Canadian Research at a Glance

Transcription

Canadian Research at a Glance - Investor Village: Stock Message

EQUITY RESEARCH
CANADIAN RESEARCH AT A GLANCE
March 31, 2015
Price Target Revisions
! Alacer Gold Corp.
! Klondex Mines Ltd.
Summary
Copler reserve update bolsters economic potential
Summary
Potential for continued outperformance on operational and exploration success
Summary
On the road with Interfor
Summary
Hedged to mid 2017; FY14 results slight CF beat
Summary
Down by the Bay: Looking for in-line Q4 results; Focus will be on 2015 guidance
Summary
Driving the base while maintaining upside optionality
Summary
Crude Oil Inventories Continue to Rise
First Glance Notes
! Interfor Corporation
! Ithaca Energy
Earnings Preview
! Hudson's Bay Company
Company Comments
! TransCanada Corp.
Industry Comments
! Global Energy Perspectives
! Global Mining Trends & Values
! Integrated Oil and Senior E&P
! Paper & Forest Products Weekly
! RBC International E&P Daily
Summary
Summary
So what WTIE price are the large caps discounting?
Summary
Summary
IAE; DNO
Technical Research
! It's All Relative - March 30, 2015
Summary
Priced as of prior day's market close, EST (unless otherwise noted).
For Required Non-U.S. Analyst and Conflicts Disclosures, see Page 10.
EQUITY RESEARCH
U.S. RESEARCH AT A GLANCE
March 31, 2015
Ratings Revisions
! Continental Building Products, Inc.
Summary
Upgrading to Outperform: Free Cash Flow Story
Summary
Summary
Adjusting Estimates, Gross Margins Should Surprise to Upside. Maintain Outperform
Summary
Sizable Repurchase Completed As PE Investors Reduce Stake
Summary
4Q/14 Key Takeaways
Summary
Future Upside After DOW Deal Dependent on Chlor-Alkali Market Recovery
Summary
Negative Pre-announcement and 3D NAND Update
Summary
Refinancing complete; exchange offers reduce debt by $130M
Summary
Highlights from Investor Meetings with ATU's CEO
Summary
Credit contraction concerns reduced after 3Q, but valuation still a challenge
Summary
On the road with Ericsson
Summary
Thoughts from PANW's analyst day
Summary
Breaking Down the Scenarios
Summary
Fueled by Dropdowns
Summary
10K Highlights, Channel Checks, & Pangaea – Steady As She Goes
Summary
Summary
Stronger Yield vs Weaker Fundamentals
Summary
Turn up the volume
Summary
! Alacer Gold Corp.
! Apple Inc.
! Central Pacific Financial Corp
! Fifth Street Asset Management Inc.
! Olin Corporation
! SanDisk Corporation
First Glance Notes
! Cliffs Natural Resources Inc.
Company Comments
! Actuant Corp.
! CarMax, Inc.
! LM Ericsson Telephone Company
! Palo Alto Networks, Inc.
! Reynolds American, Inc.
! Sunoco LP
! The Rubicon Project, Inc.
! TransCanada Corp.
Industry Comments
! Diversified Metals & Mining
! European Exchanges
! Global Energy Perspectives
! Integrated Oil and Senior E&P
! Paper & Forest Products Weekly
! RBC European Industrials Daily
! RBC International E&P Daily
! Specialty Pharmaceuticals
! We've Got Issues
Summary
Summary
Summary
Summary
Philips lighting sale confirmed; RPC pre-close
Summary
IAE; DNO
Summary
Payor influence likely to provide initial push for biosimilar adoption
Summary
Utilities More Attractive; All Eyes on PJM
Technical Research
! It's All Relative - March 30, 2015
Summary
2
EQUITY RESEARCH
In-Depth Reports
! Colony Financial, Inc
Summary
Transformational Colony Capital Acquisition Remains a Key Positive
3
EQUITY RESEARCH
UK & European Research at a Glance
March 31, 2015
Ratings Revisions
! Burberry Group Plc
Summary
Global pricing pickle and weak sector trends should hold back stock performance
Summary
Cruel summer ahead
Summary
Refinancing complete; exchange offers reduce debt by $130M
Summary
Very short-life duration rail contract causes cut to Q1-3 2015/16E
Summary
On the road with Ericsson
! Diversified Metals & Mining
! Euro area Quarterly Outlook
! European Exchanges
! Luxury Goods: The luxury global
Summary
Stronger Yield vs Weaker Fundamentals
Summary
Happy Jam-day!
Summary
Turn up the volume
!
Summary
! Deutsche Post AG
First Glance Notes
! Cliffs Natural Resources Inc.
Company Comments
! Go-Ahead Group PLC
! LM Ericsson Telephone Company
Industry Comments
pricing pickle
RBC Diamond News
Summary
Summary
De Beers finds conditions tough in March
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)
4
Alacer Gold Corp.(TSX: ASR; 2.81; ASX: AQG)
Dan Rollins, CFA (Analyst)
(416) 842-9893; [email protected]
Mark Mihaljevic (Associate)
52 WEEKS
Rating:
Price Target:
14MAR14 - 06MAR15
3.50
Sector Perform
3.50 ▲ 3.25
Due to the positive impact increased oxide/sulfide reserves at Copler had on our
near- and long-term cash flow forecasts, we have raised our price target on Alacer
to C$3.50 from C$3.25. Given the implied 25% return to our price target, we
reiterate our Sector Perform recommendation.
3.15
2.80
2.45
2.10
30000
20000
10000
M
A
M
J
Close
J
2014
A
S
O
N
D
J
2015
F
M
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
EPS, Adj Diluted Prev.
2014A
0.17
2015E
0.10
2016E
0.07↑
0.06
2017E
0.07↑
0.04
P/E
13.1x
21.5x
33.5x
30.1x
All market data in CAD; all financial data in USD.
Klondex Mines Ltd.(TSX: KDX; 2.65)
Sam Crittenden, P.Eng., CFA (Analyst)
Wayne Lam, CFA (Associate)
52 WEEKS
• Economic potential positively impacted by additional reserves
• Alacer's near- and long-term cash flow potential has been enhanced as a result
of the company's positive reserve update at Copler. Additional oxide reserves
have extended the life of the heap leach operation and should provide greater
capital flexibility during the construction and ramp-up of the Sulfide project.
Given the continued use of elevated grades during initial years, the economics
of the Sulfide project were enhanced by an additional 4.5 years of reserves and
optimized grade profile.
• Copler reserves increase 23%
• Following on resource conversion, increased pad capacity and revised
parameters, reserves at Copler increased 23% to 4.31 Moz.
• Oxide reserves increased 30%
• Sulfide reserves bolstered by 22%
• Higher strip-ratio
• Incremental production expected to positively impact near-term cash flows
• As a result of incremental oxide production and updated grade expectations for
the sulfides, we now forecast average annual production of 170 Koz (80% basis)
over the next 5 years compared to 160 Koz previously. Over the same period
(2015-19), total and mine-site sustaining cash costs are forecast to average $610/
oz and $715/oz which compares favourably to our previous forecasts of $635/oz
and $740/oz, respectively.
• Based on our revised operational assumptions, we now forecast average
sustaining CFPS (operating cash flow after sustaining capital) of $0.24 through
2019, 13% higher than our previous estimate of $0.22.
14MAR14 - 06MAR15
2.60
Rating:
Outperform
Risk Qualifier: Speculative Risk
Price Target: 3.50 ▲ 3.00
Potential for continued outperformance on operational and exploration success
We see further upside potential in Klondex shares as continued production growth
and exploration results could provide catalysts in 2015. Klondex is well positioned
for lower gold prices due to above average grades and it has one of the highest free
cash flow yields in our coverage universe.
2.40
2.20
2.00
1.80
4000
3000
2000
1000
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A
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Close
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J
2014
A
S
O
N
D
J
2015
F
EPS, Adj Diluted Prev.
2014A
0.13↑
0.10
2015E
0.37↑
0.26
2016E
0.41↑
0.31
2017E
0.61
M
• 15% production growth in 2015: We expect production growth in 2015 as the
Fire Creek and Midas mines continue to ramp up. We forecast gold equivalent
production of 123koz in 2015 with cash costs of $638/oz (AuEq), up from 108koz
at $679/oz in 2014.
• High grades provide protection from lower gold prices: Fire Creek has a reserve
grade of 45g/t AuEq with Midas at 18g/t AuEq, which is well above the industry
underground mining average of 7g/t. This enables all-in sustaining cash costs in
the range of $800–850/oz vs. our coverage universe average of $950/oz.
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• 14% FCF yield for 2016: Low cash costs together with modest capital
requirements result in one of the highest FCF yields in our coverage universe at
14% vs. the average of 5% (for 2016E based on $1,300/oz gold).
All values in CAD unless otherwise noted.
First Glance Notes
Interfor Corporation(TSX: IFP; 19.97)
Paul C. Quinn (Analyst)
Hamir Patel (Analyst)
Rating:
52 WEEKS
14MAR14 - 06MAR15
22.00
20.00
18.00
16.00
4000
3000
2000
1000
M
A
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J
Close
J
2014
A
S
O
N
D
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2015
F
M
52 WEEKS
Rating:
14MAR14 - 06MAR15
1.60
1.20
0.80
20000
15000
10000
5000
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Close
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J
2014
A
S
O
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2015
F
All market data in CAD; all financial data in USD.
Outperform
Hedged to mid 2017; FY14 results slight CF beat
2.00
M
• Q1 lumber prices looking weak – Interfor noted that increased North American
(NA) lumber supply has effectively swamped the slowly recovering demand
from the US housing market in early 2015 and Q1 results will be below their
expectations at the start of the year.
• Integration and optimization of recently acquired US sawmills is ahead of
schedule – Interfor reports that its recent purchase of four sawmills from
Simpson Timber (less than a month ago) is progressing extremely well.
• Diversity in geography and mix a key strength - Interfor now has 2/3rds of its
lumber capacity located in the US. This is a distinct advantage wrt softwood
lumber duties versus WFT at 40% and CFP at 12% (growing to 23% over time).
• Bottom line – Interfor remains our top idea in lumber. We see further
opportunity for accretive growth through acquisitions, and expect additional
margin expansion as Interfor optimizes its expanding sawmill system.
Ithaca Energy(TSX: IAE; 0.59; AIM: IAE)
Nathan Piper (Analyst)
+44 131 222 3649; [email protected]
Victoria McCulloch, CA (Analyst)
2.80
2.40
Outperform
On the road with Interfor
M
• Small cash beat in FY14 results: FY14 results were largely pre-announced, with
10,947boe/d production reflecting the contribution from the Summit acquisition
completed 31 July 2014. This generated revenue of ~$379m ($100/bbl average
realisation including $3/bbl hedging gain), leading to operating cashflow of ~
$153m ($0.55/share), ahead of our ($0.48/share) forecast; Ithaca ended the year
with net debt of ~$763m. The ~$25m loss on earnings was a result of one-off
post-tax impairments of ~$173m as oil prices declined at year-end.
• $60m accelerated hedging gain realised in Q1/15: Ithaca has expanded its oil
hedging and accelerated the receipt of hedging gains in Q1/15 by $60m to
boost the realised gain to ~$80m in Q1/15. The company has further protected
cashflows by hedging ~9,000b/d at $76/bbl from April 2015 to June 2016 (taking
account of the value acceleration), plus an additional 4,000b/d at an average
price of $69/bbl July 2016 to June 2017. This lowers the company's breakeven
price for the existing production to under $10/bbl until Stella start-up. The
company also has 20bcf of gas put options at $10/mcf for 2015/16 (benefit will
be realized even without production from Stella).
Earnings Preview
Sabahat Khan (Analyst)
Irene Nattel (Analyst)
Hudson's Bay Company(TSX: HBC; 25.72)
Rating:
Price Target:
Outperform
35.00
Down by the Bay: Looking for in-line Q4 results; Focus will be on 2015 guidance
HBC will report Q4/F14 results on April 7. We are looking for Q4 EBITDA of
$303MM (+19.5% YoY). Although recent discussions have focused primarily on
the value of HBC's substantial real estate portfolio, at Q4 reporting we expect
investor focus to be on the retail operations, progress on the core strategies, and
2015 guidance. Reiterating Outperform rating and $35 price target.
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28.00
52 WEEKS
14MAR14 - 06MAR15
26.00
24.00
22.00
20.00
18.00
16.00
6000
4500
3000
1500
M
A
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Close
J
2014
A
S
O
N
D
J
2015
F
M
Revenue Prev.
4,077.0
5,223.4
8,075.8↓
8,080.4
8,935.9↓
8,962.4
2012A
2013A
2014E
2015E
• Expecting retail operations and 2015 guidance to be the focus of the Q4 release.
Notwithstanding HBC's substantial real estate portfolio, ongoing improvements
in the underlying retail operations remain a key driver of growth and value
creation. At Q4 reporting, we expect investor focus to be on: 1) 2015 EBITDA and
capex guidance; 2) retail trends YTD in both U.S. and Canada in light of the lower
fuel costs and a strengthening U.S. economy; 3) inventory levels/quality coming
out of the holiday selling season; 4) expected impact of the stronger USD on 2015
results; and, 5) indications of continued progress at Lord & Taylor.
• Positive Q4 comps reported by peers. Recent Q4 results reported by HBC's peers
reflected positive comps and higher capex budgets for 2015. We expect HBC
to also report solid comps across its banners, particularly at OFF 5TH, and also
expect a higher capex budget for 2015 versus prior year. JWN reported total
company Q4 comps of +4.7%, which reflected +0.7% at full-line stores, +3.2% at
Nordstrom Rack, and a 19% YoY increase in online sales. M reported Q4 comps
of +2.5%, while JCP reported strong Q4 comps +4.4%.
• Forecasting Q4 EBITDA of $302.9MM (+19.5% YoY). Looking for total sales of
$2,539MM, +5.4% YoY. On a same-store basis, we are looking for +3.5% from
the DSG (Hudson’s Bay, Lord & Taylor and Home Outfitters), and +3.0% at SKS.
We forecast EBITDA of $302.9MM (+19.5% YoY), a tick ahead of consensus at
$296.9MM.
Company Comments
TransCanada Corp.(TSX: TRP; 54.75; NYSE: TRP)
Robert Kwan, CFA (Analyst)
Kelsey Roste (Associate)
Rating:
Price Target:
52 WEEKS
14MAR14 - 06MAR15
Outperform
68.00
We believe that investors should be attracted to the roughly 8% expected annual
dividend growth on top of the almost 4% dividend yield. The base 8% dividend
growth is expected to be driven by small to medium-sized projects, most of which
are already under construction and upside to that is driven by the large, binary
projects.
62.00
60.00
58.00
56.00
54.00
52.00
50.00
16000
12000
8000
4000
M
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2014
A
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O
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2015
F
EPS, Adj Diluted
2013A
2.24
2014A
2.42
2015E
2.60
2016E
2.85
P/AEPS
24.4x
22.6x
21.1x
19.2x
M
• On the road with Don Marchand. We recently hosted meetings with Don
Marchand (CFO), which in our view reinforced the key messages laid out at the
2014 Investor Day, namely the roughly 8% EBITDA CAGR through 2017 driven by
small to medium-sized projects, most of which are already under construction,
while continuing to advance the larger, binary projects that could increase the
growth rate to a 12% CAGR.
• Not interested in jeopardizing the ability to fund the big projects. Given the
significant magnitude of the roughly $34 billion in larger projects that face
uncertain timing, the company is not interested in materially altering its financing
approach or corporate structure in any way that could potentially jeopardize its
ability to fund the larger projects. However, any changes remain options available
to the company when there is greater clarity on the future funding needs.
• TC PipeLines (TCP): the conveyor belt approach remains; we believe crisper
distribution messaging may be on the way. The company continues to look to
steadily dropdown its remaining natural gas pipeline assets into TCP targeted
over the next two years and potentially Keystone following that.
• Continuing to look for new projects with attractive returns. In particular,
the company sees attractive opportunities for future investment in Mexican
infrastructure that may unfold over the coming year, particularly in complex
pipeline builds where there are fewer qualified parties (i.e., not a cost of capital
shoot-out).
Industry Comments
Greg Pardy, CFA (Analyst)
Global Energy Perspectives
7
Franz Hargo Muljo, CA (Associate)
416 842 8588; [email protected]
Tom Callaghan, CA, CPA (Associate)
Fraser Phillips, P.Eng. (Analyst)
Chris Drew, CFA (Analyst)
Timothy Huff (Analyst)
Des Kilalea (Analyst)
Richard Hatch, ACA (Analyst)
Ioannis Masvoulas, CFA (Analyst)
Paul Hissey (Analyst)
Ken Tham, CFA (Analyst)
• U.S. Commercial crude oil inventories (excluding SPR) built 8.2 mmbbl (1.8%)
in the week ending March 20 (well above the expected 4.9 mmbbl build), and
currently stand at 466.7 mmbbl, 22% above last year’s level and 27% above the 5year average (Exhibits 19-20). Cushing inventories increased by 1.9 mmbbl (3.5%)
to 56.3 mmbbl, 98% above last year’s level and 48% above the 5-year average
(Exhibits 19 & 22). Major product inventories decreased by 2.4 mmbbl this week,
led by a 2.0 mmbbl draw in motor gasoline (above the expected 1.7 mmbbl draw)
and a 0.3 mmbbl draw in jet fuel (Exhibits 19, 25-27).
• Natural Gas Weekly Storage – Bearish. Weekly U.S. natural gas storage injection
of 12 bcf in the week ending March 20 was above consensus of 8 bcf, versus last
year’s same week withdrawal of 57 bcf and the 5-year average withdrawal of 16
bcf. Total working gas in storage sits at 1,479 bcf, above last year’s 896 bcf level,
but below the 5-year average of 1,781 bcf.
Global Mining Trends & Values
• Highlights
• Commodity Price Performance:
• Metal prices were down on average 0.9% last week. Lead was the best performer
up 4.1%, followed by copper up 3.8%, zinc up 2.7%, uranium up 0.6%, and
aluminium up 0.5%. Nickel was the worst performer down 5.0%, followed by
thermal coal down 4.3%, coking coal down 4.2%, iron ore down 3.6%, moly down
2.9%, silver down 1.9%, and gold down 0.5%.
• Mining Share Price Performance:
• Mining shares were down on average 3.2% last week. The best performing group
was copper up 0.5%, followed by mineral sands down 1.9%, aluminium down
2.1%, miscellaneous down 2.8%, coal down 3.8%, iron ore down 4.6%, uranium
down 5.3%, nickel down 6.9%, and the diversified group down 7.7%.
• Valuation:
• Mining shares are now trading at an 18.5% premium to NAV at forward curve
prices, versus a 23.1% premium one week ago.
• Long/Short Metal Positions:
• RBC CM's proprietary data for the LME shows that the net short positions in
copper and lead decreased last week. Net short positions in aluminium, zinc, and
nickel were unchanged last week.
• Exchange Inventories:
• Total exchange inventories of aluminium, copper, and zinc decreased last week,
while total inventories of nickel increased last week.
Greg Pardy, CFA (Analyst)
Integrated Oil and Senior E&P
Franz Hargo Muljo, CA (Associate)
416 842 8588; [email protected]
• Based on our net asset value analysis, our large cap independent and integrated
coverage universe is currently discounting a long-term escalated WTI equivalent
(WTIE) price of US$73/boe (vs. US$72/boe), up 1% from last week, and a longterm WTI price of US$87/b, unchanged from last week.
• Current WTIE implied prices would compare with prior 2009–2014 YTD peak
and trough levels of US$84/boe and US$61/boe, respectively, while current WTI
implied prices would compare with peak and trough levels of US$102/b and US
$62/b, respectively.
• Spot WTIE prices of US$41/boe (vs. US$39/boe) were up 5% from last week.
Long-dated (2015–2018) WTIE prices of US$51/boe were unchanged from last
week.
• Our implied WTIE price (defined as an equivalent barrel economically weighted
approximately 75% to WTI crude oil and 25% to Henry Hub natural gas) is the
long-term price incorporated into our collective net asset value analysis, which
equates current share prices for our group to a P/NAV ratio of 100%. This analysis
incorporates an 8.5% after-tax discount rate. Please refer to Exhibit 1 for our WTI
equivalent price analysis.
Tom Callaghan, CA, CPA (Associate)
All values in USD unless otherwise noted.
8
Paul C. Quinn (Analyst)
Hamir Patel (Analyst)
Paper & Forest Products Weekly
• Comparable valuation tables, commodity prices, and total return performance
for our North American Paper & Forest Products coverage universe.
Nathan Piper (Analyst)
RBC International E&P Daily
Al Stanton (Analyst)
IAE.TO: Hedged to mid 2017; FY14 results slight CF beat; DNO (DNO.OL): Suspends
Yemen Operations; EGY: Unsuccessful well Offshore Angola; Statoil ASA: Adds more
gas offshore southern Tanzania; SK3.SG: Follow up discovery in Gulf of Thailand;
GKP.L: Raises $41m;
Haydn Rodgers, CA (Associate)
IAE; DNO
Victoria McCulloch, CA (Analyst)
Adam Naughton (Associate)
+441312223695; [email protected]
All values in USD unless otherwise noted.
Technical Research
Robert Sluymer, CFA (Analyst)
Anna Drotman (Associate)
It's All Relative - March 30, 2015
OVERVIEW
• Equity Markets – Equity markets have held and rallied from first support, with
the S&P holding its 5-month uptrend at 2050 and the Russell 2000 bouncing
from support near its recent break-out support near 1220. Regardless of whether
or not Monday’s rally was quarter-end noise, there are more stocks resolving
multi-month/multi-quarter trading ranges to the upside with improving relative
performance than not, suggesting further upside in the coming weeks.
• Group Highlights: (+) Household Durables, Homebuilders, Specialty Retail, IT
Services (-) Credit Cards, Disk Drives, Tobacco.
FEATURED CHARTS
• DISCRETIONARY (+) Household Durables (JAH, MHK) are accelerating while
Homebuilders (LEH, DHI) continue to show evidence of emerging. (+) Leading
Specialty Retail (TJX, ORLY, MUSA, KMX) reaccelerating from trend after 3+ month
pauses.
• TECHNOLOGY (+) IT Services accelerating, led by BR and SAIC, with WU and IT
emerging. (-) Disk Drives becoming oversold short-term in absolute price but
relative performance continues to probe new lows: WDC, STX.
• INDUSTRIALS (=/+) 12+ month downtrends in select Machinery (OSK, TEX)
showing very early signs of basing/bottoming.
• ENERGY (=/+) NFX rallies above its 200-dma, XEC rallies into its next resistance
level just below its 200-dma.
• FINANCIALS (-) Credit Cards (AXP, COF) becoming oversold short-term in absolute
price but relative performance remains weak.
• STAPLES (-) Tobacco – Another group becoming oversold short-term in absolute
price but relative performance remains weak: MO, PM.
9
Required disclosures
Non-U.S. analyst disclosure
Nathan Piper;Al Stanton;Haydn Rodgers;Victoria McCulloch;Adam Naughton;Sam Crittenden;Wayne Lam;Robert Kwan;Kelsey
Roste;Greg Pardy;Franz Hargo Muljo;Tom Callaghan;Dan Rollins;Mark Mihaljevic;Fraser Phillips;Chris Drew;Timothy Huff;Des
Kilalea;Richard Hatch;Ioannis Masvoulas;Paul Hissey;Ken Tham;Paul C. Quinn;Hamir Patel;Sabahat Khan;Irene Nattel (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 31-Mar-2015
Rating
BUY [Top Pick & Outperform]
HOLD [Sector Perform]
SELL [Underperform]
Count
909
713
115
Percent
52.33
41.05
6.62
Investment Banking
Serv./Past 12 Mos.
Count
Percent
280
30.80
125
17.53
5
4.35
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.
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how a security may trade, based on market and trading events, and the resulting trading opportunity that may be available. A
short-term trade idea may differ from the price targets and 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 a subject company's common equity that is considered a long-term
'Sector Perform' or even an 'Underperform' might present a short-term buying opportunity as a result of temporary selling pressure
in the market; conversely, a subject company's common equity rated a long-term 'Outperform' could be considered susceptible
to a short-term downward price correction. Short-term trade ideas are not ratings, nor are they part of any ratings system, and
the firm generally does not intend, nor undertakes any obligation, to maintain or update short-term trade ideas. Short-term trade
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Copyright © RBC Capital Markets, LLC 2015 - Member SIPC
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Canadian Research at a Glance - Investor Village: Stock Message

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