H RC A SE

Transcription

H RC A SE

EQUITY RESEARCH
CANADIAN RESEARCH AT A GLANCE
October 20, 2014
Price Target Revisions
! Finning International Inc.
! Walter Energy Inc.
Summary
See compelling growth despite softer commodities; reiterate Outperform
Summary
Q3/14 Preview: Expect coal market weakness to continue to weigh on Walter's results
Summary
Executing upon a measured growth-by-acquisition program; reiterating the Outperform
Summary
For the week of October 10–17, 2014
Company Comments
! Milestone Apartments REIT
Industry Comments
! Canadian Equity Coverage Alert
! Canadian Financials Weekly
! Energy Infrastructure Weekly Stats
! Global Oilfield Services
! RBC Canadian Energy
! RBC European Utilities
! RBC International E&P Daily
! Swedish Banks
Summary
Summary
Summary
Volatility persists as 3Q reporting begins
Summary
Junior/Intermediate E&P: Weekly Review and Valuation Tables
Summary
Regulated Utilities: Q3/14 Earnings Preview
Summary
PPC; GENL; SMDR; FAR; PRE
Summary
Mortgage market in focus
Quantitative Research
! Benchmarks
! What's In Style - S&P/TSX Composite
! What Moved the Market
Summary
Summary
Summary
Technical Research
! Are we there yet? – Preconditions for Summary
!
a trading rebound in place – Part II
Near-term retest of recent lows
likely.
Summary
Pending weakness an opportunity to accumulate Lumber.
! - Action-Oriented Research
Priced as of prior day's market close, EST (unless otherwise noted).
For Required Non-U.S. Analyst and Conflicts Disclosures, see Page 11.
EQUITY RESEARCH
U.S. RESEARCH AT A GLANCE
October 20, 2014
Initiations
! CONE Midstream Partners, LP
Summary
Initiating coverage: Marcellus marriage
Summary
Downgrading to Sector Perform
Summary
Yes, Virginia…there are Enterprise clients out there
Summary
3Q EPS $0.82 (core ~$0.79) - Decent performance in difficult environment
Summary
3Q Preview - Focus Shifting to 2015 Rig Demand
Summary
Expecting an in Line 3Q; Focus Shifts to '15 Activity
Summary
3Q'14: LNG projects show the way
Summary
Post Management Meeting Highlights
Summary
Q3/14 Preview: Expect coal market weakness to continue to weigh on Walter's results
Summary
Abstract released – GED-0301 efficacy impressive and looks better than other drugs
Summary
Recent US price increase helping Q3 and may help Q4 a bit too - Sector Perform
Summary
Second Quarter Preview
Summary
Expecting 3Q to Hit High End of Guide
Summary
Dark (roast) before the dawn; Outperform
Summary
Thoughts into Sept-Qtr Call (10/20) and Cheat Sheet. Focus On Macro, Backlog & FCF
Summary
Is 2015 the turnaround year?
Summary
F1Q15 Earnings Preview
Summary
Third Quarter Preview and Cheat Sheet
Summary
Q3/14 Preview: Weaker pricing expected to weigh on results
Summary
Third Quarter Preview and Cheat Sheet
Summary
Q3 Preview & Cheat Sheet
Summary
3Q14: Another Solid Quarter
Summary
Deal Spread Has Blown Out Post AbbVie/Shire. Risk/Reward Is Now More Favorable.
Summary
3Q EPS $0.19 (core ~$0.17); Regional bank performance continues to improve
Summary
3Q14- Strong Operations + Tax = Another Strong Quarter
Summary
3Q core EPS ~$0.20: The focus remains on producing positive operating leverage
Summary
3Q14: At Times Even Babe Ruth Struck Out
Ratings Revisions
! Rolls-Royce Holdings PLC
! athenahealth, Inc.
! Comerica Incorporated
! Nabors Industries Inc.
! Patterson-UTI Energy
! Santos Limited
! Schlumberger Limited
! Walter Energy Inc.
First Glance Notes
! Celgene Corp.
! Pharmacyclics, Inc.
Earnings Preview
! CA Inc.
! Core Laboratories
! Dunkin' Brands Group, Inc.
! IBM
! McDonald's Corporation
! Microsoft Corporation
! ServiceNow, Inc.
! Vale
! VMware, Inc.
! Yahoo! Inc.
Company Comments
! CoBiz Financial Inc.
! Covidien plc
! First Horizon National Corp.
! Honeywell International Inc.
! Huntington Bancshares Inc.
! M&T Bank Corporation
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EQUITY RESEARCH
! Morgan Stanley
! Northwest Bancshares, Inc.
! SunTrust Banks, Inc.
! Textron Inc.
! Bank of New York Mellon
! Western Alliance Bancorp
! Wintrust Financial
Summary
Solid progress continues
Summary
3Q14: Credit quality improvement and loan growth shine
Summary
3Q14: Getting Back Into Playing Shape
Summary
3Q14 - Aviation brightens
Summary
3Q14: Fee Revenue Growth Leads the Way
Summary
3Q14: Another Strong Beat
Summary
3Q EPS $0.79 - Decent quarter highlighted by an improving mortgage environment
Summary
Rollers Coaster: US A&D > Europe
Summary
3Q14 Earnings Preview
Industry Comments
! A&D PRISM
! Acute Care Hospitals
! Building products – Small cap stocks
!
!
Summary
that you can buy today
Building products - updating price
Summary
targets
Connectors: What is the impact from Summary
recent automotive data?
Discontinuing Research Coverage
Summary
!
! Energy Infrastructure Weekly Stats
! H8 Update: Loans down in Second
Week of 4Q
HPC, Beverages, and Tobacco
A look at our favorite small cap ideas following the recent sell-off
Raising price targets on DOOR and PGTI
Implications for APH, TEL, and ST on Production and Europe Registration Data
CLH, CFX, DOV, EMR, FLS, IR, MINI, PH, RBC, RBA, ROK, WTS
Summary
Summary
!
! Insurance Observations
! Internet Q3 Small Cap EPS Preview
! Nexus.One
! RBC European Utilities
! RBC International E&P Daily
! Slightly Positive September
Summary
Lean into the Wind
Summary
For the week of October 20th
Summary
Our View: Q3 EPS Preview for the Small Cap 'Net Stocks
Summary
Through October 17, 2014
Summary
Summary
Summary
September comScore eCommerce Results
!
! Telecom & Tower Update and
Summary
eCommerce Datapoints
Swedish Banks
Summary
Earnings Preview
Investment Strategy Research
! Earnings Flash - October 20, 2014
Summary
! Q-Tips: Highlighting Quantitative
Summary
October 2014 Sector Model Update
Summary
A Look at the RAI/LO Deal Spread
Themes
In-Depth Reports
! Reynolds American, Inc.
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EQUITY RESEARCH
UK & European Research at a Glance
October 20, 2014
Ratings Revisions
! Rolls-Royce Holdings PLC
Summary
Downgrading to Sector Perform
Summary
Q3/14 preview: we expect a reassuring statement
Summary
Expecting 3Q to Hit High End of Guide
Summary
3 key questions ahead of the Investor Day
Summary
Targets still look a stretch
Summary
CLH, CFX, DOV, EMR, FLS, IR, MINI, PH, RBC, RBA, ROK, WTS
Summary
Inside-Out Consolidation
Summary
! Schroders Plc
Earnings Preview
! Core Laboratories
Company Comments
! Hannover Re
! Imagination Technologies Group
Industry Comments
! Discontinuing Research Coverage
! Norwegian Telcos
! Swedish Banks
Find our Research at:
RBC Insight (www.rbcinsight.com): RBC's global research destination on the web. Contact your RBC Capital Markets' sales representative to
access our global research site, or use our iPad App "RBC Research"
Thomson Reuters (www.thomsononeanalytics.com)
Bloomberg (RBCR GO)
SNL Financial (www.snl.com)
FactSet (www.factset.com)
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Finning International Inc.(TSX: FTT; 27.39)
Sara O'Brien, CFA, CA (Analyst)
(514) 878-7256; [email protected]
Juliane Szeto (Associate)
34.00
Rating:
Price Target:
52 WEEKS
18OCT13 - 10OCT14
See compelling growth despite softer commodities; reiterate Outperform
We believe FTT is on track to long-term sustainable profit improvement from its
Canadian action plan. In the current soft commodity market, we have moderated
our earnings expectations but we continue to see earnings growth ahead, barring
a further significant commodity correction. We believe FTT will see a permanent
positive multiple rerating as it continues to show profit improvement. We rate FTT
shares Outperform.
32.00
30.00
28.00
26.00
24.00
4000
3000
2000
1000
2013
N
O
D
J
Close
F
M
A
2014
M
J
J
A
S
O
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
EPS, Ops Diluted Prev. P/E Ops Diluted
2013A
1.94
14.1x
2014E
2.00
13.7x
2015E
2.34↓
2.40
11.7x
2016E
2.54↓
2.67
10.8x
All values in CAD unless otherwise noted.
• Recommend buying FTT, continue to see earnings growth despite weaker
commodities. We believe FTT has over-corrected on the basis of fallen
commodity prices. Our analysis shows low correlations of FTT results to
commodities historically, and from an economic perspective we continue to see
FTT well positioned to drive internal earnings gains from its Canadian Action plan
and stability to improvement in Chile. Our new FTT estimates for F15/F16 are
$2.34/$2.54, down from prior $2.40/$2.67; this drives our new $35 price target
(from $37). With FTT shares down close to 20% since early September and our
outlook for solid earnings growth, we believe investors should buy FTT.
• Closer look at Chile: positive outlook for mining production and construction.
Chile does show a positive economic outlook, including for both mining
production and construction. We expect FTT to maintain its current sales level in
FINSA and its high-10% range EBIT margin.
• Sensitivity analysis: product support drives greatest impact, remains on solid
footing. Given concerns re global economic outlook and potential negative
impact on FTT earnings, we have run sensitivities on FINSA re new equipment
and product support change impact on EBIT dollars and margin. We note that
our downside scenario for FTT is consolidated sales decline of 10% in F15 and
EBIT margin flat with 2014 at 7.6%, which would drive a low EPS of $1.82 or a
9% decline from our F14 $2.00 estimate. Our base case F15 EPS of $2.34 shows
YoY growth of 17%.
Walter Energy Inc.(NYSE: WLT; 1.91)
Fraser Phillips, P.Eng. (Analyst)
Melissa Oliphant (Associate)
416 842 4126; [email protected]
18.00
16.00
14.00
12.00
10.00
8.00
6.00
Outperform
35.00 ▼ 37.00
52 WEEKS
25OCT13 - 13OCT14
Rating:
Sector Perform
Risk Qualifier: Speculative Risk
Price Target: 2.50 ▼ 6.00
Q3/14 Preview: Expect coal market weakness to continue to weigh on Walter's
results
We forecast Walter's Q3/14 EBITDA to decline slightly QoQ. With benchmark coal
prices unchanged, we expect Walter's focus on operating cost reductions will
mitigate the effect of lower sales volumes.
4.00
2.00
40000
20000
O
N
2013
D
Close
2013A
2014E
2015E
2016E
J
F
M
A
2014
M
Rel. S&P 500
EBITDA, Adj Prev.
143.4
39.7↑
37.9
124.9↑
123.3
117.8↓
127.5
All values in USD unless otherwise noted.
J
J
A
S
MA 40 weeks
O
• EBITDA expected to decline QoQ: We forecast EBITDA of $3.93M this quarter,
above consensus of $3.39M but slightly below adj. EBITDA of $5.20M in Q2/14
due to 14% lower met coal sales volumes in light of transportation issues and
poor market conditions.
• Sales affected by transportation disruption: Walter lowered 2014 met coal
sales guidance from 10.5-11.5Mt to 9.5-10.5Mt with Q2 results. The firm that
transported coal from the Brule mine was placed into receivership in June,
affecting Walter's ability to process and sell from inventory. In July Walter was
processing coal at one third of capacity, but this rate had improved by September
as alternative transportation providers were engaged.
5
• Outlook for Canadian operations: Walter began idling its Canadian operations
in April. The company anticipates idle mine costs of $5-10M per quarter, and is
exposed to take-or-pay charges of up to $24M per year. Walter guided for a total
of $10M in take-or-pay for 2014 and plans to attempt a force majeure defense
to avoid the charges; we estimate that take-or-pay will amount to $11.5M this
year and $20.5M next year.
• Liquidity improved in Q2, but we expect negative cash flow beginning in 2015.
• Coal market remains oversupplied but prices appear to have found a bottom
over the last six months and we look for a modest improvement next year as
production curtailments take effect.
• Reporting details: Walter will report Q3/14 results on October 30, 2014
before market open. A conference call webcast will follow at 10AM ET at
www.walterenergy.com.
Company Comments
Milestone Apartments REIT(TSX: MST.un; 11.26)
Neil Downey, CFA, CA (Analyst)
Leslie Cho, CPA, CA (Associate)
Michael Smith, CFA (Analyst)
Kevin Cheng, CFA (Associate)
52 WEEKS
Rating:
Price Target:
Outperform
12.50
Executing upon a measured growth-by-acquisition program; reiterating the
Outperform
18OCT13 - 10OCT14
11.50
11.00
10.50
As a well-managed owner/operator of a sizable rental portfolio located across
12 higher growth, predominately "sun belt" markets, we believe Milestone
Apartments REIT (MST) offers interesting income and capital growth potential,
effectively in US$. This note provides a corporate update on the heels of a recently
completed equity financing that will fund two pending property acquisitions. We
reiterate our C$12.50 price target and Outperform rating.
10.00
9.50
2000
1000
O
2013
N
D
J
Close
F
M
A
2014
M
J
J
A
S
O
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
FFO/Unit
2012A
2013A
2014E
2015E
0.81
0.99
1.00
All market data in CAD; all financial data in USD; dividends paid in
CAD.
• Pending acquisitions of $115MM – MST should shortly close the acquisition
of the Villas at Shadow Creek, Houston (560 suites/$74MM) and The Village
at Legacy Ridge, Denver (221 suites/$41MM). We view the two purchases as
good quality, in-fill acquisitions within existing MST markets. They provide a suite
mix that is complementary to existing properties and should be easily absorbed
into regional infrastructure. The blended going-in cap rate on the transactions
is ~6.4%, and each will be financed with long-term fixed rate mortgages upon
closing.
• C$115MM equity financing increases float by a sizable 34% – Earlier this week,
MST completed the issuance of 10MM trust units priced at C$11.50 each. The
financing is economically a C$60MM treasury offering and a C$55MM unit sale by
Milesouth (via unit redemption). The unit redemption has reduced Milesouth's
stake to 27% from 38% and increased MST's float by a sizable 34% (now 39.5MM
units worth C$445MM versus C$332MM formerly).
• Issuing at a discount theoretically trims ~2% from our NAV/unit estimate –
Issuing equity at C$11.50/unit results in net proceeds to MST (net of fees and
fx) of $9.72/unit. The net price is 21% below our $12.25 NAV and hence the
transaction should trim ~2% ($0.21/unit) from our NAV. We’ve not formally
adjusted, pending the release of Q3/14 results on Nov-6th.
• C$12.50 price target and Outperform rating reiterated – Our underlying
constructive thesis on MST is intact. Our C$12.50 one-year price target continues
to offer what we see as an attractive risk-adjusted return equation.
Industry Comments
RBCCM Global Research
Canadian Equity Coverage Alert
For the week of October 10–17, 2014
6
• Canadian Equity Coverage Alert is a weekly product that summarizes changes
made to ratings and price targets for companies under coverage, in addition to
highlighting initiations and discontinuation of research coverage.
Darko Mihelic, CFA (Analyst)
Geoffrey Kwan, CFA (Analyst)
Canadian Financials Weekly
Our weekly review of the performance and valuation of Canadian financial stocks.
Brendon Sattich (Associate)
Charan Sanghera (Associate)
Vivek Selot (Analyst)
Vanessa Wan (Associate)
Robert Poole (Analyst)
Robert Kwan, CFA (Analyst)
Nelson Ng, CFA (Analyst)
Energy Infrastructure Weekly Stats
• Valuation tables, power price and frac spread data, relative price performance,
and ex-dividend dates.
Kelsey Roste (Associate)
Michelle Zuliani (Associate)
Kurt Hallead (Analyst)
Global Oilfield Services
Dan MacDonald, CFA (Analyst)
• US Oilfield Services: OFS stocks are down roughly 20% since the end of 2Q,
matching oil roughly percent for percent. The drop in OFS stock prices tells us
that investors are expecting downward EPS revisions for 2015/16. Today, SLB gave
investors reasons to be less concerned over activity declines next year with a
positive outlook on their conference call, but we expect near term stock action
to be dictated by oil prices.
• Canadian Oilfield Services: Commodity prices continued to drive stock
performance this week, although after lows were reached mid-week we did
see bargain hunting emerge among some institutional investors, coinciding with
modest oil price stability. Third quarter results from U.S. and international
OFS companies are beginning to trickle in and provide some read-through
information for the Canadian firms given a strong operating environment being
seen in both the U.S. and Canada, although all the focus remains on E&P capital
budgets, which will be determined over the next few months. Canadian earnings
reporting will start in 10 days with Precision Drilling.
Robert Pinkard (Analyst)
Peter Knerr (Associate)
All values in CAD unless otherwise noted.
Volatility persists as 3Q reporting begins
Michael Harvey, P.Eng. (Analyst)
RBC Canadian Energy
Mark J. Friesen, CFA (Analyst)
News Items Last Week
Eric Gallie (Associate)
Shailender Randhawa, CFA (Analyst)
Junior/Intermediate E&P: Weekly Review and Valuation Tables
• Tamarack Valley – Operations Update. Tamarack provided an update on its
current production and Wilson Creek activities. The company is currently
producing 7,400 boe/d excluding 550 boe/d production shut-in for third party
pipeline maintenance which, in our view, leaves it in a good position to achieve
its exit production guidance of 9,500 boe/d. Also, Tamarack added 10.5 sections
7
Keith Mackey, CFA (Associate)
to build its Cardium inventory at Wilson Creek through farm-ins and minor land
purchases. See note here.
Maurice Choy (Analyst)
+44 207 653 4198; [email protected]
RBC European Utilities
John Musk (Analyst)
Defensive nature of Regulateds reinforced
Martin Young (Analyst)
• Following concerns of a weaker global economy, lower inflation pressures and
low wage growth, investors have reassessed economic outlooks and the resulting
market sell-off saw a general rush towards safer assets. The European utilities
index(SX6P) and the DJSTOXX Europe 600 (SXXP) have both declined by 7%-8%
since the end of September. Meanwhile, the Regulated Utilities fell by roughly
half of that rate at -4%; we believe this outperformance very much reinforced
the defensive nature of the Regulateds.
Potential for a sustained period of low rates?
All values in EUR unless otherwise noted.
• With the potential for interest rates and GDP growth to remain low longer than
previously expected, we see it as an ideal time for investors to revisit what these
mean for the eight European regulated utilities within our coverage. We maintain
our Outperform for Pennon and Snam.
Q3/14 or HY 2014/15 Preview
• In this report, we review the performances of the eight Regulateds against the
broader European and infrastructure indices, look at historical multiples, and
preview their upcoming Q3/14 or HY 2014/15 earnings, sorted in alphabetical
order.
Nathan Piper (Analyst)
RBC International E&P Daily
Al Stanton (Analyst)
PPC.L: Lapacho makes potentially commercial oil/condensate discovery; GENL.L:
Encouraging Signs Offshore Morocco; SMDR.L: Update on SONA Transaction;
FAR.AU: Completes $46.7m fundraising for drilling offshore Senegal; PRE.TO: MoU
Signed with PEMEX
Victoria McCulloch, CA (Analyst)
Haydn Rodgers, CA (Associate)
All values in USD unless otherwise noted.
Adrian Cighi, CFA (Analyst)
Swedish Banks
Mark Burrows (Associate)
044 020 7002 2258; [email protected]
• We do not change our estimates for the Swedish banks in this note, as we feel
any changes would be at best marginal ahead of Q3 results. Among Swedish
banks, ahead of Q3 results, we reiterate our preference for corporate focus
banks SEB (Outperform, PT SEK99) and Nordea (Sector Perform, PT SEK98) over
their more retail focused peers Swedbank (Sector Perform, PT SEK173) and SHB
(Underperform, PT SEK315).
• In addition, we expect four themes to dominate the Q3 results: 1. capital return
– can more be done to repatriate capital? 2. Mortgages – what is the outlook for
margins and how much repricing can we expect? 3. Corporate activity outlook
remains resilient in the near term but can this continue? 4. Swedish banks – a
place to hide (again)?
All values in EUR unless otherwise noted.
Chad McAlpine, CFA (Analyst)
Bish Koziol (Associate)
Benchmarks
At the beginning of each week, this report summarizes the recent performance of
the most commonly tracked North American benchmark indices.
8
Also presented are the returns of the sectors and major industry groups of the S&P/
TSX Composite over the same periods.
To better understand the relative performance of different investment strategies
over time, RBC has created and maintains style-specific composite indices.
What's In Style - S&P/TSX Composite
• What’s In Style highlights the 15 best-ranked stocks in the S&P/TSX Composite
based on our Value, Growth, Momentum and Predictability style-composite
models.
• Included in each of the four summary tables presented in this report are select
fundamental metrics such as forward looking price-to-earnings, price-to-book
and forecast earnings growth.
• Additionally, an indication is given when a company ranks in the top 15 positions
of the index based on more than one investment discipline.
What Moved the Market
This report highlights the performance contribution of each of the sectors of the
S&P/TSX Composite to the overall index during the prior week.
Stocks that have had the most positive and negative influence on the Canadian
Market last week can be easily identified, and their impact measured.
Large movements in the prices of both sectors and their equity constituents can
potentially highlight trading opportunities.
Technical Research
Robert Sluymer, CFA (Analyst)
Anna Drotman (Associate)
Javed Mirza, CFA, CMT (Analyst)
Are we there yet? – Preconditions for a trading rebound in place
– Part II
• NEW DAY, SAME STORY - In Thursday morning’s note, we highlighted that the
preconditions for a trading low were developing but meaningful evidence of
a sustained low was still MIA. Yesterday’s rally was a positive step technically,
but it did not meaningfully change our overall view. Today's note reiterates the
preconditions supporting a trading rebound.
• While a trading opportunity is likely underway, technical damage remains in place
with multi-year uptrend breaks accompanied by lower highs and lows in place
for most European, Small-cap and Cyclical indexes. From a technical perspective,
these trend breaks should not be trivialized 5-years into a bull market.
• IDEAS - Healthcare: BMRN, INCY, CBST - Industrials/Transports: JBHT, CHRW,
KSU, JBLU, UAL, ROP, PCAR, HXL, CMI - Chemicals: SHW, APD - Discretionary:
NKE, SKX, DECK
Near-term retest of recent lows likely.
Pending weakness an opportunity to accumulate Lumber.
SUMMARY
• The intermediate-term quadrant balance data for both the TSX and the S&P
(pp. 4–5) are at oversold levels that historically have coincided with multi-month
rallies over the last three years. The next step in the bottoming process is a
reversal day on high volume, which has yet to appear. For those looking to deploy
capital, we would continue to WAIT for a reversal day as further evidence that
an intermediate-term low is being forged.
• The case for an intermediate-term price low would be strengthened with the
percentage of Bullish Advisors and the VIX hitting extreme levels consistent with
previous correction lows. Since 2009, the end of corrections has been signaled
9
by the percentage of Bullish Advisors reaching the 35–30 level (p. 6). This data
is currently at 37. The VIX reached the high 40’s in the corrections in 2010 and
2011. The high-water mark on the VIX for the current correction has been 31 (p.
7). Sentiment data is near extremes coincident with previous intermediate-term
price lows; however, we are not quite there yet.
OPPORTUNITIES
• LUMBER – Positive seasonality on the horizon. Improving technicals. Accumulate
on weakness – CFP, WFT, IFP, WEF (pp. 20–22)
• GOLD: G, ELD – Commercial Hedger data supports multi-month rally (pp. 23–27)
• BMO/SU: Mean reversion pair trade idea – Long SU/Short BMO (pp. 28–29)
10
Required disclosures
Non-U.S. analyst disclosure
Chad McAlpine;Bish Koziol;Nathan Piper;Al Stanton;Victoria McCulloch;Haydn Rodgers;Maurice Choy;John Musk;Martin
Young;Michael Harvey;Mark J. Friesen;Eric Gallie;Shailender Randhawa;Keith Mackey;Adrian Cighi;Fraser Phillips;Melissa
Oliphant;Sara O'Brien;Juliane Szeto;Neil Downey;Leslie Cho;Michael Smith;Kevin Cheng;Javed Mirza;Dan MacDonald;Darko
Mihelic;Geoffrey Kwan;Brendon Sattich;Charan Sanghera;Vanessa Wan;Robert Kwan;Nelson Ng;Kelsey Roste;Michelle Zuliani (i)
are not registered/qualified as research analysts with the NYSE and/or FINRA and (ii) may not be associated persons of the RBC
Capital Markets, LLC and therefore may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with
a subject company, public appearances and trading securities held by a research analyst account.
Conflicts disclosures
This product constitutes a compendium report (covers six or more subject companies). As such, RBC Capital Markets chooses
to provide specific disclosures for the subject companies by reference. To access current disclosures for the subject companies,
clients should refer to https://www.rbccm.com/GLDisclosure/PublicWeb/DisclosureLookup.aspx?entityId=1 or send a request to
RBC CM Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower, Toronto, Ontario M5J 2W7.
Please note that current conflicts disclosures may differ from those as of the publication date on, and as set forth in, this report.
The analyst(s) responsible for preparing this research report received compensation that is based upon various factors, including
total revenues of the member companies of RBC Capital Markets and its affiliates, a portion of which are or have been generated
by investment banking activities of the member companies of RBC Capital Markets and its affiliates.
Distribution of ratings
For the purpose of ratings distributions, regulatory rules require member firms to assign ratings to one of three rating categories
- Buy, Hold/Neutral, or Sell - regardless of a firm's own rating categories. Although RBC Capital Markets' ratings of Top Pick(TP)/
Outperform (O), Sector Perform (SP), and Underperform (U) most closely correspond to Buy, Hold/Neutral and Sell, respectively,
the meanings are not the same because our ratings are determined on a relative basis (as described below).
Distribution of ratings
RBC Capital Markets, Equity Research
As of 30-Sep-2014
Rating
BUY [Top Pick & Outperform]
HOLD [Sector Perform]
SELL [Underperform]
Count
858
683
98
Percent
52.35
41.67
5.98
Investment Banking
Serv./Past 12 Mos.
Count
Percent
308
35.90
151
22.11
8
8.16
Conflicts policy
RBC Capital Markets Policy for Managing Conflicts of Interest in Relation to Investment Research is available from us on request.
To access our current policy, clients should refer to
https://www.rbccm.com/global/file-414164.pdf
or send a request to RBC Capital Markets Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South
Tower, Toronto, Ontario M5J 2W7. We reserve the right to amend or supplement this policy at any time.
Dissemination of research and short-term trade ideas
RBC Capital Markets endeavours to make all reasonable efforts to provide research simultaneously to all eligible clients, having
regard to local time zones in overseas jurisdictions. Subject to any applicable regulatory considerations, "eligible clients" may
include RBC Capital Markets institutional clients globally, the retail divisions of RBC Dominion Securities Inc. and RBC Capital
Markets LLC, and affiliates. RBC Capital Markets' equity research is posted to our proprietary websites to ensure eligible clients
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11
Markets also provides eligible clients with access to SPARC on its proprietary INSIGHT website. SPARC contains market color and
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based on market and trading events. A Short-Term Trade Idea may differ from the price targets and/or recommendations in our
published research reports reflecting the research analyst's views of the longer-term (one year) prospects of the subject company,
as a result of the differing time horizons, methodologies and/or other factors. Thus, it is possible that the security of a subject
company that is considered a long-term 'Sector Perform' or even an 'Underperform' might be a short-term buying opportunity
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maintain or update Short-Term Trade Ideas. Short-Term Trade Ideas discussed in SPARC may not be suitable for all investors and
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All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all of
the subject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly or
indirectly, related to the specific recommendations or views expressed by the responsible analyst(s) in this report.
Disclaimer
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To Canadian Residents:
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12
this material, consider the appropriateness of this material having regard to their objectives, financial situation and needs. If this material relates to the acquisition
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761G of the Corporations Act.
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(Asia) Limited.
To Japanese Residents:
Unless otherwise exempted by Japanese law, this publication is distributed in Japan by or through RBC Capital Markets (Japan) Ltd., a registered type one financial
instruments firm and/or Royal Bank of Canada, Tokyo Branch, a licensed foreign bank.
.® Registered trademark of Royal Bank of Canada. RBC Capital Markets is a trademark of Royal Bank of Canada. Used under license.
Copyright © RBC Capital Markets, LLC 2014 - Member SIPC
Copyright © RBC Dominion Securities Inc. 2014 - Member CIPF
Copyright © RBC Europe Limited 2014
Copyright © Royal Bank of Canada 2014
All rights reserved
13

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Transcription

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