Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
RBC Capital Markets head of global energy research Greg Pardy made two changes to his Global Energy Best Ideas list of stock picks, removing Neste Oil Oyj and Spain’s Repsol SA,
“In March, the RBC Global Energy Best Ideas List was up 7.2% compared to the iShares S&P Global Energy Sector ETF (IXC) which was up 8.9% and a hybrid benchmark (75% IXC, 25% JXI – iShares Global Utilities ETF) that was up 8.1% on a sequential basis. Since its inception in February 2013, the RBC Global Energy Best Ideas List is up 186.5% compared to the S&P Global Energy Sector ETF up 39.5%”
The stocks remaining on the list are BP, Suncor Energy, Obsidian Energy, Topaz Energy, Diamondback Energy, Permian Resources Corp., ARC Resources, Tourmaline Oil, Canadian Natural Resources, MEG Energy, Santos Ltd., Enerflex Ltd., Pason Systems, SLB, Altagas Ltd., Pembina Pipeline, Archrock Inc., Energy Transfer LP, Northland Power, Superior Plus and PG&E Corp.
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TD Securities recently held a conference for infrastructure services stocks, a sector where income investors often look for opportunities,
“There were several notable themes that emerged and were evident throughout many of the conference’s sessions. These included the following: Overall, end-market demand outlook commentary was favourable, with most companies seeing relatively healthy market conditions across focus areas. Continued positive commentary regarding the outlook for infrastructure investment across numerous key regions (including the U.S., with IIJA-related activity still ramping up). Favourable outlook for activity associated with energy transition and the broader environmental sector … In the nearer term, our constructive stance is supported by strong backlogs at most companies, and what we see as generally favourable end-market demand trends … Among our covered E&C/Infrastructure Services names, we have BUY ratings on ATRL [SNC Lavalin], BDT [Bird Construction], STN [Stantec], and WSP [WSP Global Inc.]. Meanwhile, among the Equipment Distributors we cover, we have BUY ratings on TIH [Toromont Industries] and WJX [Wajax Corp.]. "
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BMO chief investment strategist Brian Belski is seeing his bullishness on domestic stocks paying off,
“The S&P/TSX gained 3.8% on a price return basis in March, outperforming the S&P 500 for the first time since September 2023. Interestingly this is the first time the TSX has outperformed the S&P 500 in a month of positive returns since April of last year. Indeed, from our perspective we are starting to see the early signs of a broadening out of performance, which we have consistently argued will be a key tailwind for Canadian equities in the second half of the year. While gold stocks and Energy were key drivers of performance, most sectors saw positive returns this month … Canadian growth and growth expectations have clearly diverged from the US. The S&P 500 is set to post double-digit earnings growth this year, while the TSX is now expected to post only modest single-digit growth. Yes, while the slowing resource sectors growth is playing a major role in this divergence, our work shows the spread between the TSX and SPX earnings growth has reached an extreme. In fact, our blended EPS growth model for the TSX and SPX is at the widest spread since 2010″
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Diversion: “Man pleads guilty to stealing coworker’s identity for 30 years” – Ars Technica (soft paywall)
Scott Barlow