Upgrades/Downgrades/News

June 30 - TIO Networks (TNC) upgraded from sector perform to outperform by National Bank. This stock does not trade high very high volume (average of 40,000 shares daily for a 0.91 stock). We will monitor the bid-ask at the open but stocks this illiquid are difficult to trade and it's not something we want to hold.

June 30 - The negotiations in Greece continue and it's aanybody's guess what will happen. The latest news seems to be that the population overwhelmingly favours accepting the bailout package so Tsipras' government may actually be forced to put political pride and values aside and do what's best for the country and the population. Apparently a 2 year bailout package is being discussed, which again just kicks the can down the road as usual, but that's basically what every country does with their debt, some are just in worse situations than others. If a deal is reached for any time frame it will be good for markets, which were obviously extremely rattled yesterday (although this was more of an excuse to sell rather than a primary catalyst). One way or another this situation will be resolved, Greece will struggle, the Euro will go on, and the global effect will be minimal so not need to panic buy or panis sell with situations like this. Continue to look for quality companies at reasonable valuations for the long-term and if trading opportunities arise we always want a fundamental micro catalyst, not only macro factors.

June 30 - CargoJet (CJT) has signed a ten year licensing agreement extension with First Air (provider of Cargo and passenger services to Canada's North). This will not come as much of a surprise but obviously it is still a positive for a stock that is already performing well this year. This is not an airline stock, which we only trade and do not hold, with a 2% dividend and stable long-term agreements such as these this stock can be a small holding in a portfolio. It was also a top pick of BNN marketcall guest Michael Simpson yesterday. We are going to trade this name today, but would want to get in at a lower price in order to hold long-term.

June 29 - West Fraser Timber (WFT) downgraded from buy to hold by TD. After revising estimatres due to lower lumber prices TD decided to cut this rating as well as dropping the price target on Tembec (TMB). We will look to short West Fraser at the open, although with futures down as much as they are we don't foresee an attractive price. However, in this sector we do have a couple of long-term dividend-paying holdings that we continue to like in Norbord (NBD) and Western Forest Products (WEF).

June 29 - Pacific Rubiales (PRE) has been downgraded from sector perform to underperform at RBC. We've been watching this name a lot lately due to the battle between the $6.50 Alfa takeover offer and the majority shareholder O'Hara, who are against this deal. With no other offers on the table and the stock hitting $4.53 today (43% below the offer price) and RBC setting a target price of $3 (obviously assuming no deal) it seems obvious that the deal is in the best interest of shareholders as the company is stating. We believe O'Hara is making the common mistake of taking into account their purchase price when evaluating this deal, but of course that is irrelevant. They may also have some hedges in place that they want to expire before the deal closes.

June 29 - As we predicted on Friday Alexis Tsipras' government continues to stand firm in the face of creditors, especially with respect to pension reform, so it looks as though a default and Euro exit is highly likely. Angela Merkel remains positive and open to negotiations but a reform by the Greek people will most likely throw their support behind Tsipras (after all he did win the election and it's not likely the population is going to support this pension reform). However, as we mentioned Friday even though this is a major catalyst for a pullback, which the markets have been waiting for, this is far from a Lehman brothers situation. If one of the other major European economies exited the Euro that would have much more global effects, but while the small Greek economy will suffer and the entire Euro zone will suffer to a lesser extenet, the ripple all the way to North American markets will be limited. It is still too early to start jumping into equities, however once this situation is resolved one way or another it should provide a better buying opportunity for currently overvalued assets.

June 28 - Internationally, still no deal for Greece and the Tuesday's soft deadline for the IMF payment is fast approaching. Usually we ignore these types of political posturing deadlines (US debt ceiling is one that always comes to mind) because in the end both sides know they consequences of not coming to an agreement are far more serious than bending a bit on any of their demands. Based on the stubbornness we have seen this extreme left Greek government would not completely surprise us if they did continue to be unreasonable and eventually force themselves out of the euro. From the introduction of the Euro it was our view that it lowered the standard of living in all of the peripheral countries (I can still remember ten years ago after speaking with European family and friends that I was motivated to study and write a paper on this fact). Due to this fact much of the population in these countries would actually be excited to see their respective currencies return. As you've all heard many times before, Greece is not a major global conern, contagion to Portugal, Spain and Italy are, but none of these countries are on the same level or anywhere near a Euro exit, so the fear trader is getting overdone. We would actually welcome a hit to the Euro and European equities to initiate some positions near the ridiculously low valuations we saw a few years ago, before the current, massive, continent wide run-up in asset prices.

June 26 - Aecon Group (ARE) upgraded from neutral to buy at Dundee Capital. We have done well trading these construction and infrastructure plays when they hit low valuations and start getting upgraded, however we do not hold anything in the space. Governments have been pumping stimulus into the markets since the recession but this is starting to be reined in and these companies will start to feel the pinch. They underperformed during a ramped up stimulus environment so why would we want them as budgets and spending become less generous?

June 26 - Sabina Gold and Silver (SBB) has been downgraded from outperform to sector perform at RBC. A tiny precious metal play with tiny volume (only 68,000 today even on a downgrade from Canada's largest bank) not worth a trade in either direction.

The biggest news of the day in Canada is the increased royalty rates in Alberta. Make no mistake, in this low oil environment where these companies are already cutting jobs and dividends, reducing spending and taking massive hits to their stock prices this is truly kicking them when they are down. However, many great companies are getting thrown out with the bath water. Saskatchewan immediately started advertising itself as more stable and oil/gas friendly as soon as the NDP government was elected in Alberta, yet companies doing business in other provinces such as Saskatchewan are still being hit equally hard as those operating only in Alberta. Our favourite names in the space continue to be: Crescent Point (CPG) - great Saskatchewan Bakken assets, well-hedged at higher prices for the rest of this year, fantastic management team and completely dedicated to maintaining the dividend. Vermilion Energy (CPG) - exposed to higher European Brent prices, another great management team that has actually raised the dividend multiple times over the past few years.

June 25 - Gran Tierra Energy (GTE) is getting upgraded from hold to buy at Canaccord Genuity as well as Mackie Research after announcing a massive ramp up in their capital spending. Neither of these firms have the market moving power of the big banks, but this is positive news for a company that also received the same upgrade from Paradigm two weeks ago. We prefer when larger institutions get bullish on stocks, but this is a positive sign for Gran Tierra. There is still more risk here though than potential reward for us to take any kind of meaningful position.

June 25 - Transition Therapeutics (TTH) has been downgraded from speculative buy to hold at Canaccord Genuity. After yesterday's stock collapse it's not surprising some analysts will suddenly shy away from this stock or adjust their price targets accordingly, however we believe rarely is a 70%+ one day move in a stock truly warranted and there is almost always a rebound, whether it is a dead cat bounce or not is another story, but a trade off yesterday's close could be a profitable play for those who are not risk averse.

AGF Management (AGF) disappointed on earnings as the outflows outweighed solid performance. This is an ongoing trend in the markets, people are taking more control of their investments and do not want to pay high fees to fund managers. AGF has some great people working for them, but it's tough to justify the fees any advisory firm charges unless they can consistently produce performance that significantly surpasses the index. Analysts on the street knew this was coming, by our count there were 6 price target cuts in the two weeks leading into earnings, followed by another 8 today. It hasn't been a catastrophic fall but, a 5% drop yesterday followed by another similar drop today is definitely hurting investors in this name. We've actually never traded this stock but after a couple more days of consolidation it may actually be worth a long play with the 5% dividend and approaching single digits P/E. However, as we said, long-term we don't like this space (obviously as do-it-yourself investors ourselves).

Blackberry (BB) has announced the approval of a share repurchase program to purchase for cancellation up to 12 million shares. At first glance this seems like good news for a company struggling to find it's way, however this amounts to only 2.5% of the public float (we always look for at least 5% in order to have any meaningful impact). We've successfully traded Blackberry both long and short, the common stock and the options, many times but right now it doesn't appeal to us either way. If it were to approach the $9 range again we might consider a long trade.

June 24 - Franco Nevada (FNV) upgraded from market perform to outperform at Raymond James. We are going to trade this one but again not worth a long-term hold in this space and there are better names if you do want to be in this space.

Transition Therapeutics (TTH) headed up for a huge fall after their phase 2/3 clinical study on their key Alzheimer's drug did not meet its primary efficacy endpoint. While the drug apparently did reduce agitation and aggression in patients it showed little improvement above the placebo group. This is horrible news for a small Canadian biopharmaceutical company listing this as their first and most promising drug in the company profile, so not surprisingly the stock is falling pre-market.

The magnitude of the drop is a little more than expected and probably more than is warranted, currently trading over 70% cheaper!

June 23 - Goldcorp (G) raised to action list buy from by at TD. As far as gold companies go we agree with TD that this is attractive (around 52 week lows with 3.7% dividend and fairly stable mine jurisdictions). We view it as a trade though and nothing more, we just don't see the sector as attractive for us over the long-term.

June 23 - Cogeco Cable (CCA) raised to sector outperform from sector perform at Scotiabank. This is definitely a good day trade but even Scotiabank's target price only implies an 11% annualized return plus a modest 2% dividend, that's not enough to be worth a long-term hold in our portfolio.

Day Trade - Closed up 4.20%

Blackberry (BB) full of conflicting signals with their earnings and conference call and as usual with Blackberry the market is bouncing all over the place. Another quarterly loss and record low smartphone shipments, however software beat and licensing agreement deal signed with Cisco. We believe the only way to play Blackberry is through day trades and options. Generally the market swings too wildly in one direction on any news, then reverts back to more appropriate levels (proven again today with 8% pre-market jump followed by a decline in to negative territory at the open). Contrarian trades to the market momentum are one way to play this name, or else market neutral option since as volatile as the price is in the end Blackberry trades in a fairly narrow range.

June 22 - As is generally the case on a Monday, especially outside of major earnings season, it is quiet on the analyst front. Enbridge Income Fund (ENF) was upgraded hold to buy at TD combined with a $1 drop in the target price. As we mentioned on Friday this is a huge transaction for Enbridge Income Fund, but doesn't really excite us. There are better places to get a 4% yield with low growth in this type of environment.

June 22 - There was also an insignificant cut from market perform to underperform on Regal Lifestyle Comunities (RLC) by RBC after the $12 per share takeover was announced on Friday. Oddly the stocks is trading slightly above th eoffer price ($12.05) but this offers neither a long arbitrage nor short trade enticement. If you own this stocks might as well sell here, it's unlikely the offer will get any better.

Elsewhere, NeuLion (NLN) signed a multi-year agreement with the tennis channel. We accumulated a small position in this name in the $1.00-$1.20 range and intend to hold it long-term to see how this story plays out. We don't need to tell you live on-demand viewing is the way of the future (and present) so bringing on-demand viewing to the sporting world is a great business that is attractive to us both as investors and consumers. Pairing with several major providers, channels and sports organizations has demonstrated the there is significant potential here.

Neulion (NLN) closed up 4.25% from the open and rose 22% in 4 days!

June 19 - George Weston (WN) has been upgraded from market perform to outperform by BMO. We are trading this today on the upgrade, but are holders of Metro (MRU) and Loblaws (L) instead in the grocery space.

June 19 - Medical Facilities (DR) has been upgraded from sector perform to outperform by RBC. This is one that we have been monitoring for the past two months since a nive pullback that brought it to 52 weeks lows and an over 7% dividend. We are trading this one today as well as keeping some of the profits in the name for the long-term.

June 18 - American Petrobras (BOE) has been downgraded from speculative buy to hold by TD. This is a micro-cap (market cap of $54.7 million) so we don't even consider trading these unless there is a major catalyst.

June 18 - AirBoss of America (BOS) has been upgraded from hold to buy by TD. High P/E (24x), low dividend (1.2%) and at around $20 is at the top of it's 52 week range $20.08 ($8.54-20.38) so this does not interest us. The market seems to like the acquisition though if you were already in the name, it was bid up around 10% pre-market.

June 17 - Hudson's Bay Company (HBC) has been upgraded from market perform to outperformer by BMO as the upgrades continue after the Kaufhof deal. The easy money was made on this name Monday and Tuesday after the deal was announced, opening up another 2% today it appears the markets may be getting ahead of itself or overly optimistic. We reiterate our comments from yesterday that at most we would consider it an underweight position considering the difficult conditions in Europe and the run that the stock has been on since the deal was announced.

June 17 - Surge Energy (SGY) and Northern Blizzard (NBZ) were both upgraded from hold to buy, while Seven Generations (VII) was upgraded to action list buy from buy all at TD. We like Seven Generations and hold a small long-term position. Surge and Northern Blizzard have very high, but at current levels unsustainable dividends and they were both bid up heavily pre-market so we won't look at either of these. However, Seven Generations, which TD has just given its highest rating, opened up slightly but is now trading around yesterday's close so it may be worth a trade here or initiating a small position for those who do not have one already.

Also, today on BNN the CEO of Frankly will be on. A rare opportunity for the retail investing masses to see the CEO of this small venture company. We own a small position and this was worth a trade based solely on his appearance as the name gets more exposure.

June 16 - Hudson's Bay Company (HBC) has been upgraded from sector performer to outperformer by CIBC and from neutral to outperform at Credit Suisse. With their long anticipated deal for Kaufhof finally confirmed yesterday the analysts and markets seem to be positive on the deal. I like how HBC has gone after Sak's and is now entering the European market, but the retail business is volatile and fickle. It would be nice to see another Canadian company competing in retail on an international level, however many pundits are also quick to point out how many have faltered attempting to replicate domestic success in Europe. We view this as a trade or at most an underweight position (trading at a 52 week high with a 0.7% dividend in a slow growth space does not excite us).

Day Trade - Closed up 8.96%!

June 16 - Canadian National Railway (CNR) has been upgraded from market perform to outperform by Raymond James. A reasonable beta (0.51), dividend (1.7%) and P/E (18.5). Not worth a trade here, just all around average, middle of the 52 week range, simple name that you can hold if you like the space, but there isn't enough upside for us. With all of the rail disasters, regulatory uncertainty and decline in crude by rail we see the potential downside outweighing the potential upside.

June 16 - Transcontinental (TCL.a) has been upgraded from sector perform to outperform by National Bank Financial. We reiterate our comments from Friday when CIBC upgraded the stock that this stock is a great value at these levels (it seems slowly more people will start to come on board with this belief).

June 15 - A trio of gold companies, which includes Alamos Gold (AGI) , Aurico Gold (AUQ) and First Majestic (FR), have been upgraded from hold to buy by Desjardins. However, also in the space RBC is downgrading Goldcorp (G) from outperform to sector perform. We've said it before and we'll say it again, worth trading, but with how badly gold underperforms over the long-term we're not holding any of these names.

June 15 - TMX Group (X) , has been upgraded from hold to buy at TD. This is a name you can hold for the long-term with fairly stable earnings and a reasonable 3% dividend. Akin to owning the casino they make money no matter how the individual stocks are doing and even though they have some more competition with Equitas, there is still enough business to go around since there are no other legitimate places to park smart money right now.

Day Traded and kept an underweight position +3.7% gain!

June 12 - CanElson Drilling (CDI) downgraded to hold from buy by Canaccord Genuity, while Trinidad Drilling (TDG) was downgraded to market perform from outperform by BMO and upgraded from sector perform to sector outperform at Scotiabank. After yesterday's bsuiness combination announcement the ratings and price targets of both stocks are being adjusted. Combining to become Canada's third largest driller it still only interests us as an arbitrage play on CanElson (the cash portion offers a 10% upside while the share option is obviously unpredictable).

June 12 - Transcontinental (TCL.a) upgraded from sector performer to sector ouitperformer by CIBC after a slight earnings miss lowered the stock to attractive levels. This is a rare TSX name we have never traded but with a 4% dividend that is easily covered several times over, a P/E of 10 and a cap-to-rev (market capitalization to revenue) ratio of only 0.6:1 this appears to be part of the almost extinct value stock in these current markets. We will look at initiating some positions at these levels.

June 11, 2015 - North West Company (NWC) upgraded by TD from hold to buy. With a 4.75% dividend that currently is fully covered it can be kept as an underweight in the portfolio, but it is getting bid up too much pre-market to interest us at these levels.

June 11, 2015 - Enerplus (ERF) upgraded by TD from hold to buy. After raising its forecast and spending plans yesterday the stock has been rising and getting price target upgrades across the board. Worth a trade on the positive news or a small position holding. If you bought in yesterday sell at least some of the position today as it has already had a huge jump.

June 11, 2015 - Toromont Industries (TIH) upgraded by Raymond James from market perform to outperform. The stock has plenty of earnings to cover the 2% dividend, but with a high beta and a small dividend it is only worth a trade in our minds.

June 11, 2015 - Cineplex (CGX) downgraded to hold from buy by Canaccord Genuity. This is just an all-round simple, average stock with a tiny beta of 0.18, a solid 3.3% dividend and relatively stable earnings that fluctuate based on the quality of new movies, which they have no control over. It can be traded, in this case shorted, or held for a small position of low growth/low volatility.

ValueAct Capital has sold 4.2 million shares of Valeant Pharmaceuticals (VRX) as the stock has grown past 20% of the fund's assets.

Also, founder Chip Wilson is selling his entire stake in Lululemon (LULU). Both of these stocks have had big gains and are near 52 weeks highs so we would be of the same view of it being a good time to trim positions.

June 10, 2015 - Gran Tierra Energy (GTE) upgraded by Paradigm from hold to buy. Another energy name good for a trade, but without a dividend and in an uncertain energy environment it's not a name we want to hold.

June 10, 2015 - Sun Life (SLF) upgraded by RBC from sector perform to outperform. Long-term holding that should eventually benefit from rising rates, but it will still take many gradual steps up before we return to a normal rate environment so there is no need to rush too much new money into this name. We recommend a market weight position and add to it gradually if desired.

Also, we personally are recommending adding to or commencing positions in Diversified Royalty (DIV) and Patient Home Monitoring (PHM) after major acquisitions. We hold both for the long-term and yesterday reiterated our overweight stance on both names immediately after yesterday afternoon's announcements.

June 9, 2015 - Pengrowth Energy (PGF) upgraded by National Bank Financial from sector perform to outperform with a slight boost of the target price to $4.50 from $4.25. This is a long-term holding of ours even though it is extremely volatile (beta of 1.86) and has suffered with the decline in oil prices (trading at half of its 52 week high). With a 7.1% dividend (confirmed today) and some good assets throughout the country (especially the Lindbergh property in Saskatchewan where today production was announced to be exceeding facility capacity) we believe Pengrowth is worth continuing to hold here.

Day Traded and kept a market weight position +7.9% today!

June 8, 2015 - Lake Shore Gold upgraded by RBC from underperform to outperform and another gold company Detour Gold upgraded by Canaccord Genuity from hold to buy. These are both good for a day trade. Anyone unbiased individual with experience in the markets knows that, while valuations are low and there are potential high risk/high returns in the space, over the long-term gold equities underperform.

June 5, 2015 - CAE upgraded by TD from hold to buy, PT unchanged at $17.50. Worth a day trade but no long-term interest in this name.

June 5 - Saputo downgraded to market perform/hold by BMO and Desjardins with significant PT drops across the board from almost all analysts. Already fell substantially yesterday and guaranteed to drop again today.

June 5 - Delphi Energy upgraded to outperform from sector perform by National Bank Financial. Bid up over 5% before the open and never dropped below this so this did not interest us.

June 5 - Horizon North Logistics downgraded to sector perform from outperform by National Bank Financial. Opened down over 3% and around $4 is somewhat in the middle of a $1.80-$7.78 52 week range. This one has bounced all over the place over the past year and with an 8% dividend it's risky on both the short and long side. A month ago analysts were all upgrading their targets and most seem to be on the fence, easily swayed to one side then back again. It's occasionally worth a quick trade but nothing more.

June 4, 2015 - Canaccord Genuity upgraded by TD from hold to buy and PT to $8.50 (21% upside). As I mention on this site, the brokerages and financial institutions make profits on your money, no matter if your investments grow or fall, so I like this upgrade on a stock that pays a 2.81% dividend and has been lowered to almost half of its 52-week high.

Day Trade - Sold position for a 10.98% profit!

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