Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
RBC Capital Markets analyst Bish Koziol has added four stocks and removed four from his quantitatively driven Top 40 list. Stocks are chosen by a ranking system gauging valuations, price momentum, growth and earnings predictability.
First Quantum Minerals Ltd., Dundee Precious Metals Inc., iA Financial Corp and Magna International Inc. were removed.
RB Global Inc., Toronto-Dominion Bank, Altagas Ltd. and Bank of Nova Scotia were added.
The list as it now stands includes Canadian Natural Resources, Enerplus Corp., Cenovus Energy Inc., Imperial Oil Ltd, Trican Well Service Ltd., Pason Systems Inc., Ovintiv Inc., Suncor Energy Inc., ARC Resources Ltd., Stella-Jones Inc., Teck Resources Ltd., Labrador Iron Ore Royalty, Toromont Industries Ltd., TFI International Inc., Thomson Reuters Corp., Ritchie Bros. Auctioneers Inc., Richelieu Hardware Ltd., Finning International Inc., Loblaw Companies Ltd., Metro. Inc., North West Co. Inc., EQB Inc., Fairfax Financial Holdings Ltd., Intact Financial Corporation, TMX Group Ltd., Great-West Lifeco Inc., Bank of Montreal, Toronto-Dominion Bank, Bank of Nova Scotia, Open Text Corp., Enghouse Systems Limited, Constellation Software Inc., Celestica Inc., CGI Inc., Quebecor. Inc., Cogeco Communications Inc., Rogers Communications Inc., Altagas Ltd and TransAlta Corp.
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The global equity strategists at Morgan Stanley are expecting a big surge in merger and acquisition activity,
“The structural case is driven by dry powder, private markets, regional shifts and new innovations: 2021-23 may have seen US$4-11 trillion less activity than macro fundamentals would suggest, supporting a multi-year catch-up. Regionally, we see a ‘drought’ ending in Europe and Australia, while Japan continues a structural shift towards greater corporate efficiency and activity. Necessity and opportunity should drive more M&A in non-listed privates, where 1,200+ unicorns are currently valued at US$4 billion+ and private equity-backed names look for exits. Global listed non-financials hold US$5.6 trillion in cash while private market investors sit on US$2.5 trillion of dry powder, providing fuel for activity. And rising demand for AI capabilities, the clean energy transition, innovation in life sciences, reshoring and geographic diversification in a multipolar world should structurally support M&A over the next cycle. Which sectors? Health Care, Real Estate, Staples and Technology stand out from our analyst survey”
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Citi economists noted an improvement in global manufacturing activity, an important leading indicator for profit growth,
“The global manufacturing PMI increased in February to 50.3, its first reading above 50 since August 2022. Most of the improvement in recent months has been driven by gains in Developed Markets, although outside of the US and Spain manufacturing PMIs for major DMs are still in contractionary territory. The improvement in the global manufacturing PMI was fairly broad-based across categories with the indexes for output, new orders, and new export orders all gaining steam. The global services PMI meanwhile edged up slightly further to 52.4 and has now risen for four consecutive months”
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Diversion: “This Man Got 217 Covid-19 Shots, Is Completely Fine” – Gizmodo
Scott Barlow