Iron ore mining in Labrador
Labrador Iron Ore Royalty Corp. is a low-risk way to play the iron-ore sector, providing investors with steady cash flow and growing production, CIBC analyst Ian Parkinson said.
"With a 2-for-1 stock split, hopefully the shares will find increased liquidity and investor interest," he wrote in a research report. He expects total distributions to shareholders of $3.78 in 2011, with the bulk being announced in the fourth quarter as part of a special dividend.
Upside: Mr. Parkinson, who has a "sector outperform" rating on Labrador, said the stock's current valuation compared to its peers is justified, given the operation's long operating history and scalability. His split-adjusted price target is now $47.00.
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SNC-Lavalin Group Inc.'s decision to buy the commercial division of Atomic Energy of Canada Ltd. is aligned with the company's goal of pursuing growth in nuclear power while minimizing balance-sheet risk, Raymond James analyst Frederic Bastien said.
"Notably, under the terms of the transaction, Ottawa would be on the hook for any cost over-runs associated with existing projects," he wrote. He noted that Ontario's government still plans to add two new reactors at its Darlington site, and "there is a large fleet of Candu reactors operating in Canada and abroad that could potentially provide lucrative servicing opportunities to SNC-Lavalin."
Upside: "We remain constructive on SNC-Lavalin," Mr. Bastien said, citing the engineering giant's growing presence in key emerging markets, the breadth of its infrastructure operations, its Canadian hydroelectric power projects, and its leading position in the global mining and metallurgy sector. He rates the stock "outperform."
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Amdocs is likely to succeed in its bid to take over Bridgewater Systems Corp., which makes Bridgewater's stock more attractive, RBC Capital Markets analyst Mike Abramsky said.
The all-cash offer has shareholder and management support and provides a good fit with Amdocs, which provides Internet and mobile billing services and customer care, he wrote in a research report. Other bidders are unlikely, he said.
Upside: Mr. Abramsky raised his rating on Bridgewater to "sector perform" from "underperform." He has a $8.20 price target on the stock.
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Crocotta Energy Inc. announced a "significant" increase to its Bluesky acreage, where it will drill two horizontal wells for liquids-rich natural gas, Acumen Capital Research analyst David Doig said.
One well will be drilled by the fourth quarter of 2011 and the second by the first quarter of next year. The Calgary-based energy producer now has identified a total of 28 locations at the Alberta site.
Upside: Mr. Doig raised his price target on the stock to $4 from $3.40 and rates it "buy."
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NovaBay Pharmaceuticals Inc.'s decision to raise money by issuing stock and warrants will increase the number of shares outstanding by about 20 per cent, Desjardins Securities analyst Pooya Hemami said.
The offering will raise about $5.2-million (U.S.), partly to fund research and development, now that NovaBay has discontinued its collaboration with Alcon on a drug for epidemic keratoconjunctivitis, he said.
Downside: The dilutive effects on the current shareholders are likely to be negative for the stock, Mr. Hemami said. He placed his target price, previously $2.25, under review and has a "hold" rating on the stock.
Sonali Verma