price tumbles, Gluskin Sheff economist David Rosenberg paints an even rosier picture, reiterating a price target of $3,000 in the years ahead, ROB Insight’s Scott Barlow writes. For the short term, Scott points out that a flurry of selling after a steep price decline often presages a recovery.