Value investors should buy Potash Corp., says Raymond James

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Inside the Market's roundup of some of today's key analyst actions

Long-term, value-oriented investors should buy shares of Potash Corp. of Saskatchewan Inc., said Raymond James analyst Steve Hansen.

The potash producer has a "formidable competitive position, leverage to improving potash markets, and potential for significant free cash flow to be returned to shareholders," he wrote in a research note.

The company had a rough fourth quarter, as "protracted potash negotiations with India and China" temporarily paralyzed the market, sending prices and sales lower. "Despite lingering challenges, 2013 is expected to be a year of recovery for global potash shipments, an opportunity for the nutrient to step out from the shadows," he said, adding: "Several recent market observations give us reason to be optimistic about such a recovery."

Upside : Mr. Hansen rates the stock "outperform" and reduced his target price to $48 (U.S.) from $50.

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Dundee International REIT has acquired a 1.5-million-square-foot portfolio of office properties in Germany's largest markets for $568-million.

"Not only is the transaction accretive to the REIT's cash flow, but it continues the process of 'high-grading' the REIT's portfolio from its original IPO properties," commented M Partners analyst Brendon Abrams.

The "announcement was yet another example of why we believe DI is uniquely positioned with the access to capital to take advantage of the wider spreads on acquisitions available in Germany relative to Canada," he added.

Upside: Mr. Abrams maintained a "buy" recommendation with an $11.50 price target.

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Rocky Mountain Dealerships Inc.'s recent acquisition of Murray's Farm Supplies should be "slightly accretive," said Canaccord Genuity analyst Neal Gilmer.

"While not a substantial acquisition that materially affects our financial outlook on Rocky, it further highlights that it continues to execute on its stated strategy of growing its presence across Western Canada through acquisitions," he wrote in a research note. "We expect Rocky to continue to improve gross margins as it improves upon the acquired location margins while also gradually improving its selling, general and administrative expenses as a per cent of revenue."

Upside : Mr. Gilmer rates the stock "buy" and raised his target price to $14.75 (Canadian) from $13.50.

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Raymond James analyst Theoni Pilarinos downgraded McCoy Corp. to "market perform" from "outperform," citing the recent stock price appreciation that has left it at 52-week highs. He also notes that there are some signs of a softer North American market for industrial equipment to the resource industry.

"Some of McCoy's major customers, including NOV, Schumberger, and Halliburton, cited lower U.S. land activity and weaker pricing as headwinds in their most recent quarterly results," he said.

Upside: Mr. Pilarinos maintained a $5.50 price target.

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BMO Nesbitt Burns analyst David J. Chiaverini downgraded Invesco Ltd. to "market perform" from "outperform" given the stock's recent appreciation.

"While valuations for asset managers have increased this year with the overall market, we believe the relative valuation for Invesco makes it a less compelling opportunity, and we prefer a better entry point for new money," Mr. Chiaverini said.

Upside: Mr. Chiaverini maintained a price target of $29 (U.S.)

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