Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
BofA analyst Lawson Winder’s top picks in the silver mining sector are both headquartered in Vancouver,
“BofA remains bullish on precious metals, including silver, despite the already notable strength year-to-date. As per BofA Metal Strategist, Michael Widmer, gold and silver are among our most preferred commodities, with the yellow metal pushed up by central banks, China investors and, increasingly, Western buyers on a confluence of macro factors, including an end to hiking cycles. Accordingly, we see the yellow metal rallying to $3,000 per ounce (/oz) by 2025E (vs. $2,317/oz today). Silver benefits from that too, with prices also boosted by stronger industrial demand. Widmer sees the silver price rising to a 2026E average of $35/oz (vs. $29.28/oz spot). Unlike gold, “pure” silver exposure via mining equity investments is difficult to find given the nature of its mining. Silver is often a by-product or a co-product of mines where other metals (copper, gold, lead, and zinc, predominantly) are the primary commodity produced … Our Buy-rated equities for silver exposure in North America include Pan American Silver (PAAS) and Wheaton Precious Metals (WPM). PAAS is catalyst-rich, has a solid balance sheet, offers solid production growth with solid upside potential across various assets in the portfolio. WPM is a precious metals royalty and streaming company and derives a sizable 36% of its 2024E revenues from silver. WPM has peer-leading volume growth, is exposed to top-tier jurisdictions, has a strong balance sheet, and offers insulation from industry inflationary cost pressures”
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CIBC analyst Mark Jarvi surveyed the rally in renewable power stocks,
“The renewable/power companies we cover have seen a share price recovery over the last two months (up 18% on average vs. TSX down 1% and S&P 500 up 3%) The recovery hasn’t happened as we expected—it was more abrupt and came without a material change in the 10-year bond yield outlook which defied the general narrative that these stocks wouldn’t perform well unless yields/rates went lower. Rather, data centre/AI power demand hype has helped sentiment, plus the stocks rebounded from what we viewed as overly discounted conditions. Investors should realize the rally may pause and that fundamental, longer-term investors are not yet bullish on the sector outlook … Our preferred picks are BLX & BEP. Recent Rally—Drivers & Can It Last? The recovery in renewable stocks that started in mid-April was likely driven by 1) excitement of data centre/ GenAI load demand, 2) a peaking out in the 10-year bond yield as rate cut expectations were reset, and 3) a potential rally off oversold conditions. Modestly better-than-expected Q1 results, easing short interest and announcements like BEP’s 10.5GW offtake agreement with Microsoft helped sustain the rally through May”
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BMO chief investment strategist Brian Belski followed up his bullish strategy call on Canadian equities yesterday with touting a buying opportunity in U.S. health care stocks,
“We believe recent market performance dynamics have created some attractive opportunities from a sector perspective as investors have seemingly shifted back to 2023 patterns by chasing momentum in a handful of mega-cap tech names while pushing most other sectors in YTD underperformance territory despite a relatively solid fundamental foundation for many areas … This week we are highlighting another Market Weight sector – Health Care – which we believe could see a relative performance bounce for similar reasons. However, sector characteristics also suggest that a highly selective approach is warranted”
The stocks selected are AbbVie Inc., Amgen Inc., Cooper Companies Inc., Charles River Laboratories International Inc., Exelixis Inc., Gilead Sciences Inc., Globus Medical Inc Class A Hologic Inc., Jazz Pharmaceuticals Public Limited Company, Johnson & Johnson, Eli Lilly and Company, Medtronic PLC, Merck 8 Co. Inc., Pfizer Inc., Regeneron Pharmaceuticals Inc., Thermo Fisher Scientific Inc. and UnitedHealth Group Incorporated.
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Diversion: “America’s Notorious ‘Cancer Alley’ Is Even More Toxic Than We Thought” – Gizmodo