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Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

RBC Capital Markets analyst Pammi Bir featured four REITs in the 2024 New Year Preview – REITs report,

“Chartwell Retirement Residences … Investment case: We’re increasingly constructive on Chartwell as the benefits of its operational changes and pent-up demand are becoming more readily visible. We expect earnings growth to accelerate in 2024, supported by mid-teen, same-property NOI growth from further occupancy advances, fading expense pressures (including agency staffing costs), and improving margins… Dream Industrial REIT … We believe DIR remains well positioned to deliver above-average earnings growth from a combination of solid organic NOI [net operating income] advances (including a substantial mark-to-market opportunity on in-place rents), accretive Summit JV related investments, and developments. Coupled with a discounted valuation, we see an attractive entry … Killam Apartment REIT … Nova Scotia’s 5-per-cent rent cap increase is the largest amongst the provinces in 2024″

Canadian Apartment Properties is the fourth feature but no commentary was provided.

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BMO chief strategist Brian Belski is cautious on commodity sectors and underweight Canadian industrials,

“We acknowledge the difficulty of staying underweight Energy and Materials amid significant valuation discounts and the potential for a catch-up trade in these sectors, so we have chosen to maintain an underweight position in the Industrial sector. Indeed, we believe the global commodity headwinds and easing inflationary pressures are likely to filter down into the Industrials sector this year… We expect commodity prices to remain choppy in 2024, particularly as inflationary pressures ease. As such, we believe this will be a key headwind to the commodity sectors which will likely filter down to the Industrial sector, which is also positively correlated with commodity prices. · The ISM purchasing mangers index has been below 50 since the end of 2022. According to our work, this index tends to lead Industrial earnings growth by up to 12 months suggesting the sector will likely experience a significant slowdown in earnings momentum throughout the year”

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BofA Securities analyst Justin Post identified five themes in internet commerce for 2024 and listed top picks,

“we have identified five themes that could impact Internet performance. These includes: 1) Growing role of Artificial Intelligence; 2) Ramp in Social & eCommerce deals; 3) Normalization of the reopening effect on retail spend; 4) Faster deliveries or “insta-commerce” and, 5) the US election outcome… For risk-on stocks, with positive FCF yield we generally favor: 1) share gainers in their sectors, 2) potential top line beneficiary of lower rates (home improvement, real estate, Cloud etc), 3) margin growth potential from current levels (street needs reason for upside optimism), and 4) valuations at/below historical averages and/or well below 5- year highs. Top stocks: Amazon, Pinterest, Wayfair, Vivid Seats, DoorDash, and Applovin”

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Diversion: “There’s Been a Staggering Increase in People Killed by Fungi Every Year, Study Finds” – Gizmodo

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