Daily roundup of research and analysis from the The Globe and Mail’s market strategist Scott Barlow
RBC Capital Markets analyst Maurice Choy provided analysis and top picks in the energy infrastructure sector,
“Our view: We are bullish on the Canadian Energy Infrastructure sector, which offers investors multiple ways to gain low-risk exposure to North America’s multi-year energy growth that lies ahead. We particularly favour the Canadian Midstream stocks as we believe that the WCSB’s [Western Canadian Sedimentary Basin] natural gas, NGL and oil volume growth outlook through 2030 remains unaffected by the recent low commodity prices. Moreover, we like Midstream’s progressively healthy financial setups, relatively sound capital allocation philosophies, and increasingly disciplined approach to risk management. If investors are concerned with a slowing economy, the Utilities stocks are solid options, with their low-risk, regulated earnings remaining the bedrock of the sector’s decades-long defensive attributes (not to mention the Utilities’ energy transition-driven growth opportunities and rising electricity demand backdrop). The Alberta Power companies are also well-positioned to serve the province’s growing power needs, particularly as data centre load growth emerges. Big picture, Midstream and Utilities’ dividends are sustainable and set to grow, with the 5.0% average dividend yield likely being attractive to income-oriented investors amid today’s interest rate environment. We prefer Pembina, Keyera, and TC Energy on Midstream; and AltaGas, Emera, Brookfield Infrastructure and TransAlta on Utilities and Alberta Power”
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BMO analyst Keith Bachman published “end of year shopping ideas” in software stocks, focusing on growth at a reasonable price,
“As we begin to look over the horizon to CY25, we reflect on a few names that are of interest, largely consistent with past comments, and with a positive bias to GARP opportunities. Our shopping list includes Accenture, Atlassian, Check Point, IBM, and Oracle, all of which are Market Perform rated at this juncture. We offer broader valuation and company specific comments … While we do not consider Atlassian a GARP opportunity, the stock is being valued at present like a GARP stock”
The other stocks in the list are Adobe Systems Inc., Salesforce Inc., Intuit Inc., Microsoft Corp., Servicenow Inc., SAP AG and Workday Inc.
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Bloomberg columnist Nir Kaissar is writing for an American audience (I don’t think Canadian investors have fully won the war on fees) but his point about niche ETFs is also important for domestic investors,
“Retail investors have won the battle of fees … it’s a huge win for investors and terrible for the investment industry … but the industry is fighting back with a growing and lucrative lineup of gamified trading apps and niche ETFs that entice investors to gamble with their savings … In this new free-investing world, in other words, the cost to watch out for has migrated from fees to risk … The difference between fees and risk is that fees are a single, easy to understand number that funds are required to disclose to investors, whereas risk is a more subtle cost, often buried in pages of industry garble that many investors can’t fully decipher … Retail investors enticed by zero-commission trading and the latest ETF strategies should bear in mind that the cost of straying from the market isn’t measured only in dollars and cents. Risk matters, too”
“Retail Investors Won on Fees But Are Losing on Risk” – Wealth Management
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Diversion: “This Facial Recognition Experiment With Meta’s Smart Glasses Is a Terrifying Vision of the Future” – Gizmodo