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Progressive Waste Solutions is no garbage stock

Garbage in dumpster

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There may be hidden treasure in Progressive Waste Solutions Inc.'s stock.

The sell-off in shares of the waste management firm on concerns of a "price war" in the industry are unwarranted, suggests RBC Dominion Securities analyst Walter Spracklin. With the firm and its peers trading at historical lows, "we believe a contrarian view will be well rewarded," he added.

"Perceptions have molded a new sentiment that is somewhat disconnected with reality," Mr. Spracklin said Wednesday in a note to clients. "While there are competitive pressures within the industry, magnified by still volatile macro conditions, we believe that the pricing dynamic prevailing is within the normal confines of the industry."

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While concerns remain over pricing, the companys has posted "well over eight consecutive quarters of core pricing growth" in both the Canadian and U.S. markets, he said. While the firm's north-east U.S. market division is weak, it represents only 15 per cent of the firm's total business.

Upside: He upgraded his rating to a "top pick", but maintained a one-year target of $25 a share.


Shares of Bell Aliant Inc., the regional telecom company, which is 43-per-cent indirectly owned by BCE Inc., have "limited downside" following the recent sell-off, said TD Securities analyst Vince Valentini. Bell Aliant has a 7.7-per-cent dividend yield, while it annual dividend of $1.90 a share is "stable," he said.

Upside: He upgraded his rating to "hold" from "reduce," but maintains a one-year target of $25 a share.


Mainstreet Equity Corp.'s move to enter the U.S. market by taking a 10-per-cent stake in a $75-million fund it is creating to acquire multi-family and other real estate properties is "the most conservative way" to buy distressed assets, said Dundee Securities analyst Brad Cutsey.

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Upside: He maintains his "buy" rating with a one-year target of $30.75 a share.


Shares of Wajax Corp., an industrial equipment distributor, are "compelling" after falling from its May 52-week high, said M Partners analyst Tom Varesh. Its stock, which has a 6.8-per-cent yield, pays a monthly dividend of 27 cents a share ($3.24 annualized) that could possibly be increased next year, he added.

Upside: He upgraded Wajax to a "buy" rating from a "hold," but maintains his one-year target of $54.25 a share.


Canadian Natural Resources Ltd. shares are "oversold" to the tune of at least $4 a share, suggested TD Securities analyst Menno Hulshof. The weakness is partially related to the shutdown of its Horizons oil sands plant for five weeks in the first quarter and weaker commodity prices, he said.

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Upside: He maintains his "action list buy" rating, and one-year target of $46 a share.

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