Devastating Losses Are Coming

VOTED THE WORLD’S BEST INVESTMENT ADVISORY

February 8, 2019 Vol. 51, No. 3. Pages 45-64 $6.00

What is your advisor 2019 OUTLOOK EDITOR’S doing about it? NOTES Banks Devastating losses banking on arket watch- ers continue credit trends to debate are coming whether or continuing Mnot cannabis is a long- hold financial professionals Experienced financial profes- By Doug Young and Gary Ho term play. Cannabis who recommend monetary sionals understand that gold bul- stocks have certainly had gold to their clients in the lion is an alternative to cash. Ray ooking back on the Canadi- something of a rocky highest esteem. It is their Dalio, chairman of the largest an financial sector in 2018, Isage advice that will protect in- hedge fund in the world (Bridge- the life insurance compa- start post-legalization in vestors from the unprecedented water & Associates), once stated, nies lagged the banks, con- Canada, but many play- dangers they face today in the "If you don’t own gold…there is Ltrary to our call, while the asset ers are intrepidly forging markets. However, many advisors no sensible reason other than you managers underperformed both. ahead to establish a clear are no longer permitted to recom- don’t know history or you don’t Desjardins Capital Markets’ finan- brand identity and hope- mend physical gold or precious know the economics of it." cial sector "top picks" this year are fully gain an advantage metals in client portfolios as a re- In the final quarter of 2018, in Sun Life Financial Inc. (SLF-TSX, sult of the new rules defining risk NICK BARISHEFF Canadian dollars, the price of $48.02; SLF-NYSE, US$35.97) (life among consumers. in mutual funds. moved upward by 13.8 per cent. insurers, or lifecos), Toronto-Do- A major game changer Many clients who had been The NASDAQ return was -12.8 per minion Bank (TD-TSX, $72.20; TD- will be the legislation on holding gold for years were forced cent and S&P 500 return was -8.9 NYSE, US$54.10) (banks) and Alaris edibles and other refined to reduce their positions last year sors and investment dealers no per cent over the same period, Royalty Corp. (AD-TSX, $18.80) (al- cannabis products taking by their investment advisor’s deal- longer being viable. The Every- while the return on the TSX was - ternative lenders). er. The timing for this couldn’t thing Bubble appears to be burst- 10.1 per cent. For the Canadian banks, the fo- effect on Oct. 17, 2019 have been worse, as the resulting ing and, as history has shown, Based on those figures, securi- cus in fiscal 2019 will be acutely on (when the second year of rise in their gold holdings would investors’ fears can easily grow ties regulators have made a grave credit and whether we finally see marijuana legalization have reduced the losses in their into a panic. mistake in re-rating monetary credit trends start to turn, given we begins). Makers of portfolios from the market car- The final quarter in 2018 was a gold to a medium-high risk rela- are arguably in the late stages of the cannabis-infused prod- nage we have witnessed since late textbook display of why investors tive to ‘Know Your Client’ (KYC) credit cycle and household debt September. must own gold. There is no liquid forms. These regulators, fund levels are elevated. ucts are already forming The equity selloff that began in asset more negatively correlated dealers and, by extension, their Otherwise, net interest margin relationships with leading October is intensifying and threat- to the financial markets. Investors various compliance enforcement (NIM) expansion should continue beverage companies ens advisors, MFDA (Mutual Fund who do not own monetary gold departments have ignored the fact (partially offset by deposit betas (such as the HEXO Dealers Association) dealers and may find themselves dangerously that the Bank for International and increased competition in the Cannabis Corp. deal with investors with a high probability of exposed to market volatility with- Settlements (BIS), which sets the commercial segment), and we be- a 50 per cent to 70 per cent loss of out the much-needed divers- rules for central banks and com- lieve the banks will further reduce Molson Coors Inc., and capital and a corresponding loss of ification/portfolio insurance that mercial banks, has stated that expense ratios in order to offset the Coca-Cola Co. invest- income in 2019. A decline of this gold offers. If the current down- "monetary gold is a risk-free asset slowing loan growth. ment in Aurora Cannabis magnitude will have devastating turn in the market continues, as on par with U.S. Treasuries and For the lifecos, a sustained in- Inc.), inspiring thrilling effects on retirement portfolios. the world’s leading financial ex- U.S. dollars." They have also ham- crease in 10- and 30-year bond speculation about the Many investors will not recover in perts predict, this asset may be strung investment professionals yields would be favourable, and we their lifetimes. the only form of wealth preserva- possibilities, among pot This could snowball into advi- tion that works. See Barisheff on page 47 See Young and Ho on page 46 consumers and investors. At HEXO’s annual gen- eral meeting Jan. 16, CEO THE SENTIMENT PIE Sébastien St-Louis was New tax rules hit entrepreneurs hardest keen to discuss promo- Bears By Mark Halpern the taxable income and wages the tion level of $500,000 will be re- 21.3% tional opportunities (such earner gets from working. Passive duced by $5. This equates to a full as offering samples at et me begin by wishing income can include things such as reduction of the small business music festivals) and for- you and your family a hap- rental income, interest income, deduction when passive income is ays into green cuisine (it py, healthy and prosper- royalties, dividends or pensions. greater than or equal to $150,000. ous new year. Business New rules: The tax rules that The good news is that the has developed a THC ex- Lowners and incorporated profes- became effective on Jan. 1, 2019 amount resets the following year tract powder that can be sionals may not be aware of Ot- target Canadian-controlled pri- with no carryover. Even better, Bulls 45.4% Unsure added directly to food). tawa’s latest tactic to collect more vate corporations (CCPCs). The there are a few tax-efficient strate- 33.3% He and his colleagues taxes by changing the rules re- hardest-hit are business owners, gies that can help you keep more These are some stubborn bulls. After a were keen to underline garding tax on passive income. entrepreneurs and incorporated income for yourself and your fam- Examples of passive income in- professionals such as doctors, ily instead of the tax department. very brief spell in second place, they HEXO’s international ex- clude rental income and any busi- lawyers and accountants. Here are some of them: retake the largest share of our Senti- pansion efforts as well, ness activities in which the earner Corporations with more than Individual Pension Plans ment Pie with a 45.4 per cent slice, up pointing to another path does not materially participate $50,000 of annual passive income (IPPs) let you deposit significant from 34.8 per cent two weeks ago. during the year. Passive income will now lose all or part of their corporate funds for the sharehold- Last issue’s dominant group, the un- toward growth for mid- sure, shrink back to 33.3 per cent from differs from active income, which Small Business Deduction and ers’ benefit. These deposits are range pot stocks. – R.P. 35.8 per cent. The bears, which put up is any earned income including all then get highly taxed for every dol- tax-deductible for the CCPC, a a good fight last time, when they lar of excess passive income. This non-taxable benefit to the share- jumped to 29.4 per cent of the pie, could amount to an additional tax holder and provide tax-effective have since receded to 21.3 per cent. grab of $55,000 to $70,000 unless access to money from a corpora- Source: Investor’s Intelligence. you plan now. tion when you retire. In brief, the federal govern- You can save significantly more ment set an annual maximum of with an IPP than under current $50,000 of annual passive income RRSP rules – up to 65 per cent for CCPCs. Failure to stay below more – depending on your T4 in- that amount could be costly. Now, come and years of prior service. for every $1 of passive income over $50,000, the small business deduc- See Halpern on page 46 46 / February 8, 2019 INVESTOR’S DIGEST Issue 3 / 19 TD: Higher U.S. exposure than peers Young and Ho from front page roughly $1 billion in debt capacity, mortgages (currently No. 2). Of ronment is changing in Alaris’ assuming a 25 per cent debt-to- note, TD has about 22 per cent of favour, with interest rate hikes in- © Copyright 2019 by MPL Communications Inc. see a few catalysts that should capital ratio. all demand and notice deposits in creasing the appeal of its royalty All rights reserved. drive core earnings per share (EPS) It also generates about $800 Canada, a strong tie to consumers. structure; net capital deployment growth; however, sentiment could million of excess capital a year net Second, in our view, TD has could pick up, reducing the pay- Customer Service be negatively impacted if equity of dividends and funding organic high-quality franchises in Canada out ratio to 80 per cent by year- 416-869-1177 [email protected] market volatility remains elevated. growth. If this is put to work, core and the U.S. (both in terms of per- end; and its valuation is attractive, For the asset managers, we ex- EPS growth could surpass our sonal and commercial banking as trading at 1.1 times price-to-book Editor pect industry net flows to be flat- forecast. And we believe SLF could well as wealth management). value (compared to a historical av- Robin Poon to-slightly higher than in 2018, buy back about $800 million of Third, it offers higher relative erage of 1.6 times), with a com- Associate Editor ETFs to continue their momen- stock in 2019, which at the current exposure to U.S. markets com- pelling 9.1 per cent dividend yield. Manal Ali tum, and investors to pay greater stock price equates to roughly pared to its Canadian peers. We assign a price target of Production attention to both alternative assets three per cent EPS accretion. Fourth, it has lower exposure $21.50 per share for Alaris. Rick Bender and expense management. Third, we acknowledge MFS to capital markets versus peers, a Subscription Services net flows have been hurt by cer- business we believe should com- Doug Young and Gary Ho are fi- Manager tain popular funds being capped, mand a lower valuation multiple. nancial analysts at Desjardins Sher Mohammad Our ‘top picks’ in detail along with a shift to passive (ver- Fifth, it has the highest CET1 Capital Markets in Toronto. Advertising Sales (416) 869-1177 There are four drivers behind sus active) strategies as well as a ratio of the group, which positions [email protected] our positive views on Sun Life. shift to fixed income (from equity) it well from a defensive perspec- First, we anticipate core EPS mandates. tive, but also offensively if acquisi- IN THIS ISSUE MPL Communications Inc. growth of nine per cent in 2019 To cut to the chase, MFS remits tion opportunities arise (for AGT Food and Ingredients ...... 57 Stephen D. Pepper, (in line with management’s medi- between $400 million and $500 example, in the U.S.). Alaris Royalty...... 45 Chairman um-term EPS growth target of million of cash to SLF annually, TD gets an $82-per-share tar- AltaGas...... 52 Altura Energy...... 57 Barrie Martland, eight per cent to 10 per cent), and even if earnings flatline, man- get price. Andrew Peller...... 52 President Aphria...... 59 driven by U.S. group insurance, agement believes the eight per Alaris Royalty has a diverse Apollo Global Management LLC...... 62 Canadian operations (including cent to 10 per cent medium-term portfolio, solid track record of divi- Auxly Cannabis Group ...... 54 Funded by the Bank of America...... 62 Government expense actions), getting to scale EPS growth target is achievable. dend growth, and deployed capital Barkerville Gold Mines...... 58 in more Asian markets, and capi- Fourth, we believe SLF has the strongly in 2018 (which we expect Barrick Gold ...... 59 of Canada Blackstone Group LP...... 62 tal deployment. most attractive Canadian insur- to continue into 2019). In addition, BMO Junior Oil Index ETF...... 63 Investor’s Digest is published Bristol-Myers Squibb ...... 61 Second, the company has ance franchise of the group. within our coverage, Alaris stands Cameco...... 63 every two weeks, 24 times a year about $4.1 billion in excess capital We set a target share price of out as a name that benefits from a Canadian Natural Resources...... 63 by MPL Communications Inc., CannTrust Holdings...... 53 and debt capacity, by our math. $58 for Sun Life. rising interest rate environment Canopy Rivers ...... 56 133 Richmond Street West, Toron- This includes $2.2 billion of excess There are five drivers behind (reduces competition for deals by CareTrust REIT...... 61 CGI Group ...... 60 to, M5H 3M8. Subscription rate, holding company cash, $900 mil- our positive view on TD. First, we private equity firms and mezza- Chemtrade Logistics Income Fund ...... 50 Canada and U.S., one year $137. Ciena ...... 63 lion of excess operating company like its scale in Canadian personal nine-debt alternatives). Cisco Systems...... 62 Single issue: $6. Tel. 416-869- capital assuming a 125 per cent LI- and commercial banking, with the Our bullish thesis is predicated Cohen & Steers Infrastructure Fund...... 63 ConocoPhillips...... 62 1177, Fax 416-869-0456. CAT (Life Insurance Capital Ade- opportunity to build market share on several factors: noise related to Constellation Software...... 57 quacy Test, a measure used by in certain areas such as commer- its underperforming files is largely Correvio Pharma...... 58 Investor’s Digest of Canada CPS Technologies ...... 62 presents opinions and recommenda- financial regulators) ratio and cial lending (currently No. 3) and behind it; our belief that the envi- Devon Energy...... 62 Domtar...... 61 tions deemed to be of interest to Double Line Floating Rate Class 1 Shares...... 63 Canadian investors. Information pre- Dynasil Corp. of America...... 62 sented herein, while obtained from EnCana ...... 63 IPPs have better creditor protection than RRSPs Endeavour Silver...... 57 sources we believe reliable, is not Energy Fuels...... 63 guaranteed. The opinions expressed EOG Resources...... 62 Halpern from front page business and earning T4 sonally for the remaining 10 per Equinox Gold ...... 56 are strictly those of the writers and Essential Energy Services...... 58 income, they are eligible cent that covers the ROP rider. Af- EXFO ...... 57 are not necessarily endorsed by In- One of the unique char- to become members of ter 15 years, just for remaining FedEx...... 62 vestor’s Digest nor independently Flower One Holdings ...... 55 acteristics of an IPP is that your IPP, and those IPP as- healthy, the insurance company Galaxy Gaming...... 62 verified. Correspondents writing for General Motors ...... 61 it can act either as a de- sets can pass to the next will return to Richard all the mon- Global X Funds...... 63 Investor’s Digest may have an in- fined benefit pension plan generation without incur- ey he paid for that ROP rider, plus Goldcorp...... 63 terest in the investments mentioned Goldman Sachs Group...... 62 or a defined contribution ring tax or probate fees. all the premiums that his corpora- GT Gold...... 56 in their stories. The directors, em- HCP REIT...... 61 plan, and you can switch Shared Ownership Crit- tion paid for the insurance. Hi-Crush Partners LP ...... 61 ployees and contributing editors of every year depending on ical Illness (CI) Insurance Using this CI shared ownership Horizons S&P/TSX Capped Energy MPL Communications Inc. may Mark Halpern Index ETF ...... 63 your company’s cash flow. can provide important pro- strategy, shareholders can receive iAnthus Capital Holdings...... 57 from time to time be beneficial own- Take the example of Brenda, a tection for the business owner, their significant funds from their corpo- Invesco DB Oil Fund ...... 62 iQIYI ...... 62 ers of the securities referred to in the 55-year-old business owner, incor- families and their business, and de- ration in a tax-effective manner. iShares S&P/TSX Capped Energy Investor’s Digest of Canada. Index ETF ...... 63 porated for 10 years. She has saved liver a substantial guaranteed return The rates of return are high, cur- iShares U.S. Oil & Gas Exploration & Investor’s Digest of Canada $285,715 in RRSPs and plans to on investment. rently in the range of 15 per cent to Production ETF...... 62 Iteris ...... 62 welcomes company studies, indus- make the maximum contributions Often confused with Disability 30 per cent, with no interest rate Knight Therapeutics...... 59 every year until she turns 65. Stay- Insurance, CI covers more than two risk or exposure to the volatile Kraft Heinz ...... 62 try surveys and other reports for Kraken Robotics...... 59 possible publication when submit- ing in RRSPs, she will accumulate a dozen conditions like heart attack, stock market. Leagold Mining...... 59 Lockheed Martin ...... 62 ted by analysts, brokers and indi- total of $1,570,905 by the time she cancer, stroke and bypass surgery, In Richard’s case, if he gets di- Neo Performance Materials ...... 52 turns 65. But if she invests in an IPP and pays up to $2 million in a tax- agnosed with a covered condition Newmont Mining ...... 63 viduals. All material should be Nokia...... 61 submitted to the Editor. Investor’s instead and makes the higher an- free, lump sum 30 days after the di- along the way, the $500,000 will be Northrop Grumman...... 62 nual contributions, she will have agnosis of a covered condition. paid into his corporation and Nutrien...... 54 Digest is not responsible for mate- Obsidian Energy ...... 58 rial sent for editorial consideration. more than $2,272,000 at age 65. There are no strings attached on would have to come out as a tax- ON Semiconductor...... 63 That’s 45 per cent more than had how you use that money. able dividend or salary. If he has Painted Pony Energy ...... 59 Investor’s Digest reports on in- Pembina Pipeline ...... 52 she used only RRSPs to save for re- If you buy the Return of Premi- any shareholder loans, then it People ...... 54 vestments — it does not sell them. tirement, a big difference that can’t um (ROP) rider and don’t make a comes out tax-free. Performance Food Group...... 63 Neither the Digest nor MPL Com- Petrus Resources...... 55 be ignored. claim, you can get back all the You may prefer to use a different Pollard Banknote ...... 58 munications Inc. has any connec- PrairieSky Royalty...... 63 Unlike her RRSP, IPP assets en- money you paid for those premi- ownership structure — perhaps PRO REIT ...... 50 tion with any bank, brokerage or Purpose Marijuana Opportunities Fund ..55 joy greater creditor protection ums after 15 years. It’s a forced sav- owning the policy individually or Purpose Premium Yield Fund...... 55 other financial institution. from provincial legislation. On top ings bundled with vital protection. corporately in its entirety, or in a Questor Technology...... 56 Reproduction is allowed only on Raytheon...... 62 of that, she will have access to a You can designate your compa- shared ownership arrangement. Sangoma Technologies...... 60 written permission. Information wider selection of investment vehi- ny (rather than the insured owner) Those options should be consid- SEMAFO...... 57 Seven Generations Energy...... 63 presented herein, while obtained cles, and options not allowable in and its shareholders, key people ered only after consulting with a SilverCrest Metals...... 55 from sources we believe reliable, is Smith-Midland ...... 62 an RRSP, including shares of pri- and executives, as the beneficiary professional. Socket Mobile...... 62 not guaranteed. vate businesses and real estate. of the CI policy. Using this strate- Tax-Exempt Corporate-Owned Stingray Group...... 53 Summit Industrial Income REIT...... 50 Business Number 12184 4328 Many unmarried Canadians, gy, your corporation pays the in- Life Insurance is a no-limit TFSA Sun Life Financial ...... 45 RT0001. ISSN 0047-1356. whether they’re single, divorced, or surance premiums for the CI for your company. TAL Education Group ...... 62 Theratechnologies...... 56 Investor’s Digest of Canada widowed, don’t realize their RRSP benefit only, using tax-effective Investor’s Digest readers use TF- Toronto-Dominion Bank...... 45 savings will be fully taxed when corporate dollars. The insured in- SAs because investments grow Tourmaline Oil...... 63 was voted the World’s Best Invest- UGI ...... 63 they die. So, a $1,000,000 RRSP dividual pays only the premium without being taxed, and funds can United States Oil Fund LP ...... 62 ment Advisory by the Washington- Valens GroWorks ...... 56 based Newsletter and Electronic would only be worth $460,000 to for the ROP rider with their after- be accessed tax-free, but you can Village Farms International...... 52 VirTra ...... 62 Publishers Foundation in 2006 for heirs other than a spouse. An RRSP tax personal income. deposit no more than $6,000 a year. can only be rolled over on a tax-de- Let’s take the example of Corporate-Owned Life Insurance WCM Focused International the fifth time. Growth Fund...... 63 ferred basis to a spouse or disabled Richard, a 45-year-old dentist with enjoys the tax-exempt attributes of a WSP Global...... 53 Return undeliverable Canadian Zymeworks ...... 52 child. For married taxpayers, the a professional corporation who TFSA, with no upper limit. addresses to MPL Communica- same thing occurs on the death of wants to buy $500,000 of CI insur- Life Insurance continues to en- ❒ From time to time, we make our subscription list tions Inc., 402-133 Richmond St. available to companies and organizations whose the second spouse. ance. Ninety per cent of the total joy unique treatment under Cana- products and services we believe may interest you. W. Toronto ON M5H 3M8 With an IPP, if your spouse or premiums can be paid by his com- If you do not want your name to be made available, please check here and return with your mailing label. Next issue February 22 children are employed in your pany, and he pays the balance per- See Halpern on page 47 Issue 3 / 19 INVESTOR’S DIGEST February 8, 2019 / 47

RECENT CHANGES DEFY REASON IN LIGHT OF EQUITY BULL MARKET’S SCALE Risk rules restrict both advisors and investors

Barisheff from front page Financial advisors are under the way to gauge the level of risk in an Some investors, who were offers you any real value, then why microscope for the unpalatable investment. Gold has a very low forced to switch to another advisor, do you continue to pay them out of and their clients from protecting commission fees they receive. risk when measured this way. or a discount brokerage account your fund’s management fee? themselves with an asset that has Many investors have already left This presents an irreconcilable after theirs had been forcibly ter- Investors need to be very wary done just that for over 3,000 years. their advisors due to this and paradox for an advisor who had minated, had their entire gold po- of financial advice that does not fol- For a concrete case, in spite of switched to a do-it-yourself (DIY) recommended this asset for years sition liquidated. These activities low, or runs contrary to, these em- nothing having changed within discount brokerage account. They as an essential component of a bal- have the makings of a class-action pirically proven risk-management funds from BMG, my company, the switched into fund classes (such as anced and diversified approach to lawsuit, as investors’ portfolios practices. You have a choice. If your new rules mandated by the provin- D-class) where they aren’t paying wealth preservation. Gold’s ability were made less diversified and left investment advisor, as a result of cial regulators across the country high commissions to an advisor. to offset losses in traditional asset investors more exposed to market these new restrictions, cannot im- raised our official risk rating, mak- When an investor is told that classes (such as stocks and bonds) risks and losses. plement an effective risk manage- ing BMG funds unsuitable to many they cannot hold the investments in times of uncertainty, like we see The advisor’s position, and ment strategy, or fails to grasp the clients who have held these funds they want because of obtuse rules today, is a key reason to own it. rightly so, was that one of the basics of modern portfolio theory, for years. and are compelled to pay high These rules were implemented tenets of modern portfolio theory is then I strongly recommend that An investor in a typical bal- fees to an advisor for financial with protecting the investor but are predicated on the notion of diver- you contact us about DIY investing anced portfolio should be con- products they don’t want (or, al- actually the exact opposite, and sification – that is, a blend of assets and BMG Class D funds. cerned with not being properly ternatively, should have a greater now put the investor at risk. that move in different directions. The headwinds investors and diversified. For example, an equity allocation to), it leaves the in- Investors who were forced to sell advisors face regarding the outlook portfolio can be diversified by style, vestor wondering why they have their gold remained in overvalued for 2019 and beyond is daunting capitalization and sector – but all an advisor in the first place. “Gold’s ability to offset stocks and bonds, which studies enough. They don’t need the equities are categorized as the In addition, the last year has suggest are more positively corre- added problem of restricted advice same asset class. Gold, however, is been infuriating for investors and losses (elsewhere) is a key lated now than ever. not based on financial acumen but an asset class unto itself with no financial professionals due to the reason to own it.” Gold is well-known as a safe- on arbitrary rules and faulty logic. substitute, no counterparty risk, no arbitrary, misguided and potential- haven asset during times of uncer- You have worked your entire management risk and no default ly disastrous rule changes relating The unfortunate timing of last tainty. Since late September, it has life for your vision of a retirement risk. Therefore, concentration lim- to measuring investment risk. Es- year’s rule change flies in the face outperformed all traditional asset lifestyle. Don’t let the regulators its in the traditional sense do not sentially, many investors were told of reason as we witnessed an equi- classes. This trend is likely to con- and fund dealers tell you that you apply to monetary gold. they were no longer in control of ty bull market achieve three times tinue for the foreseeable future, as aren’t in charge of your own mon- There is no issue if a client their own wealth and were barred the size of the last two bull markets the world’s central banks seek to ey and leave you unprotected chooses to hold 100 per cent of his from holding monetary gold. In and global debt reach an alarming unwind the effects of their un- against the greatest threat to your or her portfolio in a money market summary, the regulators mandat- US$241 trillion – over three times precedented and deleterious mon- retirement dreams in 2019. fund. It should be equally risk-rat- ed that the sole criterion for mea- global GDP. Mean reversion is in- etary policies introduced after the ed for an investor to hold 100 per suring an investment’s level of risk evitable, and the magnitude of a last financial crisis. Those who ig- Nick Barisheff is the founder, pres- cent of their portfolio in the BMG was Standard Deviation. This ele- market unwind is unthinkable to nore what is happening right now ident and CEO of BMG Group, a Gold Fund. Currently, investors mentary investment tool measures the average investor today. are placing their financial well-be- company dedicated to providing would be prevented from holding both upside and downside moves, Financial professionals were ing in harm’s way. investors with a secure, cost-effec- more than 20 per cent in their over a 10-year period, and finds an told that if they did not comply with If your financial advisor, in ad- tive, transparent way to purchase MFDA portfolio. average of the two. the new risk-rating rules that they dition to recommending monetary and hold physical bullion. BMG is The only choice investors The irony is, of course, that in- could be terminated – meaning gold for diversification purposes, an Associate Member of the Lon- would have is to move their ac- vestors do not consider positive re- that they would lose their clients continues to advise on estate plan- don Bullion Market Association count to a discount brokerage ac- turns as risk – that is the objective. and livelihood. In many instances, ning, tax planning, insurance op- (LBMA) and an Associate Member count, and purchase Class D units. Investors only worry about down- this was the case. In conjunction tions and other financial of the Responsible Investment As- Class D units have a 1.5 per cent side risk. Investors are now being with the financial professional’s recommendations, then you are sociation (RIA) as well signatory to management fee instead of the re- penalized for above-average re- dilemma, many investors were livid being guided by a true financial the Six Principles of Responsible tail fee of 2.25 per cent, which in- turns even if downside risk is ex- upon being told that they had to re- professional worth their trailing Investments (United Nations-en- cludes a one per cent trailer fee to tremely low. I am not alone in the duce or redeem all of their physical commission compensation. dorsed Principles for Responsible the advisor. view that downside risk is the best precious metals investments. If you don’t feel like your advisor Investment – PRI). Corporate tax rates far lower than individuals’

Halpern from page 46 profits in tax-exempt permanent property that would have other- miums. He continues to invest his Mark Halpern is one of Canada’s life insurance. There are two wise been accumulated by the cor- money in his business. The effec- top life insurance advisors, a Cer- da’s Income Tax Act, in contrast to main benefits to making such an poration had it not purchased the tive net cost of his Life Insurance is tified Financial Planner (CFP), every other financial investment investment. life insurance policy. the tax-deductible interest cost Trust and Estate Practitioner (stocks, bonds, GICs, real estate, The savings component of the As a result, purchasing life in- only, amounting to two per cent (TEP) and CEO of WEALTHinsur- cryptocurrencies, other portfolio life insurance policy can grow on a surance can reduce the tax annually of the true premium. ance.com®. He guides successful investments, etc.). tax-free basis and a significant por- payable at death in respect of The insurance policy serves as business owners, who are already Why would a business owner tion, if not all, of the policy pro- shares of a private corporation, as collateral to secure a loan with a challenged for time, through the want it? ceeds payable at death can be paid it usually leads to a lower valua- Canadian chartered bank. The loan complex process of ensuring the Business owners use corporate- to the shareholder’s estate as a tax- tion for the corporate shares than is used to pay the premiums and the people and organizations they owned life insurance as a tax-effec- free capital dividend. had no life insurance been pur- insured pays only the interest on the care about are taken care of. If you tive way to accumulate passive Other income tax advantages: chased. (Please see my September loan, which is tax-deductible. The are like his other successful busi- wealth inside a company, to access Premiums are paid with corporate 2018 article, "Business Owner? Get loan will be paid off at death with ness owner clients, you are looking that wealth tax-free and to transfer after-tax dollars, which are taxed at Life Insurance") the Life Insurance proceeds. The to reduce your tax obligations, it tax-free to surviving beneficia- a much lower rate than the indi- An Immediate Financing Ar- balance will go to his family and preserve your wealth and leave a ries. It can also be used to fund vidual shareholder’s personal rate. rangement (IFA) is a strategy to get charity, virtually tax-free. legacy. Incompletions rob us of en- buy-sell agreements when other The corporate tax rate applicable Life Insurance without tying up Other benefits to consider ergy. Mark collaborates with your shareholders are involved. to active business income in On- your money paying premiums, se- • Convert fully taxable divi- professional advisory team to Businesses usually invest re- tario is approximately 15 per cent curing your tax and estate planning dends into tax free dividends achieve your desired outcomes. tained profits or surplus cash in and to investment income is 50 per liquidity needs. through the Capital Dividend Ac- His approach is simple. He makes taxable investments. This usually cent. The top individual marginal It is most commonly used by count (CDA) less the adjusted cost sure what is important to you gets occurs when the business owner tax rate in Ontario is approximate- business owners, real estate in- base. done. He gets you organized, pro- doesn’t need the extra income ly 53.5 per cent. vestors and developers, high-in- • Make charitable gifts without vides a big picture view of your fi- and has a higher marginal tax rate Upon death, an individual is come professionals, and people affecting cash flow or the capacity nancial affairs, determines your than their business. They take ad- deemed to dispose of his or her with substantial investment port- to make investments. strategy and helps you act. He will vantage of the low corporate tax property at its fair market value. As folios. • Increase an estate and transfer simplify the complicated, so you rates on active business income it pertains to shares of a corpora- A 65-year-old business owner wealth tax-free. and your family can rest easy. He by saving money in their corpora- tion that owns a life insurance pol- needed Permanent Life Insurance Don’t do this alone. can be reached at 416-364-2929, tions, if they don’t require it for icy, the Income Tax Act dictates to but wasn’t prepared to pay the pre- Get advice from an experienced toll-free at 1-866-566-2001 o personal purposes. value the life insurance policy at its miums. He was earning over 20 per team that includes your accountant, [email protected]. This accomplishes a tax deferral cash surrender value immediately cent annually on his business in- lawyer and a Certified Financial Visit WEALTHinsurance.com. Get only. Eventually, these assets will before death. This value will typi- vestments and reluctant to reduce Planner or Trust & Estate Practition- your FREE Estate Planning Toolkit come out of the corporation and be cally be significantly less than the his returns to buy Life Insurance. er. Our advisors across Canada are at WEALTHinsurance.com/toolk- taxed at high dividend tax rates. policy’s payout following death, We structured an IFA to cover available to help you. Contact us for its.html. Visit Invest some of the retained and far less than the value of the 100 per cent of his insurance pre- a free, no-obligation consultation. MarkHalpernBlog.com. 48 / February 8, 2019 INVESTOR’S DIGEST Issue 3 / 19 INVESTING 101 EXPANDING YOUR INVESTMENT KNOWLEDGE

ing family enterprise leaders who ensure that family members at the Ensuring the table have earned a qualified voice and schedule regular family meet- ings to manage the expectations of the upcoming generation, edu- next generation cate the upcoming generation and provide a forum to deal with fam- ily issues outside of the family builds on the business, the family factor can also be effectively managed. Suc- cess can be achieved. Understanding the cycle of last’s good work communication—which includes intent, action and effect—can be Former Vancouver Canucks co-owner and very useful. It might interest you to know that every conversation we chartered accountant Emily Griffiths-Hamilton enter into stands a two-thirds chance of being misunderstood. shares lessons from her career and firsthand When we are communicating, only experiences with wealth transition one-third of our communication process, the action part, is public: the words we speak or write, the Reprinted by permission of ating a multigenerational family gestures we make. publisher. All rights reserved. enterprise, I’d like to pass along The other two-thirds, our intent something a friend of mine, as the communicator and the ef- vast body of knowledge Chelsea Welch, once said to me: fect our communication has on the has been generated by "It’s not that the grass is greener listener and the listener’s assump- business cholars and re- on the other side. It’s that the tions, is private. In other words, in searchers investigating grass is greener where you fertilize two-thirds of communication, you howA successful family enterprises it." In other words, it’s not that don’t know the thinking behind remain robust across generations. other family enterprises are coin- what the speaker is saying and the My goal is to consolidate this in- cidentally successful. speaker can’t read the listener’s formation, giving you and your It’s that the family members in mind, including knowing the as- family a useful entry point for successful family enterprises sumptions the listener is making building a multigenerational fam- proactively tackle, through the about the speaker’s intentions. ily enterprise. I’ll also share sug- process of working together, the For instance, let’s say you are gestions, tips and strategies based primary reasons for failure by the family member responsible for on the common patterns found strengthening trust and commu- drafting and circulating minutes within successful families. nication within the family, prepar- after each family meeting. One se- In the decades over which my ing the upcoming generation for nior family member always re- career developed, I began to focus their potential future roles and re- minds you to get this job done on a on the topic of how successful sponsibilities, and creating a com- port individual family members of the family leader, on the other timely basis. Let’s look at this se- family enterprises thrive for gen- pelling and energizing shared vi- and the family as a whole. hand, are harder to evaluate, but nior family member’s possible in- erations. As a chartered accoun- sion. Family enterprises that fer- No one is born to leadership, by gaining the family members’ tent, what they might be thinking: tant working with other families tilize the grass in this way have a and this is just as true for family trust, the family leader can earn "Hey, I know how easy it who, like my own, had used the far greater likelihood of achieving leaders. One of the challenges for their respect. Without trust, fam- would’ve been for me to forget traditional tax- and control-driv- a multigenerational family enter- the family leader is that those in ily members will not follow the something like this at your age. en tools to deal with family enter- prise that sprawls across acres of later generations may not auto- family leader. Maybe a little reminder from me prise transitions, resulting in luscious, rolling green lawns. matically follow the leader as the The role of the family leader is a will help." That doesn’t sound so complex family corporate struc- A family business leader is second generation (children) of- thoughtful and sometimes emo- bad, right? But what if the senior tures that often included trusts someone who has aspired to and ten does of the first generation tional one, something not entered family member communicates this and holdcos, and later, as a fami- earned the leadership role. It’s (parents). Children follow parents into lightly—in fact, many family with a snappy comment like "Don’t ly enterprise advisor, I started to that person’s name at the top of first out of a need for security and leaders discover doing the right forget to get the minutes out ASAP." see that successful families your family business organiza- safety and later, for some, as a re- thing is not always the easy thing. Yikes! The effect on you could be shared a number of traits. How- tional chart. They’re the individu- sult of a lifetime habit. In later Being an effective family leader something like an irritated and de- ever, in so much of the informa- al ultimately accountable for the generations, a family leader is less means putting the needs of the en- fensive, "Does he think I’m useless? tion flooding the market on the success or failure of the business, likely to enjoy such unquestion- tire family, as well as of individual I always get the minutes out fast!" subject of successful multigener- and they play an integral role in ing acceptance. family members, before their own. Do you see where I’m going here? ational family enterprises, these successful family business transi- It means nurturing the develop- The effect our communication traits seemed lost in a sea of un- tion plans. Your Business, Your Family, ment of each family member while does not necessarily line up with necessary complications. From a business perspective, Their Future: How to Ensure maintaining a focus on the collec- our intentions. The importance of a mission or this is the person who has likely Your Family Enterprise tive good. It means showing you Communication easily breaks a vision—and more specifically, I charted a life course to earn their Thrives for Generations have everyone’s back by ensuring down when we, as listeners, start would add, a shared vision—can’t role as leader of the family busi- accountability to whatever the by assuming the intention behind By Emily Griffiths-Hamilton be overstated in the context of a ness ownership and/or manage- family’s collective goal might be. It someone’s words is negative. How- successful family enterprise. A ment group, gaining leadership Figure 1 Publishing means having tough conversations ever, when, as speakers, we pay at- strong, compelling, shared vision skills inside and/or outside the Copyright 2018 with individuals who threaten the tention to the effects of our com- will energize a unified, committed family business, reading books $25, 168 pages good of the collective family, not to munication and when, as listeners, ownership base. With a unified written by the greats, pursuing an punish them but to help them to we assume positive intentions, we ownership base, harmony is applicable education like a pro- Members of a larger, more di- get back on course. increase the likelihood of having achieved, which means a family fessional business degree, joining verse cousin group may question Family enterprises are special positive, dynamic conversations. business is less likely to be torn a peer-to-peer leadership organi- and challenge decisions being entities. To run them successfully It’s important to recognize the apart by the seeds of discontent. I zation, working with a mentor or a made—and this is actually good requires paying attention to the effect that various forms of com- compare the work a family does coach, etc. The family leader, on news. The family enterprise is three fundamental systems at munication have on trust. Firing here to a game of tug-of-war. the other hand, is the glue in a strengthened when the upcoming work: the family, family business off texts and short emails can work When family members are on the united family. generation is open-minded and ownership and family business well when trust is high and every- same side of the table, pulling in Unity is something a multigen- questions the status quo. A good management. Management is the one assumes that everyone has the the same direction, they will win erational family can’t have too family leader will encourage this system that is most easily ad- best of intentions. However, when the game. When family members much of. And yet the importance questioning from those who have dressed, since it is taught in busi- trust is low or a particularly thorny start pulling in opposite direc- of a family leader is often over- earned a voice, understanding that ness schools across the globe. Less issue needs to be resolved, it’s best tions, they will lose, ending up in looked, not recognized until the differing talents and expertise will attention has been devoted to to meet in a face-to-face environ- the mud. An epic battle in a high- family begins to rupture at its be the building blocks for the suc- ownership, but that system too ment where there is less chance of profile family is the stuff of stories weakest points when the current cess of their multigenerational can be easily handled once the miscommunication. Furthermore, of failed family business transi- family leader is gone. Family family enterprise. critical role of ownership is un- showing up in person and demon- tions that gain significant, often members follow a family leader The upcoming family leader derstood. The family factor is strating a genuine commitment to embarrassing, media attention. not because of coercion but out of will have to earn followers. The more challenging because emo- working together to resolve tricky As you move from privately respect and loyalty for everything skill set of a family business lead- tions can get in the way of making issues gives family members an owning your business toward cre- the family leader has done to sup- er is fairly easy to assess. The skills good decisions. However, by hav- opportunity to build trust. INVESTOR’S DIGEST 50 / February 8, 2019 Issue 3 / 19 INCOME TRUST INSIDER

Essential information on the most widely covered income trusts by leading analysts across Canada

REITS may very well be at risk. are trading at 15.1 times 2019 their funds ternalization of its property management “Chemtrade’s current annual dividend from operations per unit ($0.63), function to allow for greater scalability and Chemtrade Logistics of $1.20 per share is yielding about 11 per approximately six per cent above their cost savings; and graduation to the Toronto Global slowdown worries cent,” they say. “While free cash flow (FCF) projected net asset value (NAV) of $9. Stock Exchange from the TSX Venture,” says lead to target cut covers dividend in our base case (payout of “Summit is the only Canadian-listed the analyst. Citing concerns about a global approximately 70 per cent), there is a risk of REIT that provides investors with focused “Combined with accelerating per-unit ac- slowdown in the chemicals space, CIBC inadequate FCF generation to cover the exposure to improving Canadian cretion, an improving payout ratio, and a sta- World Markets analysts Jacob Bout, Rahul dividend in our downside scenario. (particularly GTA) industrial real estate ble balance sheet, we believe these catalysts Malhotra and Ioan Ilea substantially cut “We do not anticipate the firm breaking sector fundamentals, combined with a should drive PRV.UN to deliver strong risk- their target price for Chemtrade Logistics its financial covenants; net debt-to-EBITDA niche investment in the development of adjusted returns in 2019. Income Fund (CHE.UN-TSX, $10.80). (excluding $627 million in convertible debt) Canadian data centre properties,” say the “PRO’s portfolio as of third-quarter In addition to reducing their remains well clear of the five times analysts. 2018 consists of 76 properties (will be 84 recommendation to “neutral” from covenant.” “Summit offers investors an attractive upon close of the most recent transactions) “outperformer,” the analysts slash their long-term NAV per unit growth profile, comprising three million square feet of 12-month target price to $14 per share Summit Industrial Income reflecting the potential for further Canadian gross leasable area (will be approximately from $20. They also lower their earnings REIT closes out the year strongly industrial cap rate compression, accelerating 3.7 million square feet) with a 98 per cent before interest, taxes, depreciation and with industrial portfolio buys rent growth, and the stabilization of its initial occupancy rate, 6.5-year average lease amortization (EBITDA) projection. In a Dec. 12, 2018 research note, IA data centre investments (approximately six term, and approximately 50 per cent expo- “Similar to the rest of our chemicals Securities analysts Brad Sturges, Carl per cent of 2018 year-to-date NOI).” sure to investment grade tenants. Base rent coverage, we are taking down our target Burton and Ian Ho cover Summit Industrial exposure by asset class as of the third quar- multiple to reflect ongoing concerns of a Income REIT’s (SMU.UN-TSX, $9.50) deal PRO REIT ter was roughly 54 per cent retail, 13 per global slowdown (target multiple goes to buy three industrial portfolios for around REIT lands ‘special cent mixed-use, seven per cent office, and from 8.5 times to seven times), along with $329 million as well as its move to issue situations’ top pick 26 per cent industrial; along with 51 per the current uncertain economic approximately 15.1 million units as part of a PRO REIT (PRV.UN-TSX/VEN, $1.98) cent Maritimes, 20 per cent Quebec, 22 per environment / cyclicality of chlor-alkali,” common equity offering that raised gross nets the top spot in Haywood Securities’ cent Western Canada, and seven per cent say Messrs. Bout, Malhotra and Ilea in a proceeds of about $140 million. “Special Situations” space due to some cata- Ontario.” Jan. 9, 2019 research note. The three industrial portfolios, which lysts expected this year, says analyst Colin Mr. Healey notes that the REIT’s debt-to- “Leverage also remains a concern, with include 15 industrial facilities, are located in Healey in a Dec. 12, 2018 research note. GBV for the third quarter of 2018 was 51 per net-debt-to-EBITDA multiple of 4.1 times the Greater Toronto Area, Ottawa, Montreal “North American equity markets experi- cent, which was better than the 60 per cent as of the third quarter of 2018. We believe and Alberta. enced rising volatility in 2018 as the nearly figure the quarter prior. The analyst, more- that CHE.UN will continue to be a ‘show “The three Canadian industrial decade-long bull market wavers in the face over, models this figure going to 58 per cent me’ story, given the number of portfolios include a strong mix of recently of tightening monetary policy and a deterio- by the end of 2019. operational/WSSC (Water Solutions and constructed Class A industrial facilities, rating growth outlook. We believe that “We model $85 million of new acquisi- Specialty Chemicals) legal reserve issues enhancing the REIT’s portfolio quality,” say greater equity market volatility in the coming tions being done throughout 2019, financed in 2018.” Messrs. Sturges, Burton and Ho. “Average quarters should increase the payoff from through a combination of free cash flow, Getting back to their EBITDA projection, in-place rents for the 15 industrial assets to bottom-up fundamental analysis in stock se- mortgage debt ($55 million), and an equity the analysts reduce the number to $75 be purchased by Summit are below lection as the results of passive investment issuance ($27 million),” says the analyst. million from $78 million for the fourth estimated market rents. Furthermore, the strategies deteriorate. Sectors with more “This supports adjusted funds from opera- quarter of 2018, and they cut their 2019 lease-up of vacant space in the Ottawa- deep value include REITs as they remain in a tions (AFFO) of $27 million (up 85 per cent EBITDA estimate to $348 million from $372 based assets provides further rental income strong upward trend. year-over-year) and AFFO per unit of $0.28 million. Their initial EBITDA estimate for upside potential.” “Upcoming catalysts over the next few (up 47 per cent).” 2020 is $365 million. The analysts rate the REIT a “buy,” and months include closing of latest transac- In addition to reiterating his “buy” rec- The analysts, after conducting a stress they boost their 12-month target price to tions that will bring it through the $500 mil- ommendation, the analyst sticks with his tar- test, also suggest that Chemtrade’s dividend $10.75 from $10. Summit’s units, they add, lion gross book value (GBV) threshold; in- get price of $2.55.

INCOME TRUST LAB

Essential information on the most widely covered income trusts by leading analysts across Canada

Jan. 21 52 - wk Market Distributions $ Yield % 2017 Payout Jan. 21 52 - wk Market Distributions $ Yield % 2017 Payout Income Trust Symbol Price $ Range $ Cap (m) $ 2017A 2018E 2019E 2017A 2018E 2019E Ratio % Income Trust Symbol Price $ Range $ Cap (m) $ 2017A 2018E 2019E 2017A 2018E 2019E Ratio %

InterRent REIT ...... IIP.UN . . . .13.21 . . . . .13.61-8.77 . . .1400 . . . . .0.25 . . . . .0.27 . . . .0.29 . . . .2.72 . . . . .2.04 . . . .2.20 . .65.80 BUSINESS TRUSTS Invesque Inc.* ...... IVQ.U . . . . .7.64 . . . . .9.53-6.20 . . . .405 . . . . .0.74 . . . . .0.74 . . . .0.74 . . . .8.40 . . . . .9.69 . . . .9.69 .147.30 Finance Killam Apartment REIT ...... KMP.UN . .16.46 . . . .17.02-12.59 . .1417 . . . . .0.62 . . . . .0.64 . . . .0.66 . . . .3.60 . . . . .3.89 . . . .4.01 . .86.00 Melcor REIT ...... MR.UN . . . .7.71 . . . . .8.64-7.96 . . . .102 . . . . .0.68 . . . . .0.68 . . . .0.68 . . . .7.93 . . . . .8.82 . . . .8.82 . .86.00 Brookfield Infra. Partners L.P.* BIP.UN . . .39.02 . . . .41.23-33.01 . .14228 . . . .1.74 . . . . .1.88 . . . .2.16 . . . .4.34 . . . . .4.82 . . . .5.54 . .68.00 Minto Apartment REIT ...... MI.UN . . . .18.43 . . . .19.79-15.45 . . .292 ...... - ...... 0.41 . . . .0.41 . . . .- ...... 2.22 . . . .2.22 ...... - Industrial Products Morguard REIT ...... MRT.UN . .12.33 . . . .14.09-10.46 . . .748 . . . . .0.96 . . . . .0.96 . . . .0.96 . . . .7.31 . . . . .7.79 . . . .7.79 . .91.40 Morguard N.A. Res. REIT . . . .MRG.UN . .16.78 . . . .18.50-13.17 . . .566 . . . . .0.64 . . . . .0.66 . . . .0.66 . . . .4.28 . . . . .3.93 . . . .3.93 . .54.70 Chemtrade Logistics I.F...... CHE.UN . .10.57 . . . .17.75-10.03 . . .979 . . . . .1.20 . . . . .1.20 . . . .1.20 . . . .7.78 . . . .11.35 . . .11.35 . .66.00 Nexus REIT ...... NXR.UN . . .1.96 . . . . .2.08-1.81 . . . .182 . . . . .0.16 . . . . .0.16 . . . .0.16 . . . .7.92 . . . . .8.16 . . . .8.16 . .86.10 Northview Apartment REIT . . .NVU.UN . .26.17 . . . .27.88-22.87 . .1471 . . . . .1.63 . . . . .1.63 . . . .1.63 . . . .6.52 . . . . .6.23 . . . .6.23 . .44.40 Merchandising Northwest Healthcare Prop. REIT NWH.UN . .10.59 . . . . .11.71-9.27 . . .1097 . . . . .0.80 . . . . .0.80 . . . .0.80 . . . .7.05 . . . . .7.55 . . . .7.55 .119.90 A&W Revenue Royalties . . . . .AW.UN . . .36.02 . . . .37.74-28.36 . . .450 . . . . .1.60 . . . . .1.69 . . . .1.75 . . . .4.54 . . . . .4.69 . . . .4.86 .102.02 Plaza Retail REIT ...... PLZ.UN . . . .3.98 . . . . .4.40-3.68 . . . .409 . . . . .0.27 . . . . .0.28 . . . .0.28 . . . .6.50 . . . . .7.04 . . . .7.04 . .77.10 Boston Pizza Royalties I.F. . . .BPF.UN . .17.09 . . . .21.63-13.82 . . .374 . . . . .1.38 . . . . .1.38 . . . .1.39 . . . .6.30 . . . . .8.07 . . . .8.13 .100.00 PRO REIT ...... PRV.UN . . .2.19 . . . . .2.45-1.80 . . . .187 . . . . .0.21 . . . . .0.21 . . . .0.21 . . . .9.13 . . . . .9.59 . . . .9.59 .111.00 Boyd Group I.F...... BYD.UN .119.37 . . . . .133-97.99 . . .2348 . . . . .0.52 . . . . .0.53 . . . .0.53 . . . .0.51 . . . . .0.44 . . . .0.44 . .10.02 Pure Multi-Family REIT L.P.* .RUF.U . . . . .6.19 . . . . .7.40-5.67 . . . .475 . . . . .0.38 . . . . .0.38 . . . .0.38 . . . .4.97 . . . . .6.14 . . . .6.14 .119.90 Riocan REIT ...... REI.UN . . .24.71 . . . .25.82-22.97 . .7527 . . . . .1.41 . . . . .1.44 . . . .1.44 . . . .5.79 . . . . .5.83 . . . .5.83 . .80.50 REAL ESTATE INVESTMENT TRUSTS (REITS) Slate Office REIT ...... SOT.UN . . .6.85 . . . . .8.20-5.65 . . . .479 . . . . .0.75 . . . . .0.75 . . . .0.75 . . . .9.21 . . . .10.95 . . .10.95 . .76.80 Slate Retail REIT ...... SRT.UN . .12.49 . . . .13.10-11.20 . . .527 . . . . .0.82 . . . . .0.85 . . . .0.85 . . . .6.26 . . . . .6.81 . . . .6.81 . .62.50 Real Estate SmartCentres REIT ...... SRU.UN . .32.57 . . . .32.64-28.14 . .4370 . . . . .1.71 . . . . .1.80 . . . .1.80 . . . .5.54 . . . . .5.53 . . . .5.53 . .82.80 Agellan Commercial REIT . . . .ACR.UN . .14.23 . . . .14.40-10.55 . . .469 . . . . .0.78 . . . . .0.81 . . . .0.81 . . . .5.50 . . . . .5.69 . . . .5.69 . .91.00 Summit Industrial Income REIT SMU.UN . .10.16 . . . . .10.35-7.51 . . .959 . . . . .0.51 . . . . .0.57 . . . .0.52 . . . .6.97 . . . . .5.61 . . . .5.12 . .90.70 Allied Properties REIT ...... AP.UN . . .46.01 . . . .46.08-38.71 . .4779 . . . . .1.53 . . . . .1.56 . . . .1.56 . . . .3.64 . . . . .3.39 . . . .3.39 . .72.20 True North Commercial REIT .TNT.UN . . .6.28 . . . . .6.98-5.30 . . . .359 . . . . .0.59 . . . . .0.59 . . . .0.59 . . . .8.85 . . . . .9.39 . . . .9.39 . .99.00 American Hotel Income Prop. REIT * HOT.U . . . .5.28 . . . . .7.63-4.30 . . . .412 . . . . .0.65 . . . . .0.65 . . . .0.65 . . . .8.96 . . . .12.31 . . .12.27 . .90.90 WPT Industrial REIT * ...... WIR.U . . . .12.95 . . . .14.49-12.10 . . .607 . . . . .0.76 . . . . .0.76 . . . .0.76 . . . .5.97 . . . . .5.87 . . . .5.87 . .91.40 Artis REIT ...... AX.UN . . . .10.10 . . . . .14.42-8.75 . . .1534 . . . . .1.08 . . . . .0.54 . . . .0.54 . . . .7.66 . . . . .5.35 . . . .5.35 . .75.50 Automotive Properties REIT . .APR.UN . . .9.87 . . . . .11.47-8.45 . . .215 . . . . .0.80 . . . . .0.80 . . . .0.80 . . . .7.37 . . . . .8.11 . . . .8.11 . .82.50 RESOURCE TRUSTS Boardwalk REIT ...... BEI.UN . . .39.92 . . . .52.43-36.47 . .1844 . . . . .2.15 . . . . .1.00 . . . .1.00 . . . .4.80 . . . . .2.51 . . . .2.51 .106.80 Oil & Gas - Producers BSR REIT * ...... HOM.U . . . .8.96 . . . . .9.70-7.12 . . . .149 ...... - ...... 0.50 . . . .0.52 . . . .- ...... 5.58 . . . .5.80 ...... - BTB REIT ...... BTB.UN . . .4.59 . . . . .4.94-4.03 . . . .254 . . . . .0.42 . . . . .0.42 . . . .0.42 . . . .9.15 . . . . .9.15 . . . .9.15 . .93.70 Crius Energy Trust ...... KWH.UN . . .4.87 . . . . .9.47-4.01 . . . .276 . . . . .0.81 . . . . .0.82 . . . .0.84 . . .11.45 . . . .16.84 . . .17.25 . .63.80 Cdn Apt. Properties REIT . . . .CAR.UN . .44.73 . . . .49.45-34.43 . .6781 . . . . .1.27 . . . . .1.32 . . . .1.33 . . . .3.42 . . . . .2.95 . . . .2.97 . .70.30 Cdn. Tire REIT ...... CRT.UN . .12.47 . . . .14.55-11.26 . .1197 . . . . .0.70 . . . . .0.71 . . . .0.73 . . . .4.84 . . . . .5.69 . . . .5.85 . .76.00 UTILITY TRUSTS Chartwell Retirement ResidencesCSH.UN . .14.71 . . . .16.00-13.42 . .3123 . . . . .0.55 . . . . .0.59 . . . .0.59 . . . .3.53 . . . . .4.00 . . . .4.00 . .61.68 Choice Properties REIT . . . . .CHP.UN . .12.32 . . . .13.26-11.19 . .3427 . . . . .0.73 . . . . .0.74 . . . .0.76 . . . .5.47 . . . . .6.01 . . . .6.17 . .68.10 Utilities Cominar REIT ...... CUF.UN . .11.91 . . . .14.95-10.41 . .2167 . . . . .1.33 . . . . .0.74 . . . .0.72 . . . .9.25 . . . . .6.21 . . . .6.05 . .94.70 Brookfield Ren. Energy Partners L.P.* BEP.UN . .28.23 . . . .31.31-24.98 . .5048 . . . . .1.87 . . . . .1.96 . . . .2.06 . . . .5.48 . . . . .6.94 . . . .7.30 . .98.40 Crombie REIT ...... CRR.UN . .13.49 . . . .13.70-12.14 . .1209 . . . . .0.89 . . . . .0.89 . . . .0.89 . . . .6.45 . . . . .6.60 . . . .6.60 . .73.60 Dream Hard Asset Alt. Trust . .DRA.UN . . .6.75 . . . . .7.09-5.90 . . . .490 . . . . .0.33 . . . . .0.33 . . . .0.40 . . . .4.78 . . . . .4.89 . . . .5.92 ...... - Dream Industrial REIT ...... DIR.UN . . .10.56 . . . . .10.98-8.85 . . .972 . . . . .0.70 . . . . .0.70 . . . .0.70 . . . .6.70 . . . . .6.63 . . . .6.63 . .77.30 Explanation of Terms Dream Office REIT ...... D.UN . . . . .22.93 . . . .26.01-20.72 . .1361 . . . . .1.25 . . . . .1.00 . . . .1.00 . . . .4.20 . . . . .4.36 . . . .4.36 . .75.20 Market Capitalization is calculated by multiplying the current unit price by the number of units outstanding as of January 2019. Dream Global Int'l REIT . . . . .DRG.UN . .12.69 . . . .15.43-11.40 . .2444 . . . . .0.80 . . . . .0.80 . . . .0.80 . . . .6.55 . . . . .6.30 . . . .6.30 . .48.20 Distribution is the amount of cash the income trust pays or is expected to pay annually. Yield is the annual distribution expressed as Granite REIT ...... GRT.UN . .57.30 . . . .58.97-47.93 . .2621 . . . . .2.60 . . . . .2.72 . . . .2.72 . . . .5.30 . . . . .4.75 . . . .4.75 . .78.00 a percentage of the latest unit price. Payout ratio is the proportion of earnings paid out as dividends to shareholders. H&R REIT ...... HR.UN . . .21.95 . . . .22.16-18.94 . .6271 . . . . .1.38 . . . . .1.38 . . . .1.38 . . . .6.46 . . . . .6.29 . . . .6.29 . .75.00 *Distribution and unit price listed in U.S. dollars. Inovalis REIT ...... INO.UN . . .10.01 . . . . .10.60-9.12 . . .235 . . . . .0.82 . . . . .0.83 . . . .0.83 . . . .8.27 . . . . .8.29 . . . .8.29 . .99.70 INVESTOR’S DIGEST

52 / February 8, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 3 / 19

THREE-MONTH FOLLOWUP How September research has fared Updated recommendations from our Oct. 5, 2018 edition

AltaGas Ltd. that the 2018 Farm Bill was recent- Farms will be one of the most opment triggered a US$2 million The analysts, who stick with ALA-TSX, $14.10 ($25.14*) ly okayed by the U.S. Congress. meaningful suppliers.” milestone payment as required their “outperform” recommenda- AltaGas Ltd.’s entry into defini- “The U.S. Congress approved Mr. Cooper and Ms. Xu — who due to the 2013 agreement be- tion with “high risk/speculation” tive agreements with Kelt Explo- the 2018 Farm Bill and has been say that the company’s stock does tween the two aforementioned rating, add that the company’s an- ration Ltd. to provide an energy in- passed by President Trump,” say not adequately reflect the worth of companies. Mr. Novak reiterated nouncement was a positive. frastructure solution for the liquids- the analysts. its Canadian holdings and does his “outperform” recommenda- “Overall, we view the preclinical rich Inga Montney development in “As part of the bill, hemp with not reflect any of the value of its tion and 12-month target share data presented by ZYME as northeast British Columbia was the low amounts of THC (0.3 per U.S. assets — stick with their “buy” price of US$27. strongly supporting ZW49’s poten- topic up for discussion in a Sept. 5, cent) will be removed from the recommendation and $13.50 tar- In a research note on Dec. 10, tial position in the clinic as a best- 2018 research note by IA Securities Controlled Substances Act, which get price. 2018, Mr. Novak and fellow Ray- in-class HER2-targeted ADC,” say analyst Michael Charlton. will open-up interstate commerce mond James Financial analyst Ar- Messrs. Novak and Kshetrapal. AltaGas said that commercial for hemp products including Zymeworks Inc. chit Kshetrapal cover a develop- “In the press release, ZYME arrangements underpinned the ex- cannabidiol (CBD) as well as ZYME-TSX, $17.48 ($18.28*); ment that saw Zymeworks shed once again reiterated that its IND pansion of its Townsend Complex, banking capabilities. We believe ZYME-NYSE, US$13.14 (US$13.48*) some light on recent studies. has been filed, in-line with former including the addition of 198 mil- this is a hugely positive develop- When Raymond James Finan- “On Saturday, ZYME presented guidance and as articulated on lion cubic feet per day of process- ment for the industry and Village cial analyst David Novak covered its Good Lab Practice toxicology Nov. 27, 2018. We anticipate first ing capacity at the Townsend Deep Farms in particular. Zymeworks in a Sept. 5, 2018 re- and IND-enabling efficacy studies patient dosed within the first quar- Cut Facility. Commercial opera- “In a press release this morning, search note, he said that the Van- utilizing its HER2-targeted bi- ter of 2019 and believe recruitment tions were set to commence in the the company indicated that the full couver-based biotechnology com- paratopic ADC, ZW49, at SABCS18,” is likely to be more rapid than we fourth quarter of 2019. and unambiguous legalization of pany disclosed that Eli Lilly & Co. say the analysts. would typically expect for a new Mr. Charlton reiterated his hemp, and especially hemp-de- had earlier that same month sent “The data contains incremental clinical therapeutic, as ZYME will “buy” recommendation and his rived CBD products, creates a in an investigational new drug new insights into the preclinical likely be able to leverage the cur- $29.50 per share target price. tremendous global opportunity (IND) for a bispecific antibody de- characterization of ZW49 support- rent clinical sites involved in the In a Jan. 11, 2019 research note, and Village Farms intends to be a veloped using Zymework’s Azy- ing its potential of representing a ZW25 ongoing trial.” IA Securities analysts Elias Fosco- leader in the nascent industry. metric platform. best in class HER2-targeted anti- los, Chelsea Bedrejo and Matthew “We continue to believe Village The analyst said that the devel- body drug conjugate.” * Price three months ago Weekes say that they expect that the company, with a new CEO at the helm and after closing its merger with WGL Holdings Inc., ANNUAL FOLLOWUP will execute well in 2019. “Looking into 2019, AltaGas of- fers investors tremendous upside but simultaneously carries a signif- What was said 12 months ago icant amount of execution risk in terms of asset sale valuations and operational performance,” say the Updated recommendations from our Feb. 9, 2018 edition analysts. “Over the next two quar- ters we are expecting to see a sig- Neo Performance Further, we are downgrading the “Pembina reported a capital The acquisitions catapulted the nificant contribution to EBITDA Materials Inc. stock from ‘outperformer’ to ‘neu- budget for 2019 of $1.6 billion, of company into the top spot in terms from WGL along with the tailwind NEO-TSX, $16.59 ($17.90*) tral’ to account for a potentially which approximately $1.25 billion of producers of official Ontario boost from the commissioning of Neo Performance Materials of- prolonged deal closing, as well as is sanctioned projects and $350 wines in the province. the Ridley Island Propane Export ficially joined CIBC World Markets’ our limited familiarity with million is unsanctioned,” say the “We spoke with management Terminal.” coverage universe when, in a Jan. 3, Luxfer’s business prospects. While analysts.”The variance in our esti- about the integration of the three Messrs. Foscolos and Weekes as 2018 research note, analyst Scott our new price target implies an ap- mate of $975 million for unsanc- wineries in British Columbia,” said well as Ms. Bedrejo stick with their Fromson kicked off coverage with proximately nine per cent return tioned projects is primarily due to Mr. Pow. “Management indicated “buy” recommendation and $21 a “neutral” recommendation and a from the current price (approxi- the timing of Pipeline projects that they are extremely happy with target price. $19 price target. mately 16 per cent on an annual- coming online. the acquisitions, the integration is The analyst explained that there ized basis, assuming an end of sec- “The capital budget is weighted on track, and the financial perfor- Village Farms were substantial opportunities for ond quarter 2019 deal closing), we 53 per cent towards the Pipeline di- mance to-date is in line with previ- International Inc. the company to grow revenues and see the investment case as one vision, 25 per cent to the Facilities ous expectations.” VFF-TSX, $5.57 ($6.17*) cash flow in the rare earth space. better suited to investors with division, and six per cent to the Andrew Peller’s results for the Village Farms International ap- He explained that his view was higher-risk tolerances.” marketing and new ventures divi- second quarter of 2018 were south pointed Mandesh Dosanjh to the tempered by NEO’s exposure to sion. The pipeline capital spending of what the analyst expected. Mr. president and CEO posts at China, which he said was by far the Pembina Pipeline Corp. will be allocated to the Phase VI Pow added that he expected an- cannabis joint venture Pure Sun world’s largest rare earths player. PPL-TSX, $43.26 ($45.43*); and Phase VII expansions of the other solid quarter with the third Farms (PSF), according to Beacon Said Mr. Fromson, “NEO’s PBA-NYSE, US$36.62 (US$36.54*) Peace Pipeline to be in service in quarter of 2018, which wrapped up Securities analysts Doug Cooper growth strategy is three-pronged: When IA Securities covered the second half of 2019 and the first on Dec. 31, 2017. and David Kideckel in an Aug. 21, Organic growth from market share Pembina Pipeline in a Jan. 3, 2018 half of 2021, respectively.” Mr. Pow opted for a “buy” rec- 2018 research note. gains and new product applica- research note, analyst Elias Fosco- The company also reported ad- ommendation and $17.25 target “We believe this an excellent tions; new products, leveraging los said that the Calgary-based en- justed EBITDA guidance for 2019 price. hire,” said the analysts. “The ap- NEO’s research and development ergy infrastructure company had of between $2.8 billion and $3 bil- In a followup research note on pointment of Mr. Dosanjh marries capabilities and strong customer added four new positions to its ex- lion, which is in line with the ana- Jan. 10, 2019, Mr. Pow says that An- the two most important aspects of relationships; and acquisitions fi- ecutive team due to enhanced lysts’ and the consensus estimate drew Peller demonstrated strong the business. The current manage- nanced with its cash-positive bal- scale and scope at the company. of $2.9 billion. performance in 2018. ment team of Village Farms has, ance sheet.” With the announcement, The analysts reiterate their “Andrew Peller showed strong without a doubt, the greatest expe- In a followup research note on Pembina doubled the size of its “strong buy” recommendation. operational improvements in rience in terms of agricultural Dec. 18, 2018, Mr. Fromson and executive team to eight members 2018 from a focus on higher priced growing. Village Farms also has ex- fellow CIBC analyst Ace Mirali cov- from four members, adding four Andrew Peller Ltd. premium wines and spirits,” he perience in branding, packaging er the friendly deal between NEO newly-created senior vice-presi- ADW.A-TSX, $14.45 ($16.25*) says. “Although this drove gross and selling produce through retail and Luxfer Holdings PLC, a U.K.- dent positions. In a Jan. 10, 2018 research note, margin improvements, a step up channels.” based producer of highly engi- Mr. Foscolos, who reiterated his Acumen Capital analyst Brian Pow in operating expenses resulted in The analysts added that the ap- neered advanced material. “buy” recommendation but re- said that Andrew Peller saw mar- weaker than expected EBITDA pointment could, among other “NEO and Luxfer Holdings an- frained from issuing a target share gin expansion driven by organic performance. things, point to a substantial strat- nounced a friendly cash and share price, interpreted the news as a growth and operational improve- “A big focus for the company egy shift for PSF to a vertically inte- deal today, with the latter as the positive sign of Pembina’s progress ments. was also the integration of the three grated producer from a pure surviving entity,” explain the ana- in integrating operations with With regards to sales, the ana- B.C. wineries acquired October wholesaler. lysts. “In the current environment Veresen Inc. The two companies lyst noted that they benefited 2017. The efforts by management Messrs. Cooper and Kideckel – a jittery market (particularly for merged in October 2018. “from solid growth across the ma- to rationalize the portfolio should reiterated their “buy” recommen- small caps), an unrelenting In a followup research note on jority of Andrew Peller’s trade have lasting positive effects on mar- dation but boosted their 12- U.S./China trade dispute and a Dec. 11, 2018, Mr. Foscolos, channels, selective price increases, gin performance that will create month target share price to $13.50 softening vehicle sales outlook – we Chelsea Bedrejo and Matthew and the introduction of new prod- value as the company scales.” from $12. see the deal as positive for NEO Weekes cover Pembina’s capital ucts and new product categories.” The analyst keeps his “buy” Fast-forwarding a few months and its shareholders. program and its 2019 earnings According to the analyst, the recommendation and $19 target later, Mr. Cooper and fellow Bea- “We are reducing our price tar- before interest, taxes deprecia- company wrapped up the acquisi- share price. con Securities analyst Susan Xu say get from $20.50 to $18, in line with tion and amortization (EBITDA) tions of three wineries located in in a Dec. 13, 2018 research note implied transaction valuation. guidance. British Columbia in October 2018. * Price one year ago Issue 3 / 19 INVESTOR’S DIGEST February 8, 2019 / 53 VIEWS OF LEADING CANADIAN ANALYSTS

Every issue of Investor’s Digest contains upwards Toronto, providing the basis for it is abandoning pursuit of Music WSP Global particularly strong organic growth Choice (in whole or in part), its pri- of 50 digested research reports from Canada’s in Ontario. mary competitor in the U.S. mar- RAYMOND JAMES “We expect further momentum ket. Although the lack of success on top analysts. The reports listed below can be FINANCIAL in the Americas, with the U.S. Music Choice is disappointing, we What’s in store for 2019 transportation markets still in great had not built in positive expecta- found on pages 52 to 61. shape and the Latin American op- tions that Stingray would receive COMPANIES Digested from a Jan. 9 report erations now better aligned follow- more than a token ownership posi- by analysts Frederic Bastien ing last year’s integration of the tion at this point; therefore, this an- IN THIS ISSUE and Ben Cherniavsky Poch, Concol and legacy Genivar nouncement is certainly not an is- businesses. sue for the story. In fact, given the Messrs. Bastien and Cherniavsky “Across the pond WSP has been management focus required to in- AGT Food and Ingredients iAnthus Capital Holdings CIBC World Markets ...... Neutral Beacon Securities ...... Buy say they are comfortable signing up retained for the integration of tegrate Newfoundland Capital for what promises to be a volatile Crossrail’s complex railway sys- Corp., and the pursuit of organic AltaGas Knight Therapeutics 2019 with WSP Global Inc. (WSP- tems, a large mandate that not only growth (such as Altice USA), we IA Securities ...... Buy Mackie Research ...... Hold TSX, $60.57). eases concerns over Brexit and de- would regard the abandoned Mu- Altura Energy Kraken Robotics They assert, “Critical to our se- celerating economic growth in the sic Choice deal as a positive for the Beacon Securities ...... Buy Beacon Securities ...... Buy lection process was the above-av- Nordics, but also supports a posi- story right now. Andrew Peller Leagold Mining erage visibility on revenue growth tive outlook for the EMEIA region. “Stingray continues to generate Acumen Capital ...... Buy CIBC World Markets . . . .Outperform that this pure-play engineering Similarly, we take some comfort in strong revenue growth (bolstered Aphria Neo Performance Materials firm currently offers. For one, knowing WSP is operating pru- by an active and targeted M&A Haywood Securities ...... Buy CIBC World Markets ...... Neutral WSP’s ongoing role as trusted advi- dently in Asia and the Middle East, strategy), with strong flow-through Auxly Cannabis Group Nokia sor on some of the world’s most where visibility on growth is often to FCF given operating leverage in AltaCorp Capital ...... Outperform BMO Capital Markets . . .Outperform complex and long-cycle trans- as clear as mud. This is allowing the the business model and limited Barkerville Gold Mines Nutrien portation projects, combined with company to outperform its peers capex requirements. PI Financial ...... Buy CIBC World Markets . . .Outperform its limited exposure to highly cycli- on both margins and DSOs, and at- “We continue to see runway for Barrick Gold Obsidian Energy cal energy and resource sectors, tract new talent. the company to materially grow CIBC World Markets . . .Outperform AltaCorp Capital ...... Outperform provide a supportive backdrop for “We are increasing our adjusted FCF over the next few years, and Bristol-Myers Squibb Painted Pony Energy continued organic growth. EPS forecasts for the fourth quarter see the acquisition of NCC (and its BMO Capital Markets ...... Neutral AltaCorp Capital . . . .Sector perform “What’s more, the company of 2018 and 2019 to the tune of strong FCF) acting as a funding ve- CannTrust Holdings Pembina Pipeline can count on newly acquired Louis $0.01 and $0.05, respectively, to hicle for future growth opportuni- Beacon Securities ...... Buy IA Securities ...... Buy Berger to contribute an incremen- 0.81 and $3.70.” ties, both organic and acquired.” Canopy Rivers People tal 10 per cent to its top-line this WSP is one of the world’s leading Stingray is a leading business- PI Financial ...... Buy Acumen Capital ...... Buy year, leaving very little in our fi- professional services firms, working to-business multi-platform music CareTrust REIT Petrus Resources nancial forecasts to chance.” with governments, businesses ar- and in-store media solutions BMO Capital Markets . . .Outperform Raymond James As such the analysts give the chitects and planners and provid- provider operating on a global CGI Group Financial ...... Outperform stock an “outperform” rating and ing integrated solutions across scale, reaching an estimated 400 Raymond James Pollard Banknote $80 target share price. many disciplines. million Pay-TV subscribers (or Financial ...... Outperform Acumen Capital ...... Buy With regards to Canadian engi- households) in 152 countries. Constellation Software Purpose Marijuana neering companies, the analysts Geared towards individuals and CIBC World Markets . . .Outperform Opportunities Fund did point out that, “On balance, Stingray Group businesses alike, Stingray’s products our view is that the group will con- include the leading digital music Correvio Pharma Purpose Investment ...... Buy Mackie Research ...... Hold Purpose Premium Yield Fund tinue to capitalize on powerful CIBC WORLD MARKETS and video services. Stingray also of- long-term trends favouring infras- fers various business solutions, in- Domtar Purpose Investment ...... Buy Music streamer lands tructure investments, increased ur- cluding music and digital display- CIBC World Markets ...... Neutral Questor Technology Altice USA Acumen Capital ...... Buy banization and connectivity. based solutions through its Stingray Endeavour Silver “We also believe there is a lot Business division, and is now a ma- Sangoma Technologies PI Financial ...... Buy more consolidation to be done, Digested from a Jan. 2 report terial player in the terrestrial radio Acumen Capital ...... Buy Equinox Gold which should provide WSP Glob- by analysts Robert Bek market given its acquisition of NCC. Raymond James SEMAFO al, Stantec and SNC-Lavalin with and Kulveer Grewal Financial ...... Outperform Haywood Securities ...... Buy opportunities to further their lead- Essential Energy Services SilverCrest Metals ership of the sector. But with ris- Stingray Group Inc.’s (RAY.A- CannTrust Raymond James PI Financial ...... Buy ing interest rates and trade fric- TSX, $6.68) new deal with Altice Financial ...... Outperform Stingray Group tions pointing to a global growth USA is a strong positive lever for fur- Holdings EXFO CIBC World Markets . . .Outperform slowdown, we expect design and ther organic growth in the years CIBC World Markets ...... Neutral Theratechnologies engineering activity levels to fol- ahead, as per Messrs Bek and Grew- BEACON SECURITIES Flower One Holdings Mackie Research ...... Hold low suit in 2019. al. While the company’s the failure Coming to America Mackie Research ...... Buy Valens GroWorks Putting aside the fact that all to acquire Music Choice Co. was General Motors AltaCorp Capital ...... Outperform four engineering stocks we cover disappointing to the analysts, they Digested from a Jan. 8 report BMO Capital Village Farms International look deceivingly attractive at cur- do assert it reduces some near-term by analyst Russell Stanley Markets ...... Outperform Beacon Securities ...... Buy rent valuations, we believe in- risk. The analysts give the stock an GT Gold WSP Global vestors will be best served owning “outperformer” recommendation CannTrust Holdings Inc. PI Financial ...... Buy Raymond James large-cap companies with solid and $11 target share price. (TRST-TSX, $7.24) - a licensed HCP REIT Financial ...... Outperform track records of revenue and earn- Providing further details the an- producer of cannabis products - BMO Capital Markets . . .Outperform Zymeworks ings growth, pristine balance alysts note, “In the final hours of announced it has applied for a Hi-Crush Partners LP Raymond James sheets, diversified revenues and 2018, Stingray announced a new New York Stock Exchange (NYSE) AltaCorp Capital . . . .Underperform Financial ...... Outperform proven management. Enter WSP, content deal with Altice USA, the listing. The company had previ- our Best Pick for 2019, which we es- former Cablevision base and the ously indicated plans to pursue timate has a clear path to mid-teen fourth-largest U.S. multiple sys- such a listing, but its announce- revenue growth and room for con- tems operator (MSO). Stingray will ment is still positive as it demon- FREE service for Digest subscribers only! tinued margin improvement. bring its 50 music channels and strates to Mr. Stanley that progress Investor’s Digest E-mail Hotline “For proof consider that of the hundreds of on-demand music is being made. He keeps his “buy” $7 billion in net revenues we pro- videos to Altice USA’s subscribers. recommendation and $21-per- The exclusive Investor’s Digest E-mail Hotline brings you ject for 2019, only about $100 mil- “Altice USA also gets rights to share target price. late-breaking developments that affects your investments. A lion (less than two per cent) stems other Stingray offerings, such as “TRST has lagged its closest $75.00 value, the e-mail hotline is FREE for subscribers. from additional tuck-ins we expect linear music, streaming video on peers of late: HEXO Corp. is up 23 COMPLETE BELOW AND RETURN TODAY! WSP to complete in the second half demand (SVOD) and TV apps. This per cent over the last month, while of 2019. That may ultimately prove is a strong deal for Stingray, as it OrganiGram Holdings Inc. is up 17 Name: conservative, in our view, consid- materially expands its reach in the per cent. Over the same period, ering the strength of the firm’s bal- U.S. cable market, which is a key el- TRST is down seven per cent, so E-mail: ance sheet. ement of our positive thesis on the the stock is due for a rally just to “On the home front, WSP is company. We have not adjusted keep pace with the peers. Progress Postal Code: shortlisted for a number of P3 pro- numbers specifically, but we be- on the NYSE listing should put a jects that will soon be awarded. lieve that our inherent organic charge into the stock. For fastest service call toll free: 1-800-804-8846. Or fax your order. These include the Trillium and growth assumptions are now well “A U.S. exchange listing would Investor’s Digest of Canada, 133 Richmond St. W., Toronto, M5H 3M8 Confederations light rail transit ex- supported. significantly expand the compa- Tel: 416-869-1177 Fax: 416-869-0456 tensions in Ottawa as well as the “In addition to the Altice USA expansion of Highway 401 in deal, Stingray has announced that Continued on next page INVESTOR’S DIGEST

54 / February 8, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 3 / 19

Continued from preceding page censed producer of cannabis prod- positive (specifically potash at ap- ing, value-added product manu- significant upside in our estimates ucts, including dried flower, oils proximately 40 per cent EBITDA). facturing, research and develop- should the company announce fu- ny’s profile and investor audience, and capsules. Second, Nutrien will receive about ment, and distribution. ture supply agreements for inter- and should support meaningful US$5 billion in cash in the 2018 “We believe Auxly’s business national markets.” multiple expansion for TRST. fourth quarter from equity sales model positions the company for Auxly Cannabis Group is an in- There are currently just five Cana- Nutrien and internally generated FCF (free success in the rapidly evolving vestment and merchant company. dian licensed producers trading on cash flow). Lastly, the 2019 run-rate cannabis market, offering investors’ It seeks to provide investor returns U.S. exchanges. The multiple range CIBC WORLD MARKETS $600 million “synergy target is exposure to value-added activities through streams and capital appre- is considerable, ranging from eight Well-positioned to deliver achievable and should benefit that are expected to drive higher ciation in the cannabis industry of times the earnings forecast for profitability” as the year progress- and more defensible margins. Canada. Aphria Inc. on the low end up to growth es. With Nutrien’s diversified busi- “The strategy is focused on 187 times for Tilray Inc., with ness model (nitrogen and retail owning the activities that are ex- Canopy Growth Corp. at 38 times, Digested from a Jan. 8 report adding defensiveness) and strong pected to drive greater margin, People Cronos Group Inc. at 38 times, and by analysts Jacob Bout, Rahul balance sheet, the analysts believe specifically the midstream and Aurora Cannabis Inc. at a multiple Malhotra, and Ioan Ilea that the company will stand strong downstream (i.e. distribution) ac- ACUMEN CAPITAL of 20 rounding out the group. even if there is a global slowdown. tivities, while offloading the major- Analysts’ ‘top idea’ in “We already view CannTrust as Subsequent to the merger with With its head office in Saskatoon ity of the operational risks associ- significantly undervalued. It cur- Agrium and PotashCorp, Nutrien and corporate offices in, Saskatoon ated with the upstream (i.e. culti- 2019? Just trust People rently trades at approximately six Ltd. (NTR-TSX, $65.31; NTR-NYSE, and Calgary, Nutrien is the largest vation) activities, which are ex- times our 2020 estimated earnings US$47.74) is now the largest crop crop nutrient company in the world pected to generate lower margins, Digested from a Jan. 10 report before interest, taxes, depreciation nutrient company in the world. and the third largest natural re- as the market develops. by analysts Brian Pow and amortization (EBITDA) fore- Analysts Jacob Bout, Rahul Malho- source company in Canada. “What we believe to be the cen- and Nick Corcoran cast, a 62 per cent discount to the tra, and Ioan Ilea, believe the com- terpiece of Auxly’s midstream busi- multiple of 17 (average) for the pany is set for a strong 2019 and ness strategy is Dosecann, their People Corp. (PEO-TSX/VEN, broad peer group, and an 82 per 2020 and have rolled out their 2020 Auxly Cannabis wholly-owned subsidiary, and Li- $7.64) finished 2018 on a solid note cent discount to the 35-multiple EBITDA (earnings before interest, censed Dealer, located in Charlot- and built strong momentum enter- average amongst companies with taxes, depreciation, and amortiza- Group tetown, PEI...The Dosecann asset is ing 2019, say Messrs. Pow and Cor- over $1 billion of market capital- tion) estimate of US$5.1 billion – a pivotal to Auxly’s ability to drive coran, who tout the human re- ization (until the recent stock sell- 30 per cent increase compared to ALTACORP CAPITAL value in the mid-stream vertical, sources company as their “top off, TRST was a part of this group). 2018. They maintain their “outper- Model offers exposure to and add significant margin to their idea” in 2019. “A successful U.S. listing should former” recommendation and 12- supply of raw cannabis by produc- Messrs. Pow and Corcoran reit- benefit TRST on scarcity alone in month target price of US$70. high-margin segments ing branded derivative products. erate that investors should “buy” the near-term, and mid/long-term While the analysts have taken “The site has been retrofitted People. They also stand by their through the development of a down their 2018 fourth quarter es- Digested from a Jan. 7 report with capabilities to manufacture previous target share price of $9.50 much broader and deeper investor timates slightly to account for a by analyst David Kideckel higher-margin products such as for the company. pool. With its large-scale produc- weaker fall application, these are vape cartridges, edibles, capsules The analysts say, “People is now tion platform of current annual- still at the higher end of the 2018 Mr. Kideckel’s first impression and others. The facility is designed in the top 3 in Canada in terms of ized capacity of 50,000 kilograms, guidance. They have increased the of Auxly Cannabis Group Inc. to be Good Manufacturing Prac- benefit books, with annual benefit and fully-funded expansion plan to 2019 EBITDA from US$4.69 billion (XLY-TSX/VEN, $0.87) is positive, tices compliant, and the company premiums of $1.7 billion.” 100,000 kilograms underway, you to US$4.81 billion due to a slightly as he says this vertically-integrated has indicated they expect to re- According to Messrs. Pow and should invest. higher potash and nitrogen price cannabis business (founded in ceive their certification sometime Corcoran, “The growth of People’s “Other reasons to invest are forecast and the fall application de- 2017 under the name Cannabis in 2019. book has benefited from leveraging TRST’s leadership in value-added mand moving to spring of 2019. Wheaton Income Corp.) with as- While the facility is primarily in- their third-party administrator products, with 64 per cent of The increased 2020 EBITDA is sets and operations across each tended to be leveraged internally in (TPA) platforms, which make up 65 cannabis revenue from higher val- based on higher potash volumes, segment of the value chain has ex- order to manufacture higher-mar- per cent to 70 per cent of their busi- ue (that is, non-dried flower) prod- full realization of synergies, and a posure to high-margin segments. gin products for their own product ness, and their value proposition. ucts; and multiple near-term cata- ramp up in U.S. retail acquisitions. His initial recommendation for it is offerings, the site is also equipped They add that People has lysts – such as the potential U.S. ex- Nutrien announced in mid-De- “outperform” with a $1.50-per- to provide extraction and white la- demonstrated solid organic growth change listing, logistical partner- cember its intention to increase its share target price. bel manufacturing services to third while taking over other companies ships, and strong quarterly results. NCIB (normal-course issuer bid) to Mr. Kideckel says that Auxly’s parties, providing an additional at a healthy clip. “Also, on Dec. 28, the company repurchase up to 50.4 million operations are diverse and offer revenue stream for the company.” “Management remains com- disclosed that it has appointed Big shares from 32.2 million that have optionality (that is, it can pick and The analyst continues, “Auxly’s fortable with an annual organic Four auditor KPMG LLP as the new already been purchased. At the choose which industries it needs business model provides the busi- revenue growth rate of five per cent auditor of the company in order to current share price, the analysts to focus on) which he says is im- ness with a de-risked supply to 10 per cent, supported by pre- facilitate the transition to the state that the additional 18.2 mil- portant for a budding cannabis chain, compared to many other mium inflation and the company’s NYSE. We view the transition to a lion shares would cost approxi- company. vertically-integrated producers, sales initiatives, which target to Big 4 auditor positively, as it mately US$820 million. “Although Auxly’s business en- who have operational risk con- gain new clients and increase demonstrates the company’s The analysts think that Nutrien compasses upstream, midstream centrated within a single cultiva- product and service penetration growth and it supports building is in a good position to”deliver on and downstream activities, we be- tion or production site. Auxly’s di- with existing clients. additional credibility with existing growth and increase shareholder lieve their midstream and down- versified supply chain, via their “The company continues to and new investors.” returns” based on several factors. stream activities will be the major streaming agreements and whol- benefit from a strong acquisition CannTrust Holdings is a li- First, fertilizer fundamentals are drivers of value, including brand- ly-owned subsidiaries, sources pipeline, reflecting increased raw product from over a dozen awareness of People’s credibility as partners located across the coun- an acquirer and solid business de- try, and internationally. velopment execution. Keith Richards speaks about “In addition, the streaming “We expect People to continue model allows for scalability and to be active in the consolidation of Technical Analysis and the Current Market Outlook optionality, as the company may the industry which will help drive elect to purchase product for use in revenue and EBITDA (earnings its own production of branded before interest, taxes, deprecia- products, or direct the supply to tion and amortization) growth in Speaking Engagements with Keith Richards, CMT, CIM, FCSI, Portfolio Manager and Technical the distribution channels that al- the future. Analyst: ValueTrend Wealth Management, Worldsource Securities Inc., member Canadian Investor low them to achieve the highest “Management expects another Protection Fund and sponsoring investment dealer of Keith Richards. margins. three years to five years of runway “We view the company’s man- in Canada as the market remains agement favourably, as one of the fragmented with many indepen- more experienced teams in the dent brokers. sector. Led by CEO Chuck Rifici, “Based on fourth-quarter fiscal BNN “MarketCall Tonight” Appearances with Keith Richards co-founder of Tweed Marijuana 2018 results (quarter ended Aug. 31, Phone in with your questions on technical analysis for Keith during the show. Inc, the predecessor of Canopy 2018), People had an unused ac- Growth, and a pioneer of the Cana- quisition credit facility of $63.8 mil- CALL TOLL-FREE: 1-855-326-6266. Or email your questions ahead of time dian cannabis industry...the com- lion to fund future acquisitions that (specify they are for Keith) to: [email protected] pany’s management has global ex- could add $8 million of EBITDA.” perience and proven track records Reflecting on key company of executing in the cannabis, phar- highlights in 2018, Messrs. Pow Next show: maceutical and consumer pack- and Corcoran point to the acquisi- January 24, 2019 @ 6:00pm aged goods industries. tion of Lane Quinn Benefit Consul- February 11, 2019 @ 6:00pm “Auxly’s team has taken steps to tants Ltd. in May, along with a March 19, 2019 @ 12:00pm develop international distribution round of financing and the channels for their products, as well takeover of the Silverberg Group, as off-take agreements, and a pro- formally known as Silverberg & As- duction asset in Uruguay for sociates Inc., in August. Keith Richards, Portfolio Manager, can be contacted at [email protected]. He may hold positions in the securities mentioned. Worldsource Securities Inc. - Member: Canadian Investor Protection Fund, and sponsoring investment dealer of Keith Richards. The opinions cannabidiol-extract products. People acquired 100 per cent of expressed are solely those of Keith Richards and may not necessarily reflect that of Worldsource Securities, its employees or affiliates. The While our model only assumes Lane Quinn shares for $19.5 mil- contents are for information purposes only and do not represent investment advice. marginal revenues from the lion. Based in Calgary, Lane Quinn Uruguayan operation, this leaves serves more than 500 clients in Al- INVESTOR’S DIGEST

Issue 3 / 19 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS February 8, 2019 / 55 berta and British Columbia. “This facility is scheduled to “Overall, these wells came on Several months later, the com- come online in the second quarter production at 345 barrels per day pany bought 100 per cent of Sil- of 2019 and it will have processing of condensate (or 690 barrels of oil verberg’s voting shares and a 75 capacity of up to 420,000 pounds of equivalent per day including other ‘Best Buys’ from per cent economic interest for $29 cannabis, with the ability to pro- natural gas liquids and gas). Con- million. It offers employee group duce up to 20,000 litres of distillate, sidering third-quarter 2018 light benefits consulting to more than 50,000 litres of concentrates, 60,000 oil/condensate production was 800 businesses through offices in pounds of wax, 12 million auto-fill 1,243 barrels per day, we think the leading analysts Calgary, Edmonton, and Leth- packages and 61 million pre-rolls.” initial combined production test bridge, Alta. Flower One Holdings is an expe- (14 days) rate of 1,000 barrels per People raised gross proceeds of rienced greenhouse operator in the day for the 2.9 net wells is rather Analysts follow as many as 20 stocks, most of which are rated $40.4 million through its August fi- state of Nevada. encouraging. Ultimately, we will “buys”. Of those buys, an analyst has one or two special favourites nancing, announced alongside the see how these wells decline over seen as most suitable for new buying. This column is devoted to those Silverberg acquisition. It issued 5.2 the next few months but we think one or two favourite “best buys”. million shares priced at $7.70 each. Petrus investors should be relatively People is a Winnipeg-based pleased with the results.” inancial professional and frequent BNN Bloomberg media company supplying employee Resources Petrus Resources is a Calgary- personality Greg Taylor says he has focused on growth group benefit consulting, third-par- based natural-gas producer with a strategies throughout his career; nevertheless, value is at the ty benefits administration, retire- RAYMOND JAMES production base in the Ferrier area top of his mind at the moment. ment consulting, human resource FINANCIAL focused on Cardium Development. FAsked if he believes volatility since last fall indicates the arrival consulting, and recruitment ser- Cautious and flexible in of a long-term, secular bear market, he responds, “That’s the big de- vices, generally to small and mid- bate among everybody right now.” sized companies. It has built a na- the 2019 energy market SilverCrest In any case, he advises, “Investors need to get used to the volatil- tional presence through a series of ity.” Mr. Taylor argues that recent rockiness could reflect a sea acquisitions. Digested from a Jan. 7 report Metals change in the markets, one that would leave runaway speculative by analyst Jeremy McCrea growth-oriented prospects in the dust. PI FINANCIAL Mr. Taylor is a portfolio manager, chartered investment manag- Flower One Petrus Resources Ltd. (PRQ- Success in expanding er (CIM), and chartered financial analyst (CFA) at Purpose Invest- TSX, $0.61) is riding on the Canadi- ments in Toronto, which he joined in December 2017. He began his MACKIE RESEARCH an mid-cap energy industry theme Area 51 career in 1999 at Aurion Capital, which was acquired by the Bank of Size and place matters of being “cautious and flexible in Nova Scotia in 2014. In 2016, he moved to Front Street Capital as 2019”. Shifting away from the tra- Digested from a Jan. 7 report part of a fund divestment by Scotiabank; Front Street later evolved Digested from a Dec. 18 report ditional approach of announcing by analysts Philip Ker into LOGIQ Asset Management, then Purpose Investments. by analysts Greg McLeish the full-year capital budget, Petrus and Neehal Upadhyaya In the decade since the global economic crisis, central banks and Nicola McFadden instead announced its first-quarter have aimed to create stability through quantitative easing (when 2019 capital budget only, with the SilverCrest Metals Inc.’s (SIL- central banks purchase government bonds or other assets to raise The analysts initiate coverage of intent to determine successive TSX/VEN, $3.87) on-going explo- liquidity), by keeping interest rates very low, and even by giving Flower One Holdings Inc. (FONE- quarterly capital investment as the ration success continues to define “dovish” statements about the possibility and pace of rate hikes in CSE, $1.37; FLOOF-OTC, US$1.03) year unfolds. new high-grade mineralized zones, an effort to keep the capital markets calm. Mr. Taylor argues that, – a vertically-integrated cannabis Mr. McCrea maintains his the analysts say. Meanwhile its def- since economic data has become stronger, central banks have company that is targeting the med- “outperform” recommendation, inition drilling of the Area 51 zone pulled back and offered more hawkish remarks about interest in- ical and recreational cannabis hoping sentiment improves for the continues to expand on known creases to “let the markets walk on their own.” markets in the state of Nevada - is sector, and his $1.25-per-share tar- zones of high-grade mineralization Nevertheless, he concedes, “We’ve had a good rebound in the currently in the process of get price. at the company’s Las Chispas last few weeks,” since U.S. Federal Reserve Chair Jerome Powell’s retrofitting its 455,000 square-foot With Petrus taking a price as- property in Mexico. gentler followup to relatively aggressive interest-related commen- NLV Greenhouse into a cannabis sumption of US$53.03 per barrel of Messrs. Ker and Upadhyaya tary in January. The analyst says investors witnessed “a really nar- cultivation and production facility West Texas Intermediate crude oil, maintain their “buy” recommen- row market in the last year dominated by the FAANG names.” How- (producing more than 63,500 kilo- $1.31 per gigajoules of Alberta En- dation, “speculative” risk rating, ever, he adds, “We’ve seen a bit of a crack in that trade,” such as grams of cannabis per year). ergy Company crude, and a and $5.65-per share target price. when Apple Inc. shares plummeted after giving bad guidance. When it is completed in the first US$7.55 per barrel Canadian differ- They say, “As further success is In the last few months, technology has retreated from the front quarter of 2019, it will be the largest ential, Petrus expects to generate demonstrated with infill drilling, we of the stock market pack. “We’ve had a bit of a rotation toward val- cannabis production facility in funds flow in the range of $10 mil- anticipate SilverCrest to increase ue. Value-oriented stocks had been doing badly for the last few Nevada. Flower One is currently lion to $11 million in the first quar- resource confidence from inferred years.” As growth-focused businesses struggle, investors are be- using leading technology and ter of 2019. According to Mr. Mc- to indicated, and with further high- coming more willing to pick up undervalued companies again. knowledge of high-density agricul- Crea, this should allow for two net grade hits, we expect the overall Cyclical sectors of the market, such as the financial, materials, ture to accelerate its scale-up of wells against capital spending of grade to increase and add tonnes and energy segments, boast solid potential. cannabis cultivation to a commer- between $8 million and $10 million. via additional intercepts which Poor U.S. dollar performance could speed up sector rotation to- cial, high-volume capacity. Additionally, continuing on its continue to exceed average widths ward commodities, the analyst adds. “The U.S. dollar has become Mr. McLeish and Ms. McFad- 2018 push to lower debt, the com- modelled in the existing resource.” kind of a crowded trade.” den also note that Nevada contin- pany plans to reduce its debt in the SilverCrest has been completing Mr. Taylor also notes, “Canadian small caps have been ignored ues to experience strong market range of about $1-to-$2 million in its Phase 3 infill drill program cur- and left for dead and that’s created a lot of volatility in that sector growth post legalization; and Flow- the quarter. rently with nine rigs in order to in- and also setting up some opportunities….but it might be a little ear- er One is positioned for strong “Considering the volatility in crease the overall resource confi- ly to tell on some of those.” growth in higher-margin cannabis both oil and gas markets, we be- dence on 25-metre spacing. Ap- Mr. Taylor recommends his first “best buy”, the Purpose Pre- products. The analysts give a “buy” lieve the bigger takeaway with the proximately 5,000-to-10,000 metres mium Yield Fund (PYF-TSX, $18.76), because of the safety and sta- recommendation with a $4.50-per- press release was the recent Ferri- of new drilling is planned to be in- bility of its underlying assets. share target price. er Cardium well results (with aver- cluded in an updated resource ex- “It’s a good diversifier…that has a little more safety built into it.” They comment, “Since original- age condensate rates at 345 barrels pected in the first quarter of 2019. The analyst explains that the fund includes a combination of ly legalized for recreational use in per day). With high condensate The analysts elaborate, “The stocks with covered calls and cash-covered put options to protect July 2017, the market for cannabis rates, overall production mix tighter drill spacing is aiding in against volatility. Made up of options tied to larger-cap U.S. com- in Nevada has been booming. Rev- should continue to increase, identifying mineralized shoots panies, the fund tends to perform well when the market is restless. enue for the first fiscal year totalled weighted likely at about 37 per cent such as Shoot 51 and Shoot 43 It also offers a yield of 5.3 per cent annually. US$529.9 million, including in 2019 (versus about 33 per cent in which have returned multi-kilo- Mr. Taylor’s second “best buy”, the Purpose Marijuana Oppor- US$424.9 million for recreational 2018 and about 28 per cent in gram silver-equivalent average in- tunities Fund (MJJ-NEO, $27.04) is based on “the one” growth area alone, and state officials continue 2017),” Mr. McCrea says. tercepts in recent assay results. in Canadian markets recently, cannabis. to predict future growth (with an- “Overall, with Petrus keeping its The on-going success continues to “There’s a lot of excitement about it…but people are going about nual tourism traffic totalling more 2019 capital-expenditure spending support a greater average vein it the wrong way,” says the analyst, who points out that MJJ is the than 55 million people per year). within expected funds flow - that is width compared to the current re- first actively-managed cannabis fund in the world. “We believe that market dy- expected to keep production flat source estimate. Many have purchased Horizons ETFs’ passive marijuana index namics will remain strong through year-over-year – we believe the “Of the 28 holes completed at fund (trading under HMMJ on the TSX) or bought individual stocks, our forecast period and we esti- company is remaining prudent in the zone, average estimated true says Mr. Taylor. That leaves investors either over- or underexposed mate that the value of the Nevada light of the current volatility. With widths and grades are now 3.9 me- to the major marijuana names. cannabis market in 2020 to be ap- high economic well results and tres of 11.36 grams of gold per MJJ, on the other hand, is made up of about 30 per cent U.S. proximately US$750 million. If the plenty of inventory, we do believe tonne of ore and 1,064 grams of sil- cannabis companies and 60 per cent Canadian peers, plus around Nevada market follows some of the there remains upside when overall ver per tonne of ore, compared to 10 per cent in cash at present. However, that allocation can shift trends seen in the U.S. states where sentiment improves for the sector.” the current resource model of 2.7 completely as necessary; the fund takes profits and holds onto the recreational cannabis is legal, Speaking on the operations up- metres wide of 7.13 grams of gold extra cash from gains so it can purchase more pot company shares products derived from cannabis date, as announced during the per tonne of ore and 614 grams of when they retreat anew. “The sector does have the periods where it oils should become a large and third-quarter 2018 release, the an- silver per tonne of ore. goes parabolic,” says Mr. Taylor. Since it started trading on Feb. 1, growing segment of the market. alyst highlights five (2.9 net) Cardi- “Highlight intercepts from to- 2018, the fund has been about 40 per cent ahead of HMMJ. “Flower One is currently in the um wells drilled in the second half day’s batch of assay results at Area The fund includes such dominant marijuana names as Canopy process for building out a cannabis of 2018, completed with 76 stages 51 include: 9.3 metres of 39.66 Growth Corp. and Tilray Inc., but the rest of the underlying compa- oil processing facility that will po- per mile (average) of a frac design – grams gold per tonne of ore and nies have smaller capitalizations, such as HEXO Cannabis Corp. and sition the company for growth in which the analyst says is a mean- 3,361 grams of silver per tonne of OrganiGram Holdings Inc. and thus more room to grow. (higher-margin) cannabis oils and ingful step up from prior well com- derivative products. pletion designs. Continued on next page 56 / February 8, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 3 / 19

Continued from preceding page (ACMPR), and its standard pro- pany entered into a binding com- cessing and standard cultivation li- mitment to execute a reverse ore; 2.4 metres of 4.3 grams of gold cences under the Cannabis Act takeover of a shell company, and of- per tonne of ore and 1,572 grams of (November 2018), allowing it to be- ficially began trading as Valens Briefly Noted silver per tonne of ore; and three gin sales to other cannabis compa- GroWorks on the Canadian Securi- metres of 5.37 grams of gold per nies licensed under the Cannabis ties Exchange in November 2016. tonne of ore and 998 grams of silver Act, and execute on its contract ex- PI FINANCIAL per tonne of ore.” traction business. SilverCrest Metals is a precious- Mr. Kideckel stresses, “It is one Thera- metals exploration company that is of the only companies to hold both GT Gold Corp. (GTT-TSX/VEN, $0.74)unveiled drill results for the focused on new discoveries, value- licences, which is a nod to man- technologies final, “outstanding” and deepest hole at Saddle North (TTD109) in added acquisitions and targeting agement’s ability to identify a key northern B.C. Analysts Chris Thompson and Justin Stevens’ say the production in Mexico’s historic pre- differentiation strategy amongst MACKIE RESEARCH numbers support their view of Saddle North’s tonnage and grade. cious metal districts. peers in the cannabis sector.” Hold tight They maintain a “buy” stance on GT and target share price of $3.70. The analyst points out that the Hole 109 demonstrates the existence of “high-grade mineraliza- company has formed key relation- Digested from a Jan. 9 report tion extents at depths” (including 0.5 per cent copper for 538 metres Valens ships with two industry-leading by analysts André Uddin and 1.04 grams of gold per tonne of ore from 624 metres). These re- businesses in Thermo Fisher Sci- and Yue Toby Ma sults are similar to the nearby Red Chris deposit’s reserve grades – GroWorks entific Inc., a laboratory equipment 0.36 per cent copper and 0.27 grams of gold per tonne of ore. The an- and medical instrument manufac- Messrs. Uddin and Ma are alysts state the results back their modelled tonnage estimate. ALTACORP CAPITAL turer, and Tarukino Inc., a U.S.- downgrading their recommenda- While mineralization was seen over an expanded length of 600 Flying under the radar, based private cannabis beverage tion for Theratechnologies Inc. metres and to a depth of more than 1,100 metres, the results are still manufacturer and leader in emul- (TH-TSX, $9.18) as they lower sales comparable with the modelled resource of about 200,000 metric until now… sification technology. estimates for medications Egrifta tonnes. Additional results from 22 holes at Saddle South (epithermal Valens has been named a “cen- and Trogarzo. The analysts give the vein target) are expected by the end of January 2019. Digested from a Jan. 7 report tre of excellence in plant-based sci- stock a “hold” recommendation by analyst David Kideckel ence” by Thermo Fisher, and has and make a substantial decrease to obtained the exclusive Canadian their target share price down to ACUMEN CAPITAL Valens GroWorks Corp. (VGW- rights to use Tarukino’s Sorse $10.20 from a previous $19.50. CSE, $1.76) is one of the premier emulsification technology and As to why the analysts remain cannabis companies when it beverage brands, he adds. less than optimistic about the Questor Technology Inc. (QST-TSX/VEN, $3.92) has earned a comes to extracting active medical “Given the relatively high mar- stock’s future, the analysts note, “, $5.8-million purchase order to supply incinerator units along with ingredients from marijuana, then gins on extraction services, larger Egrifta’s total Rx volume in the U.S. accompanying power generators that use waste heat as fuel at three manufacturing products from the cannabis producers are incen- has flatlined. The F4 formulation oil facilities in Mexico (from a single client). same, asserts Mr. Kideckel. tivized to internalize these pro- (more concentrated, less adminis- The generators will power the facilities, which are off the grid, At the same time, he says, “We cesses,” suggests Mr. Kideckel. tration volume) of Egrifta was ap- while users of the technology in Mexico receive “Green” (environ- also view Valens as amongst the “With our view of Valens as an proved by the FDA in November mentally-friendly) certificates. The sale comes on the back of updat- most undervalued businesses in industry leader, we see them as an 2018 – we expect Theratechnolo- ed initiatives in Mexico, including a 75 per cent reduction target for the cannabis sector, offering in- attractive takeover target by larger gies to switch patients to the F4 for- methane emissions by 2025. This is Questor’s first commercial sale vestors extremely favourable gross cannabis companies looking to ac- mulation which should be more of waste heat-to-power units, a division management says has sig- margins and EBITDA (earnings be- quire industry-leading extraction user friendly. nificant upside in areas of the world that are off the grid or face pow- fore interest, taxes, depreciation and laboratory testing capabilities.” “Massachusetts General Hospi- er shortages, analyst Trevor Reynolds notes. and amortization) margins, as well As to the prospect of the com- tal is conducting a NAFLD-NASH “The sale results in upward revisions to our estimates while the as a capital-light model that, based pany’s early-mover advantage fad- trial with Egrifta, with results ex- business potential in Mexico is significant given new (Green) regula- on our estimates, will generate sig- ing in the future, the analyst says, pected in the first half of 2019 – tions,” he agrees. He increases his target price to $5.35 per share from nificant free cash flows on an an- “We expect that over time, new en- positive outcomes of this study $4.75, and keeps his “buy” recommendation for Questor. nual basis beginning in fiscal 2020 trants will move into the (extrac- should drive the off-label use of (year beginning Dec. 1, 2019).” tion) segment and potentially Egrifta to treat NASH. To be con- This perfect storm is enough to drive margins lower. To guard servative, we are lowering our PI FINANCIAL push Mr. Kideckel to start cover- against this, Valens has developed Egrifta sales estimates from fiscal ing ValensGroWorks on behalf of built-in optionality through a di- 2019 to 2023 AltaCorp. The analyst assigns versified strategy that allows them “Trogarzo (Theratechnologies’ Canopy Rivers Inc. (RIV-TSX/VEN, $4.49) has made a $9-million Valens GroWorks an initial recom- to shift into further downstream key growth driver) was launched in investment in a plant-based food and beverage company, Green- mendation of “outperform” and a activities, specifically, the develop- the U.S. in May 2018. The uptake of house Juice Co. The investment goes towards Greenhouse’s expan- 12-to-18-month target price of $5 ment and marketing of their own Trogarzo has been increasing – sion and development of health and wellness beverages infused with per share. branded products.” however, the rate is slower than cannabidiol (CBD). Analysts Devin Schilling and Jason Zandberg say The analyst comments: Valens GroWorks was incorpo- our original expectations - likely this is positive since CBD-infused products are a large opportunity “Valens is a best-in-class ex- rated in 2014, and began operations due to lack of sufficient reimburse- in the Natural Health and Wellness market. The analysts maintain traction and manufacturing com- the same year, as a dealer’s licence ment that is expected to take full their “buy” recommendation and target price of $9 per share. pany focused on advanced R&D applicant under the Narcotic Con- effect in 2019. Canopy’s financing package consists of secured and unsecured and analytical testing, proprietary trol Regulations. In 2016, the com- “Theratechnologies incurred debt, warrant coverage, and board representation rights. It includes extraction processes, product de- a $6-million senior (that is, to be repaid first) secured convertible velopment and cultivation activi- debenture with a 12 per cent yield for a three-year term and fixed ties within the cannabis sector. conversion price, and a $3-million unsecured convertible debenture “We believe that the company is with an automatic conversion mechanism based on Greenhouse’s ideally positioned to benefit from sales milestones. Canopy Rivers will also receive incremental war- the expected evolution of cannabis rants allowing an increase in its Greenhouse stake. consumer consumption patterns, Greenhouse, founded in January 2014, has grown from one retail namely, the shift from dried flower outlet to 15 corporate-owned stores in the Greater Toronto Area. Its towards consumer packaged goods distribution network also reaches hundreds of other locations. (CPG) extract products, such as vape pens, edibles, and beverages.” Elaborating on Valens’ valua- RAYMOND JAMES FINANCIAL tion relative to its earning ability, he says, “We forecast that Valens will generate one of the most at- Equinox Gold Corp.’s (EQX-TSX/VEN, $1.04) guidance for 2019 tractive EBITDA margin profiles we calls for the commissioning of its Aurizona gold mine in Brazil and have seen in the sector, with mar- more production from Mesquite in California than analysts Tara gins of 47 per cent in fiscal 2019, 58 Hassan and Jeremy Poon forecast. While the guidance fell short of per cent in fiscal 2020, and 52 per Ms. Hassan and Mr. Poon’s expectations overall, they maintain their cent by fiscal 2021. position that the company is stepping into “a potentially catalyst- “In addition, the company’s heavy period” and reiterate an “outperform” recommendation for it business model requires relatively with a 12-month target share price of $2. low capital investment in compar- The Aurizona gold mine is set to start commercial production at ison those of most vertically inte- the end of 2019’s first quarter. Equinox expects the mine to produce grated cannabis producers, allow- 85,000 to 105,000 ounces annually. Mesquite’s production guidance ing them to generate meaningful includes a year-over-year increase target of four per cent to 14 per free cash flows by fiscal 2020. cent, with a focus on exploring opportunities to increase production, Valens has received its dealer’s decrease operating costs, and extend mine life. Castle Mountain’s licence (May 2017) under the Con- construction starts in the second half of 2019. trolled Drugs and Substances Act, Ending 2018 with a strong cash balance, the analysts say they ex- its licensed producer (LP) status for pect Equinox Gold will revise that balance in the first quarter of 2019 cultivation and oil production (Oc- to reflect adjustments related to the Mesquite acquisition. tober 2018) from Health Canada under the Access to Cannabis for Medical Purposes Regulations INVESTOR’S DIGEST

Issue 3 / 19 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS February 8, 2019 / 57 net losses in fiscal 2017 – and likely increased cash flow from an ap- ations; cost overruns; weather and in fiscal 2018 as well – as the com- proximate 75 per cent increase in seasonal factors; fluctuations in pany ramped up its preparation ef- production, which should become royalty or tax rates; and overall well forts for the Trogarzo launch. We more tangible with the release of performance. believe the launches of Trogarzo in first-quarter 2019 results. The cur- Altura Energy is a small-cap oil- Briefly Noted the U.S. and Europe should start rent valuation is lower than justi- and-gas company primarily fo- bringing profits back to Theratech- fied given the production, cash- cused on exploration and develop- nology in 2019. Our adjusted EBIT- flow growth and declining costs ment of Upper Mannville forma- CIBC WORLD MARKETS DA and fully diluted EPS forecasts offset by increased security and po- tions in east and central Alberta. for Theratechnology in fourth litical risk in Burkina Faso.” quarter of fiscal 2018 and the fol- SEMAFO has two gold mines in EXFO Inc.’s (EXF-TSX, $4.08; EXFO-NASDAQ, US$3.10) results lowing years have been significant- Burkina Faso – the Mana and AGT Food and outlook were largely in line with analysts Todd Coupland and ly lowered.” Boungou operations plus explo- Amy Dyck’s forecasts. Bookings of US$81.2 million, the second-high- Theratechnologies is an emerg- ration assets in Burkina Faso and and Ingredients est in the company’s history, are particularly encouraging, they add. ing specialty pharma company spe- Ivory Coast. However, the analysts say they continue to expect exposure to the 5G cialized in the HIV field. Theratech- CIBC WORLD MARKETS wireless upgrade cycle will not take place until late 2019 at the earli- nologies launched its multi-drug Depressed lentil pricing est (EXFO’s shipments for these upgrades should begin then). resistant HIV drug Trogarzo in the Altura Energy For that reason, they do not advise buying the stock for now, U.S. in late April 2018. The compa- makes for gloomy outlook keeping their “neutral” recommendation and US$3.50-per-share tar- ny also sells Egrifta, the only ap- BEACON SECURITIES get price. First-quarter (period ended November 2018) fiscal 2019 proved drug for HIV-related Management expects 2018 Digested from a Jan. 8 report sales were about US$69 million, versus the CIBC expectation of lipodystrophy, in the U.S. by analysts Jacob Bout, US$70 million and consensus of US$68.5 million. Revenue growth production decline Rahul Malhotra and Ioan Ilea was flat quarter-over-quarter, but up 9.2 per cent year-over-year. According to the analysts, EXFO’s strong bookings were due to SEMAFO Digested from a Dec. 24 report According to Messrs. Bout, Mal- calendar year-end spending from U.S. communications service by analyst Kirk Wilson hotra and Ilea, the focus for AGT providers, with robust demand for 100G test solutions for ongoing fi- HAYWOOD SECURITIES Food and Ingredients Inc. (AGT- bre deployment, high-speed upgrades, and data-centre growth. A golden stock pick Altura Energy Inc. (ATU- TSX, $17.28) in 2019 will remain on TSX/VEN, $0.37) provides a fourth- the proposal from AGT’s insiders to Digested from a Dec. 12 report quarter 2018 production guidance, privatize AGT for consideration of PI FINANCIAL by analyst Kerry Smith with the company expecting De- $18 in cash for each common cember production to be only 600 share. The analysts also believe SEMAFO Inc. (SMF-TSX, $2.52) barrels of oil equivalent (BOE) per that fundamentally the depressed Endeavour Silver Corp. (EDR-TSX, $3.01; EXK-NYSE, US$2.27) re- boosts its Boungou full-year pro- day due to the shut-in of volumes lentil markets will likely continue ported actual fourth-quarter 2018 production that was seven per cent duction targets for 2019, which will in response to weak Western Cana- to weigh on profitability over the below the company’s guidance, analysts Chris Thompson and Justin inevitably drive cash-flow growth. dian Select (WCS) crude oil prices. course of 2019. Stevens point out. The analysts blame the shortfall on delayed com- Also, SMF is one of Mr. Smith’s Mr. Wilson drops his target price Going into further detail the an- mercial production at El Compas; lower-than-expected gold grades “top picks” given its strong balance by a nickel to $0.80 a share but alysts say, “A special meeting of at Bolañitos; and lower mine production at Guanacevi (all three sites sheet, production growth and in- keeps his “buy” recommendation. AGT’s shareholders is to be held are in Mexico). expensive valuation, adding that Altura’s 2018 fourth-quarter early this year to vote on the pro- Endeavour delivered 1.418 million ounces of silver and 14,900 SEMAFO provides investors with (between October and December) posed transaction. ounces of gold in the quarter, slightly less than PI Financial’s estimate exposure to unhedged gold pro- guidance of 1,400 BOE per day is “The prospective buyer group, of 1.572 million ounces of silver and 15,000 ounces of gold. At El duction (three mines in six years) lower than the analyst’s expecta- which includes the Arslan family, Compas, a ball-mill-pinion failure in late December stopped all plant from West Africa. tion of 1,840 BOE per day. Howev- CEO, and Point North, represent operations. Production at Guanacevi and Bolañitos showed lower- The analyst estimates produc- er, he notes the WCS price has re- approximately 27 per cent of AGT’s than-anticipated throughput and grades, though management ex- tion will grow from 255,000 ounces covered as of late, and Altura’s current shares outstanding. But we pects grades to improve with steady production through 2019. of gold this year to 415,000 ounces management expects to be pro- note that the top three non-insid- Management has not revealed fourth-quarter costs as of yet. next year with all-in-sustaining ducing at full capacity in January. ers currently have a 30 per cent in- However, the company intends to release financial results for the pe- costs dropping 25 per cent from For context, the analyst also notes terest. This is important as the riod by Feb. 25. The analysts keep their “buy” recommendation and US$985 per ounce to US$740 per production reached an average of transaction requires that two- $3.75-per-share target price unchanged. ounce. He reiterates his “buy” rec- 2,053 BOE per day in October. thirds of the vote cast by all com- ommendation and $6-per-share “Our current 2019 forecast does mon shareholders at the meeting, target price. not include any wells to be drilled as well as a simple majority of AGT BEACON SECURITIES SEMAFO recently released a until spring break-up ends in June. public shareholders, agree to the maiden reserve estimate for the An active summer program should transaction.” Siou Underground Zone as well as drive significant growth in the sec- Other concerns regarding the On Dec. 30, 2018, iAnthus Capital Holdings Inc. (IAN-CSE, $5.96) the results of a pre-feasibility ond half of 2019. company include, “A weak Indian opened the first marijuana dispensary in Brooklyn. Analysts Russell study at Mana that incorporates “While we foresee a stronger oil rabi crop may be the necessary cat- Stanley and Susan Xu make no material changes to their $16 share the Burkina Faso zone into the market next year relative to cur- alyst to see India return to pulse price target and “buy” recommendation, saying they had already in- mine plan. rent due to influence from OPEC markets, but it remains unclear at cluded New York operations in their valuation. The new mine plan provides (Organization of the Petroleum Ex- this point whether such an event Operating under the Citiva brand, the dispensary is located across visibility on the production profile porting Companies) and the Al- will transpire. from the Barclays Center and Atlantic Terminal. Being the first to at Mana with a current eight-year berta government, we believe it is “Given high leverage, large debt open in Brooklyn positions iAnthus well in a 2.6-million-strong mar- reserve life and improves on Hay- possible that the company under- refinancing in 2020, and a delayed ket (the New York City area has a total population of about 20 mil- wood’s previously modelled pro- takes a more conservative budget lentil market recovery, we believe lion). The company plans to open its second New York dispensary in duction profile, with an average of than we forecast as balance-sheet our price target of $18, decreased Wappingers Falls in late January, with locations in Staten Island and 413,000 ounces from both Mana strength is a key focus for Altura,” from $19, is closer to fair value. We Chemung County planned for later in 2019. The company will also and Boungou over the 2019-to- Mr. Wilson says. remain ‘neutral’ rated. launch a delivery service covering Brooklyn, expanding its market. 2023 timeframe. Alberta Premier Rachel Notley “So far, Indian lentil rabi plant- New York is currently a medical-only market, but Gov. Andrew With the analyst expecting cash announced that her administra- ing is three per cent behind year- Cuomo’s administration has placed an emphasis on legalizing recre- flow to total US$215 million in tion would slash oil production over-year, but still eight per cent ational marijuana. Ten companies are licensed to operate in the 2019, he says SEMAFO is well posi- temporarily by 8.7 per cent starting above the five-year average. But state, iAnthus among them, with each allowed four dispensaries. tioned to further strengthen its bal- in January, amounting to about precipitation has been dismal, ance sheet. At spot gold price of 325,000 barrels per day. With the which could impact yields. In the US$1,255 per ounce, he claims SE- lower level of Altura’s production scenario that India does return to CIBC WORLD MARKETS MAFO will generate US$195 mil- in the fourth quarter, it inherently the market at some point in 2019, lion of cash flow in 2019. brings a lower level of cash flow there would be intense competi- He comments further, “As of and a higher level of year-end net tion from other former suppliers Constellation Software Inc. (CSU-TSX, $877) has expanded its Sept. 30, 2018, SEMAFO’s cash bal- debt for the small-cap company such as Australia and the U.S. that credit facility to US$700 million from US$460 million. Analysts ance stood at US$101 million, and (which the analyst describes as be- have also accumulated relatively Stephanie Price and Varun Choyah say this signals an improving its debt balance stood at US$120 ing “well-capitalized”). large carryovers, and hence pricing mergers-and-acquisitions (M&A) environment. They retain their million, with quarterly repayments Based on an interim review of improvement may be limited. “outperformer” recommendation and $1,350-per-share price target. of US$15 million starting March 31, Altura’s reserves after the addition- “Our fourth-quarter 2018 esti- They say, “Constellation is one of the few companies under our 2019. SEMAFO currently trades at a al seven wells that were brought on mate of $20 million is unchanged coverage that increased its M&A spend year-over-year in 2018, with consensus estimate 2019 share production from the summer but we are taking down our 2019 a new ‘keep your capital’ focus giving operating groups more M&A price-to-cash flow per share multi- drilling program, the credit facility EBITDA estimate to $80 million autonomy. Given market volatility, we expect the M&A environment ple of 2.5. was increased from $3 million to $6 from $89 million to reflect the de- to continue to improve and see Constellation as well-positioned. The peer group currently trades million, which should allow the layed recovery in lentil markets. “Constellation has noted a difficult M&A environment for the past at a multiple of 4.9. Boungou will company to complete its 2019 pro- With this report, we are rolling several years – with valuations stretched given the low interest rate deliver its first full quarter of pro- gram, the analyst states. He expects out our 2020 EBITDA estimate of environment and prevalence of competing private equity acquirers.” duction in the fourth quarter, and the company’s 2019 guidance $91 million. Ms. Price and Mr. Choyah reported that, as of Dec. 20, Constella- a full production year in 2019 should be released fairly soon. “We assume that the pulse tion’s acquisition spending was up significantly year-to-date, at should close this valuation gap. Risks that could negatively af- oversupply situation modestly im- US$459 million versus US$178 million in the year-ago period. Con- “We recommend investors ac- fect Altura in 2019 include com- prove but still below what we saw stellation has significantly staffed up its M&A team, they also noted. cumulate shares now ahead of modity-price fluctuations; foreign- 2019 guidance in February and the exchange and interest-rate fluctu- Continued on next page INVESTOR’S DIGEST

58 / February 8, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 3 / 19

Continued from preceding page lotteries that sell instant tickets. es – we do not expect Correvio to to push ahead with its program.” are reducing our 2019 rig count to With the acquisition of Schafer, have positive cash flow in 2019 ei- The analyst stress that the re- 160. The entirety of the change is in 2015 and 2016. Our 2020 esti- Pollard receives many existing ther. Thus, we believe it should be lease was positive as the initial pro- the consequence of curtailments mates also assume modest volume long-term relationships and a logic to assume Correvio would duction rates and oil cuts and all (producers don’t need to drill new and margin expansion within the complementary product to its in- conduct a $30 million equity fi- lined up with expectations – and wells if they are curtailing the pro- other segments.” stant ticket division. nancing in the second half of 2019 expenses were actually south of ex- duction). The magnitude of this AGT is a global leader in pulse “Pollard offers a compelling val- at a price of US$2. We have also as- pectations. impact has proven difficult to processing and distribution, with uation and attractive return to our sumed the company would raise According to the analysts, the gauge ahead of time but because over 40 facilities in Canada, U.S., target price. The shares have trad- $15 million and $10 million in 2021 company, at its investor day in the curtailments are temporary, Turkey, Australia, Europe, India, ed off almost 26.5 per cent since and 2022, respectively, via equity November, detailed a capital bud- implications for going concern val- South Africa and China. The compa- reaching a high of $27.93 achieved offerings.” get for 2019 of approximately $120 ue should be near-zero. ny operates through three segments: in early November 2018 following Correvio Pharma (formerly Car- million. It also announced the op- “We are reducing our 2019 Pulses & Grains Processing, Bulk a strong third quarter 2018 report. diome Pharma) is a commercial- tion of boosting its spending for the EBITDA estimate to $14 million Handling and Distribution, and Pollard is currently trading at 9.5 stage specialty pharmaceutical second half of 2019 by $40 million from our prior $32 million forecast. Food Ingredients & Packaged Foods. times 2019 EBITDA.” company specialized in cardiology if prices improve. This implies a 35 per cent sequen- Pollard Banknote provides with a key marketing focus on the “At strip, we believe that Obsid- tial drop from our 2018 estimated products and services to lottery and EU markets. ian will be competitive in 2019,” EBITDA, a 24 per cent drop from Pollard charitable gaming industries say the analysts.”Based on the $120 2017, and is almost 50 per cent be- around the world. Pollard Ban- million assumption, we forecast low the current consensus. Banknote knote maintains a dominant mar- Obsidian Energy Obsidian to grow CFPS by 52 per “Also, Essential set its 2019 cap- ket position for instant-win scratch cent, ranking it fourth behind se- ital budget at $6 million - down ACUMEN CAPITAL tickets in Canada, and is the second ALTACORP CAPITAL lect higher cost heavy oil produc- from an expected $16 million in Positive 2019 outlook largest producer of instant tickets in Cardium drilling program ers. In addition, we are of the view spending in 2018. The reduction is the world. that Obsidian’s 2019 budget re- hardly surprising given most of its Digested from a Jan. 10 report ahead of schedule mains conservative with a payout explorer-and-producer customers by analysts Brian Pow ratio of approximately 77 per cent have yet to outline their own and Nick Corcoran Correvio Digested from a Dec. 17 report and show risks to other operators spending plans for 2019 - which is by analysts Thomas Matthews given current budget estimates.” a good indicator their spending will Pollard Banknote Ltd. (PBL- Pharma and Nick Koch Obsidian Energy is a mid-sized be down as well.” TSX, $21.91) returns as Messrs. Pow oil and natural gas production Essential Energy Services pro- and Corcoran’s top pick list in 2019. MACKIE RESEARCH Obsidian Energy Ltd. (OBE- company based in Calgary. vides well production and comple- With North American instant ticket Getting cold TSX, $0.60) is ahead of schedule on tion services via coil tubing, fluid retail sales growing at a compound its Cardium drilling program, say pumpers and nitrogen units. The annual growth rate of six per cent Digested from a Jan. 9 report Messrs. Matthews and Koch. Essential company also provides downhole from 1995 to 2016, Pollard will con- by analysts André Uddin The analysts, who stick with tool services and rentals. tinue to benefit from industry mo- and Yue Toby Ma their “outperform” recommenda- Energy Services mentum. The analysts maintain tion but reduce their 12-month tar- their “buy” rating and give the stock As they do not expect Correvio get share price to $1.50 from $2.15, RAYMOND JAMES Barkerville a $27.50 target share price. Pharma Corp. (CORV-TSX, $3; note that the company recently an- FINANCIAL Providing further details the an- CORV-NASDAQ, US$2.25) to turn nounced a second half of 2018 sta- Lower budget and Gold Mines alysts say, “Pollard completed two profitable in the near future, tus report on its drilling program acquisitions in 2018 that help sup- Messrs. Uddin and Ma downgrade for the asset. estimates; still undervalued PI FINANCIAL port growth in 2019 and beyond. their stock rating. The analysts give “Overall, production continues Distinguished gold deposit Demand for instant tickets has his- Correvio a “hold” recommenda- to meet type-curve expectation Digested from a Jan. 9 report torically not been impacted by tion and a US$2.70 target share with average individual well rates by analysts Andrew Bradford at Cariboo slower economic periods. Instant price, down from US$4.70. on two pads producing 419 to 587 and Michael Shaw tickets drive north of 80 per cent of Other reasons giving the ana- barrels of oil equivalent (BOE) per Digested from a Jan. 8 report Pollard’s revenue. lysts cause to turn from the stock day (69 per cent– 83 per cent oil), According to analysts Messrs. by analyst Philip Ker “Pollard earns a significant include them expecting, “Correvio with another five wells expected to Bradford and Shaw, it doesn’t take portion of its revenue from its to conduct up to a US$30 million be on production by mid to late fancy arithmetic to conclude Es- Calling Barkerville Gold Mines U.S. operations with Pollard’s equity financing in 2019 that would December,” say the analysts. sential Energy Services Ltd.’s Ltd.’s (BGM-TSX/VEN, $0.41) Cari- share of the U.S. instant ticket cause equity dilution. We are also “The expectation for 10 wells on (ESN-TSX, $0.33) stock is wildly un- boo Gold project one of the only market approaching approxi- lowering our sales outlook for the production by year end is higher dervalued at $0.325. However, “3-million-ounce gold (or more) mately 22 per cent. company. than initially forecast as the initial lower energy prices will result in deposits capable of producing over “On Oct. 31, 2018, Pollard ac- “On Correvio’s balance sheet, expectation was early 2019. sharp reductions in rig counts, 250,000 ounces per year, while hav- quired Schafer Systems Inc. for the company had $16.8 million in “Although this will not have along with lower revenue and ing the potential to attract the ap- US$23.5 million (approximately cash and $40.7 million in debt by much bearing on 2018 production earnings forecasts. The analysts petite of a mid-to-large cap gold $30.6 million) which will contribute the third quarter of 2018 end – debt volumes, we believe it is positive as keep their “outperform” recom- producer”, Mr. Ker initiates cover- two months to the 2018 results. principal repayments would begin it indicates Obisidan can met and mendation and reduce his target age of BGM with a “buy” recom- “Pollard has contracts as a pri- in June 2020 and Correvio would exceed guidance targets, and com- price to $0.65 from $1.05 per share. mendation and $1.30-per-share mary or secondary supplier of in- have to pay off its debt in 2022. The pletion costs are less than initially Speaking on its stock being un- target price. stant tickets for 27 of the 44 U.S. company has been incurring loss- anticipated allowing the company dervalued, Messrs. Bradford and “Barkerville is at the top of a Shaw reveal Essential has $0.45 per short list of multimillion-ounce share of working capital, which af- gold development plays in Canada. ter deducting $0.17 in total debt With an updated resource estimate per share, still leaves shareholders and feasibility study expected for Do you have “Never Spend Money”? with $0.28 of net working capital delivery in 2019, in addition to per share. The remaining $0.04 per more expansion and definition A 65-year-old couple had all the money they will ever need, and a share difference between the share drilling, Barkerville should be on lot more they will never spend. As custodians of “never spend money”, price and net working capital is all the radar of investors as its Cariboo they asked us to help preserve family wealth for future generations. that remains for Essential’s prop- Gold project advances towards With guaranteed returns, zero market risk and no interest rate risk. erty, plant and equipment (valued construction. With a limited pool at $6 million). of attractive, multi-million ounce Mission accomplished Commenting further, they say, development projects in Canada, We arranged a secure compounded “Regardless of the carrying value or Barkerville is positioning them- after-tax return of 6.5%, the equivalent of 13% before tax. what ESN paid, even the stingiest selves to become an attractive of investors would have to concede takeover candidate. assets that generated $7 million of “The Cariboo district has an ex- Our team of expert advisors across Canada can help you too. earnings before interest, tax, de- tensive mining history dating back Contact us today for your free and no-obligation consultation. preciation and amortization (EBIT- to the mid-1800’s. Barkerville has It will be a great investment of your time. DA) in third-quarter 2018 alone are already completed test-mining op- probably worth more than $6 mil- erations at a small scale rate of Mark Halpern, CFP, TEP lion, irrespective of their outlook. about 30,000 ounces a year from Certified Financial Planner, Trust & Estate Practitioner “Tactically, consensus estimates Bonanza Ledge, with the goal of will come down, but we doubt this bringing Cow and Island Mountain Call us at 416-364-2929 or toll free 1-866-566-2001 will have much impact on the stock online by 2021 (BGM recently com- Email: [email protected] as it’s already down 35 per cent pleted a $29.5-million equity fi- over the last 90 days (Toronto Stock nancing to further drill there). Exchange index is down 11 per “Barkerville currently has a per- cent). We appreciate not all in- mitted and operating mill which vestors can avail themselves of a they plan to use for initial process- $46-million market-cap company, ing of Cariboo ore. but for those who can, we recom- “The project scope calls for a Read Mark’s articles in The TaxLetter® mend buying these shares.” new mill to be built at site but Get your free Estate Planning Toolkit at wealthinsurance.com/toolkits.html Speaking on the production could alternatively expand the QR and budget forecast, they say, “We project. We expect the project fea- INVESTOR’S DIGEST

Issue 3 / 19 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS February 8, 2019 / 59 sibility study to fully evaluate those GGB announced that it expects to ing a software-centric version of Syn- $110 million which it expects to ap- “sector perform” recommenda- trade-off studies. complete a private placement to thetic Aperture Sonar (SAS) to com- proximate its 2019 cash flow tion. But they also reduce their 12- “Additionally, mineralized vein raise $300 million at a price of $7 to pete with more hardware-dependent (somewhat thematic across indus- month target share price to $2.25 corridors comprising the resource show support for the valuation,” and expensive SAS solutions. try), this compares with our previ- from $3. have an average width of 4.5 me- the analysts say. ous estimate for fiscal 2019 capital Painted Pony Energy is a tres with a near-vertical dip mak- “We believe that Aphria will spending of $118.2 million and growth-oriented public natural gas ing them amenable to long-hole trade close to the implied $11 Knight consensus of $125.3 million,” say producer, operating in the Montney stope mining. share price based on both short the analysts. “Cash flow guidance formation in Northeast British “Recent results from the Cari- covering but also potential for a Therapeutics for 2019 of $95 million $110 million Columbia. boo 2018 campaign demonstrated higher price in GGB following this compares with our previous esti- the down-dip potential to expand announcement. This has poten- MACKIE RESEARCH mate of $116.8 million (albeit using and define new vein corridors tially put Aphria in play at de- Taking a rest higher commodity input price as- Leagold Mining where assays returned 10.5 grams pressed valuation levels and does sumptions) and consensus of of gold per tonne of ore (g/t) over not eliminate the possibility of an- Digested from a Jan. 9 report $115.8 million. CIBC WORLD MARKETS 7.8 metres located 50 metres other suitor emerging. However, by analysts André Uddin “With this note we have made Better costs; upward down-dip of a hole with 9.33 g/t we think GGB is in the driver’s seat and Yue Toby Ma model adjustments which see our over 2.7 metres. Clearly, significant and presents excellent synergy fiscal 2019 cash flow go to $109 mil- earnings revisions potential exists to find new vein with Aphria and potential to exe- In what seems like a series of lion on our current (but dated) corridors; use their 3D litho-struc- cute a friendly transaction subject downgrades, Messrs. Uddin and price deck, and $91 million on cur- Digested from a Jan. 4 report by tural model which controls miner- to further discussions.” Ma advise investors to take a “hold” rent strip pricing in 2019. analysts Bryce Adams and Eve alization across the district 67-kilo- Aphria is a licensed producer position on Knight Therapeutics “PONY has provided guidance Hurowitz metre long strike length; upon re- with greenhouse operations in On- Inc. (GUD-TSX, $7.79). The ana- for 2019 production of 54,000 to ceipt of their mining permit, devel- tario. The company has current ca- lysts downgraded their recommen- 56,000 barrels of oil equivalent Leagold Mining Corp. (LMC- op underground drill stations to pacity of 30,000 kilograms with ex- dation from a previous “buy” and (BOE) per day, slightly below our TSX, $1.92) recently reported its test down-dip of known vein corri- pansion plans towards 250,000 reduce their target price for the previous estimate of 57,300 BOE 2018 fourth-quarter production. dors; and use favorable soil sample kilograms per year including its stock to $8, from $10.65. per day and consensus of 58,100 With the announcement of these data in the southeast extension for strategic partnership. Providing further colour, the an- BOE per day – with this note we results, analysts Bryce Adams and future upside. alyst notes, “we expect the compa- have revised our 2019 production Eve Hurowitz have updated their “In early 2018, Barkerville ny to go through a period of flat estimate to 54,700 BOE per day. model for the fourth quarter and tabled an impressive 3.75 million Kraken growth in 2019, and we do not ex- “PONY expects a 2019 liquids lowered their cost expectations. ounce resource and have since pect the company to conduct ma- weighting of nine per cent, inline They maintain their “outper- completed another 123,000 metres Robotics jor BD transactions as manage- with estimate of nine per cent but former” rating and 12-to-18- of primarily infill drilling. This new ment is still awaiting product ac- slightly below consensus of 10 per month target price of $3.50. data should help support increased BEACON SECURITIES quisition prices to drop – Knight cent. Our 2019 modeling now indi- The production results this confidence of measured and in- Cashed up to execute on may in-license/acquire small prod- cates an approximately five per quarter came in at 93,800 ounces, ferred resources and conversion of ucts down the road. cent decline in production per which were directly in line with the inferred ounces en route to our tar- strong order pipeline “Probuphine was launched in share relative to 2018.” estimated 93,700 ounces.Manage- get of 5 million ounces over the Oct. 2018. Iluvien, Netildex, Myte- Messrs. O’Rourke and Styner, ment noted that the all-in sustain- next 18 months (from 1.6 million to Digested from a Jan. 8 report si, TX-004/001 and tenapanor are who are adjusting their projections ing costs (AISC) for the full year will 2 million ounces). This size of re- by analyst Gabriel Leung slated to be launched between to take into account the updated source considerably distinguishes 2019 and 2020 – among which we guidance for 2019, reiterate their Continued on next page them from its peers both globally Analyst Gabriel Leung updates believe TX-004/001 should be the and within Canada.” his estimates for Kraken Robotics most important one. Our product Barkerville Gold Mines is en- Inc. (PNG-TSX/VEN, $0.39) esti- sales estimates suggest Knight gaged in the production and sale of mates to reflect the company’s re- would have flat growth in 2019 rel- Of Special Interest gold - along with the exploration, cent equity financing and to pro- ative to 2018 – the momentum development, and acquisition of vide an update on operations. The should come back in 2020 follow- mineral properties in British analyst gives the stock a “buy” ing the launch of TX-004/001. Barrick Gold Columbia. recommendation and downgrade “By the third quarter of 2018 their target share price to $0.70 end, Knight had $651 million in CIBC WORLD MARKETS from a previous $0.75. The price free cash ($4.56 free cash per share) New era for a new Barrick Aphria downgrade is largely due to dilu- which can be deployed to ac- tion from the financing, Mr. Le- quire/in-license products. Howev- Digested from a Jan. 2 report by analysts Anita Soni and Terry Tsui HAYWOOD SECURITIES ung explains. er, Knight’s management is price Could be taking over the Providing further commentary, sensitive and is still awaiting prod- As an investment thesis, Ms. Soni and Mr. Tsui state the 2018 merg- the analyst notes, “On Dec. 20, the uct acquisition prices to cool er of Barrick Gold Corp. (ABX-TSX, $18.43; ABX-NYSE, US$13.54) and green world company announced the close of down. We expect no major trans- Randgold Resources Ltd. has created the world’s largest gold produc- an equity financing where it raised actions for the company in 2019. er by all relevant metrics. The newly combined company will create a Digested from a Dec. 28 report $6 million at $0.40 per share. Post “However, we believe Knight platform of the highest concentration of Tier 1 assets, combined with by analysts Neal Gilmer transaction, we estimate that the could serve as a defensive play for a strong management team known for delivering industry-leading re- and Ethan Spence company has about 137 million ba- investors during a market down- turns for investors. sic shares outstanding and approx- turn as Knight has arguably the “While Barrick shares have outperformed peers by 11 per cent since Green Growth Brands Inc. imately 15 million options and strongest balance sheet in the the deal announcement, there remains a 26 per cent return to our price (GGB) has proposed taking over warrants. We also estimate the Canadian specialty pharma sector.” target at current multiples, and the potential for further upside op- Aphria Inc. (APHA-TSX, $7.57; company’s current cash position at Knight Therapeutics is a com- portunity with delivery of the strategic plan,” the analysts say as they APHA-NYSE, US$5.57). The ana- approximately $6 million. mercial-stage specialty pharmaceu- resume coverage of Barrick Gold with a recommendation upgrade of lysts suggest the merger would pro- “Looking into the fourth quar- tical company focused primarily on “outperform” and a target price boost to US$17 per share from vide a strategic fit for both compa- ter of 2018 and beyond, the com- the Canadian market, as well as, US$14.50. nies and create a global force in the pany is sitting with a $13-million other lower competitive rest of the Barrick owns five of the world’s top-10 Tier 1 gold assets and ex- cannabis space. backlog (and approximately $4 world jurisdictions. tensive land positions in major gold districts. The diverse asset portfo- They recommend risk-tolerant million in business where the com- lio of 21 mines and six projects across North and South America, Aus- investors “buy” shares of Aphria as pany has been notified it has been tralasia and Africa “offers significant opportunities for production they expect either this transaction awarded), which should help to Painted Pony growth, asset rationalization, operational improvement, and opti- to close or another bidder to support our financial forecast over mization through exploration additions and mineral resources man- emerge. However, Messrs. Gilmer the near-term. Included in this Energy agement,” according to the analysts. and Spence lower their price target backlog is approximately $9 mil- These Tier 1 gold assets (that is, 500,000 ounces of gold per annum, to $17 per share from $13, as they lion in batteries to Ocean Infinity ALTACORP CAPITAL with over 10-year mine life) include Goldstrike, Kibali, Pueblo Viejo, believe that the approximate $11- and AquaPix sonar sensors to mili- 2019 guidance modestly Loulo-Gounkoto and Cortez. The combination of Barrick and Rand- per share offer undervalues the tary and commercial customers. gold provides an industry-leading platform for Barrick to maintain a fundamental valuation of Aphria. “The company also continues negative production profile of 4.5-to-5 million ounces of gold. The all-stock offer would pro- to operate with a large pipeline of The analysts expect new CEO Mark Bristow “to continue his disci- vide Aphria shareholders with opportunities, particularly across Digested from a Dec. 18 report plined approach to assessing new projects, with high after-tax hurdle 1.5714 common shares of Green North American and European by analysts Patrick O’Rourke rates, which should drive improved shareholder returns”. The Rand- Growth Brands (with an implied Navies for mine-hunting sonars. and Kyle Styner gold team delivered an industry-leading return on invested capital of priced at $7 per share) for each The company is also preparing to 9.4 per cent, on average, between the years 2013 to 2017, consistently common share of Aphria. This of- submit a three-year, $30 million Messrs. O’Rourke and Styner outperforming other North American seniors. fer translates to a 45.5 per cent pre- contract to provide ultra-high def- say that Painted Pony Energy The new management team has reiterated the company’s drive for mium to the closing price of Aphria inition seabed and subsea asset Ltd.’s (PONY-TSX, $1.33) 2019 further improvement in efficiency through ongoing business process on Dec. 24, 2018 and a 46 per cent data via the Canadian Ocean Su- guidance and capital budget was improvements, supply-chain management, technological innovations premium to Aphria’s 10-day vol- percluster initiative. modestly negative. But they add and corporate-cost containment. ume-weighted average price on the Newfoundland-based Kraken is a that management is doing the right Noteworthy to Ms. Soni and Mr. Tsui is that Barrick is now amongst Toronto Stock Exchange, assuming marine technology company provid- thing despite a difficult macroeco- the lower-cost senior gold producers with all-in-sustaining costs esti- an implied price of GGB of $7. ing ultra-high resolution, software nomic environment for gas pro- mates below U$800 per ounces, compared to the peer average of a per- “This would value Aphria at ap- centric-sensors and underwater ducers in Canada. ounce price in the mid-US$800s. proximately $2.8 billion based on robotic systems. Kraken was founded “PONY has announced a 2019 Barrick Gold is the world’s largest gold producer. $7 per share for GGB. In addition, with the objective of commercializ- capital budget of $95 million to INVESTOR’S DIGEST

60 / February 8, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 3 / 19

Continued from preceding page political issues, which can affect amortization) margins in the first ated with the acquisition of Digium buying back its shares. Mr. Li sees operations.The analysts clarify that quarter of fiscal 2019 (quarter end- were accounted for in the first that there is room to remain op- be in line with US$979 per ounce. their target price is based on min- ed Oct. 31, 2018) were stronger quarter. However, the company portunistic in its buybacks going The analysts’ full-year AISC esti- ing operations continuing without than anticipated. We view this as will likely have additional integra- forward, but the level of buyback mate is now at US$986 per ounce. interruptions. positive given that the first-quarter tion costs associated with the ac- may be a little more muted as Leagold’s Los Filos mine in Based in Vancouver, Leagold results included only one month of quisition of $500,000 to $700,000 in shares creep higher. The analyst Mexico had a strong quarter with Mining is building a mid-tier gold the higher contribution from the second fiscal quarter of 2019. gives the stock an “outperform” 58,200 ounces, compared to the es- producer with focus on Latin Amer- Digium. Based on our estimates, Sangoma Technologies is a rating and $94 target share price. timated 55,300 ounces due to con- ica. The company has four mines we believe that organic growth in provider of unified communica- Mr. Li goes on to further high- sistent recovery rates in December. plus two developing projects, in fiscal 2018 was above 12 per cent. tions solutions based out of light, “CGI is going to start accu- The RDM mine in Brazil produced Mexico and Brazil. “Management reiterated its Markham, Ontario. The Company mulating cash quickly on its bal- lower than expected results at guidance for fiscal 2019 and fiscal has developed or acquired products ance sheet. CGI has always publicly 4,900 ounces against the estimated 2020 with the first quarter of fiscal and services that offer a unified stated that they constantly review 7,400 ounces. Fazenda and Pilar Sangoma 2019 results. For fiscal 2019, rev- communications solution targeting their priorities how to deploy free mines (also in Brazil) both deliv- enue is expected to be $100 million small- to mid-size businesses, en- cash flow and we think a discus- ered in line with the analysts’ mod- Technologies with EBITDA margins of 10 per terprises and telecom providers. sion around a dividend is probably el – 19,000 ounces and 11,600 cent (35 per cent recurring/ser- timely now. ounces, respectively. ACUMEN CAPITAL vices revenue). For fiscal 2020, “We compare CGI versus the Over the course of the year, Big leap with Digium EBITDA margins are expected to CGI Group S&P/TSX Canadian Dividend Aris- Leagold Mining has produced improve to 13 per cent. We believe tocrats Index. What yield? We think 302,600 ounces, achieving the high- pays off that Sangoma is tracking ahead of RAYMOND JAMES it is more likely CGI would start in er end of the company’s revised its guidance. FINANCIAL the bottom quartile, like OTEX did guidance of 295,000 to 305,000 Digested from a Jan. 10 report “The sales split from higher Does strong cash generation when it initiated its dividend in ounces. The guidance was updated by analysts Nick Corcoran margin; recurring revenue for 2013, and grow the dividend con- in August to take into account the and Brian Pow cloud-based services is expected to spell dividend? sistently over the years. We think a Brio assets’ acquisition and revised grow through 2019. This is expect- $1 per share dividend would be a downwards in November due to Messrs. Corcoran and Pow tout ed from the full contribution of Digested from a Jan. 8 report start (approximately 1.2 per cent RDM’s temporary shut-down. Sangoma Technologies Corp. Digium (estimated to be 40 per by analyst Steven Li yield costing $290 million or about A technical study is expected (STC-TSX/VEN, $1.24) as the cent services), and continued 19 per cent of CFO). soon for a CIL plant at Los Filos for strongest performer in their cover- growth in Sangoma’s existing ser- Since fiscal 2014, CGI Group “How would a dividend-paying the underground ore with the age universe in 2018 with a 77.1 per vices segment. This was partially Inc.’s (GIB.A-TSX, $81.89; GIB- CGI stack up? Its free cash flow, 2019 guidance to follow shortly cent return. The analysts see the reflected in the first quarter results. NYSE, US$62.88) strong cash gen- compound annual growth rate thereafter. positive momentum continuing in “While mergers and acquisi- eration/growth has been strong, (over 10 years) at 16 per cent would It is expected that Leagold Min- 2019 since the financial results re- tions activity has slowed as Sango- making new highs in fiscal 2018 rank 12 out of 75 (versus Aristocrats ing will refinance corporate debt flect the transformative acquisition ma integrates Digium, we believe with $1.5 billion of cash flow from constituents) which could bode this year, which could “improve of software company Digium Inc. that acquisitions remain a core pil- operating activities (CFO) and well for future dividend growth.” the balance sheet and refocus the As such, the analysts give the stock lar of Sangoma’s strategy. $1.35 billion of free cash flow. In re- CGI provides a full range of IT story on operational improve- a “buy” recommendation and a “Acquisition costs related to cent years, CGI has been paying services including traditional IT ments and production growth”. $2.30 target share price. Digium were $2.1 million in fiscal down debt, but as Mr. Li looks at outsourcing, systems integration, IT Given that the nature of mining With regards to financial results 2019’s first quarter. This includes CGI’s upcoming debt maturities, consulting and BPO across a num- is risky, there can be key risks to the in 2019 the analysts go on to high- legal, financing, and other closing there is not much debt repayment ber of different industry verticals target price such as commodity light, “EBITDA (earnings before in- costs. Management indicated that scheduled in the next few years. and geographic regions. prices, exchange rate, technical, or terest, taxes, depreciation and most of the one-time costs associ- CGI has also been quite active

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Issue 3 / 19 WHAT THE BROKERS SAY ABOUT U.S. STOCKS February 8, 2019 / 61

ividends are a big part of questions about this deal, but after stands to benefit many of the times. million tons of sand sold in the any corporation’s re- speaking with the company our equipment vendors in our cover- With the recent $1 billion fourth quarter, down 29 per cent sponsibility to its share- overall view is that this deal looks age, particularly Nokia, whose Mountain View asset sale to quarter-over-quarter from 2.8 mil- holders. When a com- like it could be a positive move for portfolio is diversified across both Google; its asset base has been lion tons and below managemen- Dpany has a good year, its profit the company, although the degree radio-access-network and wireline. repositioned under new manage- t's guidance of between 2.3 million must be paid out to its sharehold- of success will be heavily depen- “We believe the ongoing ment to represent a healthy mix of and 2.5 million tons. ers to reflect their importance dent on both execution of the Huawei controversy presents a sig- senior housing, life sciences, and “As a reflection of Hi-Crush's within the company. pipeline as well as the ability to nificant opportunity for Nokia to Medical Office. lower-than-expected sales vol- successfully integrate Celgene and take share over the next few years. umes we are reducing our fourth- GENERAL MOTORS extract the estimated synergies. “ Several Tier-1 service providers HI-CRUSH PARTNERS quarter operating profit estimate Bristol-Myers is the eight largest have signaled their intent to aban- by roughly $10 million to end with GM-NYSE, $33.33 drug developer in the United don Huawei as a vendor, freeing HCLP-NYSE, $3.66 $13 million (was $46 million in the BMO Capital Markets States, with an annual revenue of up billions of dollars for Nokia to AltaCorp Capital third quarter and $84 million in the Richard Carlson $20.8 billion in 2017. Celgene is capture. Tim Monachello and Patrick Tang quarter before that).” ninth largest with 2017 revenue of “We estimate that Nokia could Analyst Mr. Carlson upgrades $13 billion. Combined the compa- gain an additional $1 billion in in- Soft fourth-quarter 2018 vol- DOMTAR his view of the shares of General nies have nine different drugs, six cremental sales, aiding top-line umes and uncertain markets Motors Co. from “market perform” from BMY and three from Celgene. growth after two years of declines. prompt Hi-Crush Partners LP to UFS-NYSE, $44 to “outperform” while raising his The analyst gives the sotck a “Both Nokia’s IP Routing and suspend its distribution as of Jan. 7 CIBC World Markets target price to $41 per share from “neutral” rating and a $59 target Optical Networks segments are po- – forcing the analysts Messrs. Hamir Patel and Roshni Luthra $38. The two key factors to his share price. sitioned well for a strong 2019. De- Monachello and Tang to reduce more constructive view are: An ex- mand appears to be growing from their target price to $3.50 per share Commodity price erosion has pectation of a brighter spotlight to CARETRUST both telco and non-telco cus- from $6.50 and keeping their “un- the analysts more cautious on their be placed on GM Cruise (a depart- tomers, and new products like the derperform” recommendation. position of Domtar Corp. Domtar ment of autonomous driving tech- CTRE-NASDAQ, $18.91 FP4 and PSE-3 chipsets should The analysts reduce their for- is the largest North American pro- nology) in 2019, leading to a more BMO Capital Markets drive further momentum. ward estimates based on their ex- ducer of white papers, a major appropriate value for this business John Kim “In the Optical segment we an- pectation for meaningful pricing market pulp producer and manu- being priced into the shares; and ticipate increased demand from reductions for Hi-Crush's “in- facturer of personal care products. restructuring efforts that will drive Although the skilled-nursing fa- web scale customers. basin” production from its Kermit The analysts say, “With Domtar better profitability and free cash cilities (SNF) sector continues to “The current trading levels pre- facilities (in the Permian Basin of recently trading below what we flow, as well as improve cyclical re- face structural headwinds, analyst sent an attractive buying opportu- Texas) during the first half of 2019. had previously deemed a down- silience. John Kim believes CareTrust REIT nity for Nokia shares. We are rais- Analysts believe a full suspen- side scenario valuation of $36, we Speaking on the auto industry is well-protected with a strong cash ing our 2019 EPS estimate to $0.40 sion (as opposed to a reduction) of have also trimmed our price target as a whole, Mr. Carlson says, “We rent coverage ratio. This is high- from $0.38, and introducing 2020 its $0.225-per share quarterly dis- to $47 from a previous $51. This is entered the past two years quite lighted by excellent coverage from EPS of $0.50. tribution is a prudent decision due to the increased uncertainty in bullish...With macro uncertainty its largest tenant and former par- “While we aren't as optimistic, “given the high level of uncertainty global pulp markets (due to China). high and investor sentiment low, ent, Ensign Group, a strong, well- Nokia believes that 5G will ramp regarding proppant demand, sup- Concerns on the pulp side are not we are now making a bit of shift to funded operator. As such the ana- sooner than expected - targeting ply and pricing at this juncture”. that surprising when one considers a more tactical approach (but still lyst upgrades the stock to an “out- acceleration in 2019, particularly at “Hi-Crush's soft fourth-quar- that China is expected to represent favour the auto industry). We be- perform” rating with a $22 target the network edge - spurring recov- ter volumes were at least, in part, approximately 75 per cent of pro- lieve a higher weighting should be share price. ery in this struggling Networks seg- caused by transitory factors jected softwood pulp demand placed on companies that have al- The analyst highlights, ment should these opportunities which negatively impacted de- growth over the next five years. ready built momentum for nearer- “CareTrust has a strong balance materialize.” mand and 2019 is likely to provide “The Pulp and Paper Industry term profit performance than sheet (3.6 times net debt to EBIT- a material rebound in Hi-Crush's Intelligence reported unabated those that would still be waiting for DA), and thus we believe acquisi- HCP sales volumes. pricing erosion in China where an inflection point even in a more tion volume increases to $265 mil- “We believe the most impor- pulp buyers (traders and mills) stable end-market environment.” lion average annually in 2019 to HCP-NYSE, $28.61 tant consideration for investors to- have forced price cuts from suppli- 2020, up from $108 million in 2018, BMO Capital Markets day is the negative momentum ers given weak demand and ‘mas- BRISTOL-MYERS SQUIBB leading to accelerated funds from John Kim building in proppant pricing in- sive national downtime.’ operations per share growth in cluding on Hi-Crush's fixed price “At the same time, the trade BMY-NYSE, $45.12 2019 to 2020, to 8.9 per cent. Analyst John Kim upgrades his in-basin proppant contracts; we magazine noted that many Chi- BMO Capital Markets “CareTrust's management has HCP REIT Inc.’s stock rating to believe this dynamic presents sig- nese buyers have reduced pur- Vamil Divan deep experience in the industry “outperform” from a previous nificant risk to 2019 cash flow. Giv- chase volumes, with some even and is selectively acquiring assets “market perform” and raising the en this risk we believe the suspen- declining their contracted pur- Surprising the Street, Bristol- at attractive yield spreads. target share price to $33 from a sion of Hi-Crush's distribution was chase volumes over the past two Myers Squibb Co. delivered a sur- “We estimate CareTrust's for- previous $30. This comes from a prudent and disciplined decision months.” prise when announcing its intent ward net asset value at $14.85 uti- HCP’s balance sheet improvement by its board. The analysts maintain a “neu- to acquire Celgene Corp. and gave lizing an 8.5 per cent cap rate. Our where net debt to EBITDA is 5.5 “Hi-Crush reported roughly 2 tral” recommendation. the analyst cause for positivity. The discounted cash flow estimate is deal is expected to close in the $23.26, which values five-year free third quarter of 2019, and upon cash flow to equity, using an ap- closure BMY shareholders will rep- proximately six per cent equity risk resent 69 per cent of the combined premium (plus a 1.75 per cent Resetting expectations company. small cap premium) and a three Providing further commentary, per cent perpetuity growth rate.” Micron Technology Inc.’s guid- MICRON TECHNOLOGY “Fiscal first quarter (ended the analyst says, “BMY sharehold- ance of the fiscal second quarter of MU-NASDAQ, $34.11 November) revenues and EPS Deutsche Bank ers reacted negatively to the deal NOKIA 2019 was quite a bit worse than of $7.91 billion and $2.97 were today Jan. 3, with BMY down be- what the analyst expected. The an- Sidney Ho consistent with prean- tween 10 to 15 per cent on heavy NOK-NYSE, $5.74 alysts also see oversupply head- nounced results, as compared trading volume. However, the deal BMO Capital Markets winds continuing through the first half of 2019. The to our estimate of $7.95 billion and $2.88 and does what many investors have Tim Long spot of encouraging news comes from Micron’s Street's $8 billion and $2.94 respectively. Micron ex- been looking for BMY to do, ex- management reacting swiftly by reducing capital pects fiscal second quarter 2019 (ending Feb.) rev- panding the near-term pipeline With the telecommunications spending and planned bit shipment output. This, enues of $5.7 to $6.3 billion, which is below ours beyond just new Opdivo (cancer spending environment improving, along with capital expenditure push-outs by other and the Street’s estimates of $7.17 billion and $7.27 medication) indications. On the analyst Tim Long sees Nokia Corp. memory suppliers, should set up for a recovery billion due to a combination of inventory adjust- other hand, buying Celgene raises as well positioned to take advan- starting in mid-2019. ments, CPU shortages and pricing decline. new questions, comes with its own tage of this dynamic in 2019, par- The analyst goes on to highlight, “While the pace “As the oversupply situation worsened during risks, and is not a complete solu- ticularly as 5G begins to take shape. of demand recovery is debatable, we also note that the quarter, MU was quick to make strategic deci- tion to the issues that we believe The analyst also notes that the Micron is likely to be much more profitable at the sion to cut fiscal 2019 capital expenditure from Bristol has been facing. recent Huawei controversy may bottom of this cycle - we model trough earnings per $10.5 billion to $9-9.5 billion, while significantly re- “We and investors have many free up billions in telecommunica- share (EPS) at approximately $1.50 in the fiscal third ducing bit shipment for the second fiscal quarter tions capital expenditure that quarter of 2019 - than previous cycles. With book (now expect bit shipment to decline quarter-over- Nokia can seize upon. Mr. Long is value likely going up, we believe Micron is an at- quarter) and for calendar 2019. The company is NOTA BENE upgrading his recommendation tractive investment over a 12-month period. We hopeful that demand will recover in second half of from “market perform” to “outper- maintain our ‘buy’ rating but lower our price target calendar 2019 based on solid demand growth, de- PL’s Investment Planning form”, and raises the target share to $48 from a previous $60. pleted inventory and price elasticity. MCommittee recommends price to $7.50 from $5. “Micron executed well in the first fiscal quarter “Overall EPS guidance of approximately $1.75 is that around 25 per cent of a The analyst goes on to high- of 2019 with record revenues in its mobile, auto and well below Deutsche Bank and the Street’s esti- Canadian investor’s stock light, “After a better than-expected industrial end markets. In the NAND storage tech- mates at about $2.40 and also below buyside whis- portfolio be in U.S. equities. 2018, we anticipate two per cent nology department, mix shift continues to move to- per of about $2. On the second fiscal quarter of This allows greater diversifica- year-over-year growth in telecom- wards high-value solutions, with over 50 per cent of 2019’s guidance, we lower our EPS estimates from tion. But when investing in the munication spending for 2019, NAND bits shipped in high-value solutions, sup- $2.40 to $1.80, calendar year 2019 estimates from U.S., the focus should be on with some of this growth stemming porting a NAND gross margin of over 45 per cent $8.50 to $7.20 and calendar year 2020 estimates companies that Canada lacks from initial 5G deployments in despite the market oversupply. from $8.50 to $7.60.” or has in short supply. North America and parts of Asia. This better capex environment 62 / February 8, 2019 INVESTOR’S DIGEST Issue 3 / 19

WHAT THE MARKET LETTERS SAY Markets bounce back from late 2018 downturn

he markets aren’t as Systems Inc. (CSCO-NASDAQ, the value of crude oil futures con- a bushel of Chinese stocks that L.P. to a C-corp. next year. Divi- bullish nowadays, and the US$44.21) that will promote Cis- tracts, which is where the DBO have begun what I call 'value dend investors should lock in this Toronto Stock Exchange is co’s Connected Roadway solution invests all of its assets. Lately, that bounces' in early 2019.” One of his extraordinary BX yield, thus it is hardly an exception. In through several initiatives between strategy has been working: the examples of a “value bounce” idea one of Ms. Huff's “strong buy”. Tmid-December, it reached its low- the two companies. Socket Mobile DBO is up 17 per cent in the last is iQIYI Inc. (IQ-NASDAQ, Apollo’s assets under management est mark in two years. Greater oil Inc. (SCKT-NASDAQ, US$2.03) three weeks. This one tends to US$17.56), the subsidiary of Baidu total US$270 billion, broken down price differentials between crude announced the expansion of the move fast when oil prices are on Inc. that he owned for part of last as follows: credit (68 per cent), pri- oil in the U.S. and Canada, along DuraCase product line to support the rise, advancing 60 per cent in year. IQ provides online entertain- vate equity (27 per cent) and real with falling crude prices overall are Apple's iPhone and iPhone Plus the year prior to the collapse in ment services and operates a plat- estate (five per cent). APO is a mid- widely cited as the biggest cause for mobile phones. CPS Technologies crude that began in October. form that provides a collection of cap stock with a market capitaliza- a weak Canadian stock market. Corp. (CPSH-NASDAQ, US$1.44) Internet video content. Its share tion of US$4.9 billion. For compar- However, energy still offers paths announced that it expects rev- price went from around US$40 a ison, BX has a market cap of US$36 to profit, such as investing in one of enues for the fourth quarter ended Cabot Emerging Markets Investor, share in June 2018 to just US$15 in billion. The most recent four quar- North America’s fastest-growing Dec. 29, 2018 will approximate c/o Cabot Heritage Corporation, late 2018. Since then, like many terly dividend payouts totaled independent marketers of fuel and US$6 million, compared with 176 North Street, Salem, MA other Chinese stocks, it has begun US$1.93. At a share price of petroleum, Parkland Fuel Corp. US$3.8 million in the fourth quar- 01970 U.S.A., (978)-745-5532. an uptrend - rising to US$19. US$23.95, the stock is therefore Though its stock has gained 55 per ter of 2017. Smith-Midland Corp. Introductory one-year rate: Another one of his “value bounce” yielding 8.06 per cent. What’s cent since January 2018, Keystone’s (SMID-OTC, US$6.88) was chosen US$397. www.cabotwealth.com examples is a new recommenda- more, the stock traded as high as Income remains bullish. – E.A. to manufacture and install a Slen- tion - TAL Education Group (TAL- US$35.50 in October, so there’s 48 derWall envelope system for a new The biggest concern that new NYSE, US$29.76)—which fell from per cent capital gain potential for project in Weehawken, NJ. This chief analyst of Cabot Emerging US$47 in June to US$21 in October, new investors if the stock The Bowser Report, P.O. Box 5156, project marks the largest deploy- Markets Investor, Carl Delfeld and after steadying itself for a few rebounds to its 2018 highs. “As the Williamsburg, VA, 23188, U.S.A., ment of SlenderWall panels in the hears from investors about emerg- weeks, is back up to US$29. dividend yield increases in relation (757)-877-5979, US$59 a year. product's 27-year history. VirTra ing markets is they pose too much to the falling share price, the www.thebowserreport.com Inc. (VTSI-NASDAQ, US$3.85) risk. But the fact is, in the markets, prospect of owning APO shares updated its operational progress many supposedly “safe” stocks Cabot Undervalued Stocks Advi- becomes more compelling for Major indexes rallied for the and set its 2019 strategic priorities. (and markets) that attract conser- sor, c/o Cabot Heritage Corpora- both individual and institutional fourth consecutive week (as of Jan. VTSI intends to focus more of its vative investors actually pose more tion, 176 North Street, Salem, MA investors. During the last week of 18) and the Dow Jones Industrial resources on enhancing and diver- risk than believed. To highlight his 01970 U.S.A., (978)-745-5532. 2018, Tiger Global Management Average led the way (up three per sifying its technological suite as case, he points to two of America’s Introductory monthly rate: LLC reported a recent purchase of cent for the week). Banks kicked off well as expanding its sales pres- bluest blue chips - Kraft Heinz US$29.97. www.cabotwealth.com 1.1 million APO shares at an the earnings season, with Gold- ence and footprint in the military Co. (KHC-NASDAQ, US$47.08) approximate cost of US$26 mil- man Sachs Group Inc. (GS-NYSE, market in 2019. and FedEx Corp. (FDX-NYSE, Analyst Crista Huff frequently lion. APO joins Ms. Huff's Growth US$199.09) and Bank of America US$173.27). Mr. Delfeld states, mentions the benefits of buying & Income Portfolio today, with the Corp. (BAC-NYSE, US$28.99) “These are truly great companies. big-dividend stocks while their caveat that the share price will reporting outstanding financial Wall Street's Best Daily, P.O. Box But both stocks have faced steep prices have been temporarily likely continue to stagnate for a results. These strong earnings and 2049, 176 North Street, Salem, MA declines in their share prices as the pushed down by bearish stock while. She's giving APO a “buy” the recent trade headlines resulted 01970 U.S.A., (978) 745-5532. companies have warned about market trends. In that light, the recommendation and encourag- in a continuation from equities. cabotwealth.com/daily slowing growth. Kraft Heinz has company with the biggest current ing income investors and patient Bowser stocks (up 1.8 per cent for gone from US$80 a share to the low yield on her “waiting-in-the- growth investors to buy now.” the week) slightly underperformed After cratering in the last three US$40s and FedEx has lost a shock- wings” Buy List is Apollo Global despite having another positive months of 2018, crude oil prices are ing US$100 per share in the last Management LLC (APO-NYSE, hort takes, pro, con, maybe: week. Galaxy Gaming Inc. (GLXZ- back on the rise, poking their head year to trade at around $165!” For US$27.88), an alternative invest- The Canadian big banks are OTC, US$1.65) was the week's top above US$50 a barrel after dipping long-term investors, both FedEx ment company that operates in a expected to earn more this gainer and hit a new 52-week high. as low as US$43 a barrel on Christ- and Kraft Heinz are probably solid similar fashion to Blackstone year and next, but their The stock gained 24 per cent on the mas Eve. Oil ETFs are starting to ideas, though odds favor both Group LP (BX-NYSE, US$32.64) Searnings per share are expected to week and is now up 148 per cent look appealing again after getting stocks need bottoming processes within her Growth & Income Port- grow by a slower rate this year, since Bowser's recommendation in pummeled during the recent mar- before getting going. “That is exact- folio. It is the world’s largest and according to The MoneyLetter May 2017. “While small caps did ket correction. Oil is becoming a ly what I’m seeing in emerging most diversified alternative asset advisory. That’s because they like- underperform as a whole, the 2019 good momentum play again, and markets, with Chinese stocks in manager with US$456.7 billion in ly face some headwinds in fiscal rally has yet to lose steam,” the the most efficient way to play it is particular getting hit (the Shanghai client assets. Speculative investors 2019. More stringent regulations advisory suggests. In other news, through an oil ETF. One oil ETF to composite index lost 25 per cent in have an opportunity for outsized are making mortgages more diffi- Dynasil Corp. of America (DYSL- buy is iShares U.S. Oil & Gas 2018). This pullback has resulted in capital gains if BX converts from an cult for consumers to obtain. This NASDAQ, US$1.06) announced Exploration & Production ETF reduces profits from this lucrative that its Evaporated Metal Films (IEO-BATS, US$58.41). As the market. Then, too, low oil prices Corp. subsidiary achieved ISO name suggests, this ETF holds oil INVESTOR’S DEFENCE AGAINST RECESSION could push some oil and gas com- 9001:2015 certification for its orig- and gas companies specifically panies, as well as their employees, inal manufacturing location in focused on exploration and pro- Mind Over Markets, C/O Investing Daily, 7600A Leesburg Pike, West over the brink. The banks then may Building, Suite 300, Falls Church, VA 22043 U.S.A., (800) 832-2330. Ithaca, NY. Iteris Inc. (ITI-NAS- duction. It counts ConocoPhillips www.investingdaily.com/mind-over-markets have to eat rising loan losses if peo- DAQ, US$3.97) announced a (COP-NYSE, US$67.06), Devon ple lose their jobs. strategic partnership with Cisco Energy Corp. (DVN-NYSE, US$26.39) and EOG Resources Inc. hen thinking about the most reliable equity names out (EOG-NYSE, US$99.05) among its there, we were led to the defense sector. It’s a shame, but Canadian MoneySaver, 55 King 10 largest holdings (out of 100). IEO our species will always be at conflict. Regardless of eco- Street West, Suite 700, Kitchener, is up 20 per cent in the last three nomic outlooks, technological advances, or government ON N2G 4W1, 519-772-7632, HOTLINE weeks (as of Jan. 21), rising to treaties,W robust defense spending will remain a constant throughout. $24.95 a year for nine issues. US$57 after bottoming at US$47 on Indeed, the Pentagon currently enjoys huge budget increases, despite www.canadianmoneysaver.ca Christmas Eve. A second oil ETF to growing federal deficits. The hotline number for buy is the United States Oil Fund When looking at some of the largest public companies in the Investors with holdings in the Investor’s Digest is 416- LP (USO-NYSE/Arca, US$11.03). defense sector, they performed relatively well during the Great Reces- Canadian energy sector have lost 869-2777 ext. 800. The hot- USO is the best pure-play fund that sion as illustrated by these three industry giants: Lockheed Martin money on even the safest bets. A line is intended to keep tracks crude oil prices; it’s the Corp. (LMT-NYSE, US$278.80), whose operations encompass every- global oil glut, partly fueled by readers abreast of informa- largest, most liquid of futures- thing from aircraft and missile systems to space operations and energy, increased U.S. energy production, backed oil ETFs, with 23 million grew earnings per share (EPS) by six per cent in 2008 and three per cent has depressed oil prices around the tion in Investor’s Digest. It shares exchanging hands daily and in 2009; Raytheon Co. (RTN-NYSE, US$162.84), best known for its mis- world. In Canada, where opposition will be updated regularly on roughly US$2 billion in assets. The sile defense systems and cyber warfare assets, posted EPS growth of 23 to new pipelines has made it difficult Fridays by 6 p.m. eastern USO is up more than 17 per cent in per cent in 2008 and 20 per cent in 2009; and Northrop Grumman for oil and gas producers to get their time. The hotline will inform the last three weeks – riding the Corp. (NOC-NYSE, US$264.08), which makes the famous B-2 stealth products to market, the slump has readers about the forth- coattails of the big run-up in oil bomber and command and control systems, saw its EPS grow by two been especially painful. Figures at prices. In fact, over the past five per cent in 2008, and fall by just seven per cent in 2009, only to recover OilPrice.com show global oil prices coming issue and, when years USO has had a 0.96 correla- with a huge 39 per cent growth year in 2010. are at a long-term low, with the necessary, provide updates tion (1.0 is the highest) with crude. All three of these names continue to be leaders in their respective slump especially painful in Canada, on information in the Digest That’s a good thing now that oil fields. Their sales and earnings are fairly predictable due to massive where pipeline opponents currently that might have been prices are surging again. A third oil government spending in defense, something that should only increase hold sway. As a result, Canadian superseded by events. ETF to buy is Invesco DB Oil Fund with President Trump asking NATO allies to up their defense budgets. crude oil futures trade at only a frac- (DBO-NYSE, US$9.64). This one’s a They also trade at bargain levels, down double digits from 2018 highs. tion of West Texas Intermediate bit more niche, but it’s based on (WTI). As of early December, the Issue 3 / 19 INVESTOR’S DIGEST February 8, 2019 / 63

WHAT THE MARKET LETTERS SAY

natural-gas utility that serves NEWMONT REPLACES BARRICK AS WORLD'S LARGEST GOLD MINER about 640,000 customers in Penn- sylvania, but the traditional utility The Investment Reporter, MPL Communications, 133 Richmond St. W., Toronto, ON M5H 3M8, contributes only about 10 per cent LETTER (800) 804-8846, $337 a year. www.investmentreporter.com of the company’s revenue, versus 70 per cent from the sale of propane, half in the U.S. and half OF THE ewmont Mining Corp. (NEM-NYSE, corp will develop most of its future mines in min- in Europe. The remaining 20 per US$31.62) is acquiring Goldcorp Inc. (G- ing-tolerant jurisdictions governed by rule of law. cent of revenue comes from a mix TSX, $13.78; GG-NYSE, US$10.34). The Of the company’s reserves and resources, of power generation, power mar- WEEK shareholders of both companies should three-quarters are in the Americas, 15 per cent in keting, and pipeline or storage Nprofit, says editor Marc Johnson. The acquisition Australia and 10 per cent in Ghana, which is a operations. UGI is a “long-term Bob Carlson's Retirement will create the world’s largest gold producer, with member of the Commonwealth. Newmont Gold- buy” with a 1.9 per cent yield. Watch, P.O. Box 9009, Wal- production of six-to-seven million ounces of gold corp will start by developing the mines with the dorf, MD 20604-9009, (800)- for years to come and even more as it develops new largest potential returns and the lowest level of 552-1152, US$99 a year. mines. Newmont will issue 0.328 of its own shares risk. It will also divest assets of US$1-to-US$1.5 The Energy Letter, C/O Investing www.retirementwatch.com for each of your Goldcorp shares. billion over the next couple of years. Daily, 7600A Leesburg Pike, West This “represents a 17 per cent premium based The divestments are thought to include some Building, Suite 300, Falls Church, arket volatility on the companies’ 20-day volume weighted aver- of Goldcorp’s less-productive Canadian mines. VA 22043 U.S.A., (703)-394-4931, continued in age share prices”. Also, Goldcorp shareholders The company believes this will “optimize gold US$399 a year. www.investing- the last month will get a better management team. Newmont production”. Newmont Goldcorp also expects its daily.com/the-energy-letter of 2018, and chief executive officer Gary Goldberg said, “The integration to save up to US$100 million a year in Mmost of that volatility has combination is expected to be immediately accre- costs, before income taxes. This should enable Uranium is one of the most been on the downside. tive to Newmont’s net asset value and cash flow Newmont to retain its investment-grade credit specialized chemical elements on Floating rate bonds (or per share.” Also, newly named Newmont Gold- rating, and lift share prices and earnings. the planet. Its commercial use is leveraged loans) joined the limited to fueling power plants negative trend. and making weapons. The nucle- Editor Bob Carlson owns ar energy sector has undergone them through Double Line price for Western Canadian Select ment on energy dropped signifi- driving sector earnings and divi- considerable change during the Floating Rate Class 1 (WCS) oil was just US$26 per barrel, cantly for both advisors and dend paying power. The only ques- past decade. You may recall that Shares (DBFRX-NASDAQ, less than half the US$53 WTI price investors, which can be attributed tion is when a critical mass of a nuclear power plant in Fukushi- US$9.67), and for him, the and near its 2016 lows, the site says. to stalled energy infrastructure investor dollars will flood back to ma, Japan melted down in 2011. fund has been a reliable As of early December Canadian projects across the country. - The the energy sector.” As a result, many countries cut diversifier for his portfolios Natural Resources Ltd. (CNQ-TSX, Investment Executive back or curtailed their plans to the last few years. Compa- $36.51) and EnCana Corp. (ECA- expand nuclear energy. The price nies that issue leveraged TSX, $9.34) were at their lowest since Dow Theory Forecasts, 7412 of uranium fell steadily over the loans tend to have lower 2016, Tourmaline Oil Corp. (TOU- Energy & Income Advisor, c/o Cap- Calumet Ave., Hammond, IN next several years, bottoming out credit ratings. DBFRX, how- TSX, $19.18) was trading at less than italist Times, LLC, 6841 Elm St. 46324-2692, U.S.A., (800)-233- below $20 a pound in November ever, seeks safety of princi- the $20 price at which it went public #1057 McLean, VA 22101, (877)- 5922, US$289 a year. 2016. In addition, demand for all pal first. During the down- in 2010 and both Seven Generations 302-0749, US$649 annually or www.dowtheory.com types of power, including nucle- turn, it has been among the Energy Ltd. (VII-TSX, $10.58) and $194 quarterly. www.energyand- ar, is expected to surge in Asia top-performing funds in the PrairieSky Royalty Ltd. (PSK-TSX, incomeadvisor.com Large-caps have been sitting at over the next 10 years. By 2035, floating-rate bond category. $19.62) were below their 2014 issue the lead table for five years. Don’t the demand for electricity is pro- Though down 1.98 per cent prices. Some companies in the ener- The energy sector rally that count on that trend continuing jected to increase by 50 per cent in December, it still man- gy sector appear to be good began in the last days of 2018 has forever. The lower volatility of over recent levels. Six countries ages a 1.9 per cent return turnaround candidates for risk-tol- continued into early January. The mid-caps gives them a higher account for nearly 90 per cent of for 2018. For now, Mr. Carl- erant investors who can afford to long-suffering Alerian MLP Index is return/risk ratio. Midcaps offer the world’s uranium production. son recommends “selling” wait for a recovery. The recent 15 per cent higher than its post- much of the nimbleness and Of those, we prefer companies DBFRX, and putting pro- record low price for most of the ETFs Christmas Day low. The S&P 500 growth of small-caps, but benefit operating primarily in North ceeds towards conservative looks like a good buying-in point, Energy Index is better by almost 14 from the stability of larger, more America and Australia. Avoid com- near-cash investments. He but the risk is high — the funds per cent, as is North American oil established businesses. Some panies operating in Africa and recommends Vanguard could still go much lower. Here is a benchmark West Texas Intermedi- midcaps have become leaders in Russia due to increased security Treasury Money Market look at a few ETFs. The largest ener- ate (WTI) Cushing. Natural gas by their markets and consistent threats and political instability. Fund (VUSXX) with a cur- gy fund in Canada with $768-million the Henry Hub benchmark is flat growers, a fact that inspired the Below are the advisory's picks for rent yield of 2.22 per cent, in assets is iShares S&P/TSX after plunging more than one-third phrase “light-blue chips.” Four are the best uranium stocks to buy or even certificates of Capped Energy Index ETF (XEG- last month. But by and large, buy- reviewed below: Ciena Corp. now. Cameco Corp. (CCO-TSX, deposit from your local TSX, $9.78). The fund had 37 hold- ers are pushing up prices of energy (CIEN-NYSE, US$38.04), a maker $15.73; CCJ-NYSE, US$11.83), a bank. Mr. Carlson then sug- ings, with fully 24.8 per cent of its stocks, including many of the high- of computer-network equipment, Canadian miner with strong ties to gests owning global growth assets in Suncor Energy Inc. and 23 er yielding fare that took the encouraged by record orders and China. Cameco has partnered with stocks through WCM per cent in CNQ. The 12-month biggest hits in late 2018. Is this a bookings that exceeded revenue, China, which has 17 nuclear reac- Focused International trailing yield of 2.16 per cent is eligi- rally with legs? Or will it prove to be plus management’s projection of tors in development. China’s Growth Fund (WCMRX- ble for a dividend reinvestment plan just a bounce in a continuing three years of 20 per cent-plus reliance on coal to fuel its power NASDAQ, US$14.59). The (DRIP) the iShares site says. Others decline? There are several encour- growth in per-share earnings, ana- plants has resulted in some of the fund is down 5.16 per cent recommended are the “thinly-trad- aging signs that the energy sector lysts expect continued gains and is worst smog conditions in the for December and six per ed” BMO Junior Oil Index ETF (ZJO- has not only bottomed, but will be rated an “upside best buy”. ON world. Now, the country is spend- cent for 2018, but like TSX, $9.62) with $70.8-million in net a strong outperformer in the New Semiconductor Corp. (ON-NAS- ing heavily on nuclear power to DBFRX, it is ahead of most assets and its annualized distribu- Year. “Certainly not every sector DAQ, US$17.82) fell 45 per cent in provide a much cleaner alternative funds in its category. tion yield of 0.4 per cent. Horizons stock will prosper. For example, the seven months ended Oct. 22, to coal. Second is Energy Fuels “It holds companies that S&P/TSX Capped Energy Index ETF since our last EIA issue, two Endan- feeling the heat along with the rest Inc. (UUUU-NYSE/Arca, it believes are great long- (HXE-TSX, $16.53). This fund’s units gered Dividends List members of the industry, including Ciena. US$2.87), a Colorado company term investments, with low were $25 when it launched in 2013, have eliminated distributions. And Since the October low, the shares with an inside track on U.S. or no debt, and high returns fell to a low near $15 in 2016 and a company third is set to do the have risen 21 per cent, though the defense spending. The U.S. gov- on capital,” Mr. Carlson have slipped again to near $16. The same later this month,” says ana- ride along the way has been ernment is putting enormous remarks. The fund owns 33 fund has about $21.7-million in lyst Elliot Gue. “With North Ameri- bumpy but is still considered a pressure on other countries to dis- stocks and has 26 per cent assets as of Nov. 30. The fund offi- can oil and gas drilling activity “long-term buy”. Performance continue their uranium produc- annual turnover. He recom- cially pays no distributions, which expected to wane in the first half of Food Group Co. (PFGC-NYSE, tion, to reduce the risk of nuclear mends “holding” WCMRX the Horizons site points out is a tax the year, the door to accessing cap- US$33.71), the third-largest weapons falling into the wrong as it is “one of the top funds advantage. ital markets on economic terms whole-sale food distributor in the hands. Instead, the U.S. would pre- in good and bad markets.” remains slammed shut in the faces U.S., serving over 150,000 cus- fer that uranium for nuclear ener- For those betting on infras- hort takes, pro, con, of all but the largest and strongest tomers, grew per-share profits and gy be obtained only from trusted tructure stocks (i.e. maybe: Despite a near-10 energy companies. That’s forcing operating cash flow at least 30 per sources (i.e. from within the U.S.) pipelines, utilities, cell tow- per cent drop in the companies to self-fund virtually all cent in the 12 months ended Lastly there is Global X Funds (LIT- ers, etc.), Mr. Carlson sug- S&P/TSX 60 index last capital spending, and in many cas- September. The consensus pro- NYSE/Arca, US$28.18), a uranium gests the closed-ended fund Squarter, 56 per cent of advisors es debt refinancing as well.” The jects flat profits for the December exchange-traded fund (ETF) that Cohen & Steers Infrastruc- have maintained their bullish out- good news for investors is four- quarter but growth of 15 per cent provides diversification. Mining for ture Fund Inc. (UTF-NYSE, look on Canadian equities going and-a-half years after oil cracked for full-year 2018 and 13 per cent uranium is an inherently risky US$21.99). The fund uses 30 into the first quarter of 2019. Near- under US$100 a barrel, the sur- for 2019. The company’s aggres- business, so owning an ETF of per cent leverage and yields ly two-in-three investors are vivors of this battered industry are sive expansion into new geo- dozens of companies reduces the 8.67 per cent. Of note, the bullish on gold bullion, and 48 per doing the job. Shale focused pro- graphic markets is driving much overall volatility of your portfolio. It fund hasn't made any cent are bullish on silver bullion ducers will adjust output with price of that growth, and is rated as an also ensures that you will partici- return of capital distribu- (both of which delivered positive swings. “But the big capital invest- “upside best buy”. UGI Corp. pate in an uptick in global demand tions this year or last. returns last quarter). Bullish senti- ments continue to move forward, (UGI-NYSE, US$55.35) operates a for uranium products. Issue 3 / 19 INVESTOR’S DIGEST February 8, 2019 / INDX1

12 - MONTH COMPANIES INDEX (FEBRUARY 2018 - JANUARY 2019)

Canadian National Railway 32, 36, 42, 43, Currency Exchange International 58, 166, First Quantum Minerals 243, 307 Indigo Books and Music 428, 496 This index covers the previous 12-month period to the 347, 503 279, 302, 340, 435 First Solar 86, 281 Indiva 388 current date. Canadian National Railway Co. 107 CVS Health 62, 151, 175, 307 First Trust Nasdaq Clean Edge Smart GRID InfuSystem Holdings 306 Bold-faced page numbers refer to 2019 issues, while all Canadian Natural Resources 26, 43, 114, Infrastructure Index 526 ING Groep NV 281 other page numbers refer to issues published in 2018. 131, 158, 202, 334, 378, 466 First Trust Natural Gas ETF 387 Innergex Renewable Energy 126 Canadian Pacific Railway 83, 158, 290, D.R. Horton 131, 218, 326, 483 Five Below 281 Inovalis REIT 270 Azure Power Global 239, 282, 482 340, 455, 466, 479, 495 Dalradian Resources 302 Flex 306 InPlay Oil 81, 168, 430 M 483 3 Canadian REIT 175 Darden Restaurants 325, 457 Flexible Solutions International 43 Input Capital 107 Canadian Tire 43, 127, 229 David’s Tea 305 Foot Locker 43, 502 Intel 18, 130, 175, 415 2Gold 480 Canadian Utilities 215, 343 Deere 41 Ford Motor 219, 458 IntelliPharmaCeutics International 21 58.com 218 B Badger Daylighting 43, 46, 99, 187, 188, Canadian Western Bank 287 Deere & Co. 17, 261 Fortescue Metals Group 243 Inter Pipeline 34 256, 347, 478 Canamex Gold 111 Delek Drilling 439 Fortis 174, 360, 476, 495 Interfor 475, 493 Delek US Holdings 150, 262, 306 &W Revenue Royalties Income Fund 42 Baidu 218, 306, 326, 438, 483 Canarc Resource 19 Fortuna Silver Mines 198, 344 International Data 19 A Delphi Energy 80, 212, 319 AbbVie 194 Ball 17, 481 Canfor 517 Fossil Group 223 Interpace Diagnostics Group 395 Delphi Technologies 130 ABcann Global 228, 286 Balmoral Resources 189 Canfor Pulp Products 343 Founders Advantage Capital 210, 384, 448 InterRent REIT 6, 50, 79, 490 Delta 9 Cannabis 286 Aberdeen Asia-Pacific Income Inestment Co. Banco Santander S.A. 42 Cannabis Wheaton Income 235 Franco-Nevada 495 Intuit 173, 457 Delta Air Lines 19, 483, 502 19 Bank of America 85, 458 CannaRoyalty 12, 147, 300, 408 Franklin Resources 458 INV Metals 243 Denison Mines 411, 453 Absolute Software 364 Bank of Montreal 37, 276, 283, 287, 323, 405 Cannex Capital Holdings 318 Freehold Royalties 8, 142, 257, 362 Invesco 481 Descartes Systems Group 12, 280, 448 6 Acasti Pharma 300 Bank of Nova Scotia 12, 42, 43, 86, 154, Canntab Therapeutics 442 Freeport-McMoRan 237, 349 Invesque , 138, 270, 402 Detour Gold 70, 145, 212, 321 Acerus Pharmaceuticals 170, 340 176, 287, 409, 459, 495, 526 CannTrust Holdings 98, 272, 519 Freshii 124, 521 InZinc Mining 282 Deutsche Bank AG 18, 307 Frontera Energy 387 iPath Bloomberg Copper Subindex Acreage Holdings 16 Bank of NY Mellon 18 Canopy Growth 18, 106, 155, 210, 286, Devon Energy 387 FSD Pharma 442 Total Return ETN 35 Activision Blizzard 237, 417 Barkerville Gold Mines 76, 391 309, 317, 414 DHX Media 433 Fuji Xerox 107 IPL Plastics 15, 343 Adobe Systems 173, 305 Barrick Gold 18, 19, 120, 213, 285, 527 Canopy Rivers 474 Diamond Estates Wines & Spirits 235, 299, Full House Resourts 527 Iqiyi 211, 326, 395, 438 Advance Auto Parts 261, 413, 525 Bausch Health 437 CanWel Building Materials Group 146, 433 320, 404 Funko 17 iRhythm Technologies 149 Advanced Disposal Services 525 Baytex Energy 38, 301, 388 Capital Power 125, 497 Diebold Nixdorf 415 Iron Bridge Resources 56, 170, 259, 450 Advantage Oil & Gas 209, 366, 387 BCE 125, 150, 451, 497 Capstone Mining 190 Diplomat Pharmacy 85 iShares 20+ Year Treasury Bond ETF 373 Adventus Zinc 344 Beazer Homes USA 457 Cara Operations 78 DIRTT Environmental Solutions 56, 165, 517 G4S PLC 370 iShares Brazil ETF 482 Aecon Group 254, 367, 422, 483 Becton Dickinson & Co. 194 Cardinal Resources 436 Discover Financial Services 307 Galaxy Gaming 131, 262 iShares Canadian Short-Term Bond AES 262, 395 Bed Bath & Beyond 307 Cardiome Pharma 22, 37, 189 Discovery Communications 481 Gamehost 164, 257, 386 Index ETF 110 Aetna 62, 151, 175 Beleave 286 Cargojet 81, 165, 252, 389, 520 Distinct Infrastructure Group 279, 448 Gartner 219 iShares Core S&P 500 Index ETF 439 Aflac 17, 219, 458 Bellatrix Exploration 164, 516 Carvana 263 Divestco 177 GDS Holdings 307 iShares Core S&P 500 Index ETF Ag Growth International 22, 57, 195, 258 Bellus Health 77, 521 Cascades 35 DOJA Cannabis 9 Gear Energy 124, 171, 231, 340 CAD-Hedged 110 AGF Management 76 Bengal Energy 302 Catamaran 151 Dollar General 263, 413 General Electric 42, 85, 221, 327, 399, 439 iShares Core S&P Small-Cap ETF 218 AGL Energy 283 Best Buy Co. 149, 327, 413 Caterpillar 483 Dollar Tree 17, 17, 263, 325 General Mills 193 iShares Core U.S. Aggregate Bond ETF 363 Agnico Eagle Mines 57, 285, 409 BeWhere Holdings 274 CBOE Volatility Index 175 Dollarama 12, 13, 184, 301 General Motors 219, 370 iShares Emerging Markets Fund 438, 502 Aimia 389 BHP Billiton PLC 243 CCA Industries 194 Dominion Energy 42, 151, 307, 438 Genuity Group 106 iShares Floating Rate Index ETF 414 Air Canada 307, 522 Big Lots 263 CCL Industries 144 Dominion Energy Midstream Partners LP Genworth MI Canada 97, 492 iShares Minimum Volatility Emerging Air Products & Chemicals 193 Bilibili Inc. ADR 395 Celestica 346, 475 42, 151, 438 Geodrill 32, 388 Markets 43 AirBoss of America 257, 428 BioSig Technologies 239 Celgene 42, 527 DowDuPont 43 George Weston 19, 144, 410 iShares MSCI Emerging Markets Index ETF Akita Drilling 455, 498 Birchcliff Energy 70, 124, 256 Cemex SAB de CV 174, 327 Dr Pepper Snapple Group 61 Gibson Energy 53, 212 307, 485 Akumin 408, 417 Bird Construction 13, 365, 522 Cemtrex 219, 238 Dream Industrial REIT 226 Gildan Activewear 147, 499 iShares MSCI Global Metals & Mining Alacer Gold 67, 213 Bird River Resources 177 Cenovus Energy 127, 188, 472 Dream Unlimited 388 Global Partners LP 62 Producers ETF 35, 99 Alamos Gold 10, 168 Black Diamond Group 233, 347, 454 Centene 41, 42, 151 Drone Delivery Canada 197, 505 Global Water Resources 164 iShares Russell 2000 ETF 486 Alaris Royalty 52, 145, 187, 497 BlackBerry 9, 52, 67, 169, 243, 323, 399, Centerra Gold 56, 213 Duke Energy 131, 174 Global X Copper Miners ETF 99 iShares S&P/TSX 60 Index ETF 23, 109 Alaska Air Group 17, 19 452, 505 Central Garden and Pet 17 Dundee Precious Metals 33 Global X Funds Copper Miners ETF 35 iShares S&P/TSX Capped Energy Index ETF Alcanna 417, 524 Blackline Safety 155, 185, 316, 453 Centric Health 190, 433 Dunkin’ Brands Group 129 Global X Lithium & Battery Tech ETF 526 110, 487 Alcoa 241 BlackPearl Resources 303, 478 CenturyLink 371 Dynacor Gold Mines 283 Global X Robotics & Artificial iShares S&P/TSX Capped Financials Aldershot Resources 419 Blackstone Group LP 19 Cervus Equipment 255, 518 INtelligence ETF 19, 526 Index ETF 110 Aleafia Health 9, 298, 408 Bloom Energy 393 CES Energy Solutions 147, 299 Blueknight Energy Partners LP 370 CF Industries Holdings 307 Gluskin Sheff + Associates 452 iShares S&P/TSX Capped Information Alerian MLP ETF 238 agle Point Credit 439 37 Bluestone Resources 233 CGI Group 15, 67, 70, 100, 151, 345, 422, 485 E goeasy , 228, 363, 473 Technology Index ETF 65 Alexion Pharmaceuticals 18, 150 Eastmain Resources 274 BMO Aggregate Bond Index ETF 110 Charlotte’s Web Holdings 9 Goldcorp 81, 125, 214, 285 iShares S&P/TSX Global Base Metals Algold Resources 365 eBay 17, 45 Golden Dragon ETF 438 BMO Covered Call Canadian Chartwell Retirement Residences 6 Index ETF 35 Algonquin Power & Utilities 13, 15, 140, Echelon Financial Holdings 124, 387, 519 Golden Predator Mining 287 Banks ETF 363 Chemours 218, 351 iShares S&P/TSX Global Gold Index ETF 238, 439 ECN Capital 252, 282, 455 Golden Star Resources 213 BMO Dow Jones Industrial Average Chemtrade Logistics Income Fund 50, 66, 110, 255, 486 Alibaba Group Holding 150, 218, 306, 326, 438 Ecopetrol SA 414, 502 Goldman Sachs Group 217, 283, 307 Hedged-to-CAD Index ETF 55 314, 358 iShares US Aerospace and Defense ETF 43 Alimentation Couche-Tard 13, 23, 171, Edison International 283 GoldMoney 13, 102 BMO Equal Weight Banks Index ETF 110, Chesapeake Energy 458 Israeli Mobileye BV 130 394, 432 Egalet 43 Gorman-Rupp 415 395 Chesswood Group 172 Iteris 238 Alio Gold 168, 300, 477 Eguana Technologies 100, 370, 472 GoverMedia Plus Canada 153 BMO Equal Weight U.S. Banks Cheung Kong Infrastructure Holdings 283 Ivanhoe Mines 81, 452 Allegiant Gold 324 Eldorado Gold 185 Gran Tierra Energy 232 CAD-Hedged Index ETF 3 Chinook Energy 82 Allstate 194, 502 Electronic Arts 61, 237 Grande West Transportation Group 8, 10, BMO Equal Weight U.S. Banks Chipotle Mexican Grill 223 Alphabet 18, 195, 217, 219, 239, 243, 349, Element Fleet Management 100, 169, 430 184, 272, 299, 407 adestone Energy 211 Hedged-to-CAD ETF 487 Choice Properties REIT 19, 175 J 350, 417 Emblem 209, 286, 518 Gratomic 373 Jaguar Mining 145, 155, 241 BMO Equal Weight Utilities CI Financial 231 AltaGas 213, 275, 302, 410, 415, 482 Emera 53, 58, 321 Green Organic Dutchman Holdings 18 Jamieson Wellness 144 Index ETF 110, 373 Cigna 151 AltaGas Canada 37 Emerita Resources 191 Green Thumb Industries 478 Japan Gold 453 BMO Global Consumer Staples Cincinnati Financial 458 Altura Energy 34, 256, 392 Emmis Communications 326 GreenSpace Brands 125, 155, 388, 417 JD.com 42, 218 CAD-Hedged Index ETF 3 Cineplex 32, 56, 385 Alvopetro Energy 278, 452 Empire Co. 33, 164, 361, 452 GrowMax 280 JinkoSolar Holding Co. 281 BMO S&P 500 ETF un-hedged Cipher Pharmaceuticals 215, 384 Amarillo Gold 386 Enbridge 12, 36, 43, 140, 150, 320, 351, Grubhub 263, 349 John Bean 149 Cisco Systems 393 Amazon.com 17, 42, 45, 62, 86, 151, 194, Canadian Dollar 110 439, 503 GSE Systems 18 Johnson & Johnson 281, 459, 481 CIT Group 195, 239, 326, 458 195, 243, 263, 306, 327, 349, 350, 371, BMO S&P/TSX Capped Composite Enbridge Energy Management LLC 439 GT Gold 498 Journey Energy 84, 364, 496 Citigroup 18, 85 417, 459, 463, 485 Index ETF 110 Enbridge Energy Partners LP 439 Guyana Goldfields 417, 495 JP Morgan Alerian MLP ETF 42 Citizens Financial Group 307 American Midstream Partners LP 351, 370 BMO S&P/TSX Equal Weight Banks Enbridge Income Fund Holdings 439 GW Pharmaceuticals 300, 325 JP Morgan Chase & Co. 18, 85, 307 Clean TeQ Holding 219 American Outdoor Brands 174 Index ETF 154 Encana 122, 228, 387, 453 Just Energy Group 127, 361 American WaterWorks Co. 194 BMO S&P/TSX Equal Weight Global Base Clearwater Seafoods 145, 365 Endeavour Silver 436, 198 Amplify Transformational Data Sharing ETF Metals Hedged-to-CAD Index ETF 99 Clydesdale & Yorkshire Bank PLC 218 Enercare 395 H&R Block 305, 437 526 BMO S&P/TSX Equal Weight Global Gold Cobalt 27 Capital 130, 219 EnerDynamic Hybrid Technologies 370 H2O Innovation 14, 448 K-Bro Linen 37, 47, 318, 518 Anadarko Petroleum 87 Index ETF 255 Coca-Cola 129, 243, 414 Enerflex 46, 391 Hamilton Thorne 260 K92 Mining 22, 199, 320 Andeavor 351 BMO S&P/TSX Global Equal Weight Coeur Mining 369, 481 Energean Oil & Gas PLC 306 Hanover Insurance Group 175 Kansas City Southern Railway 19, 217, 394 Andeavor Logistics 62 Global Base Metals Hedged-to-CAD Cogeco 345 Energen 238 Hardwoods Distribution 52, 166, 367, 522 Kellogg 237, 501 Andrew Peller 47, 58, 277 Index ETF 35 Cogeco Communications 60, 498 Energold Drilling 241 Harley-Davidson 325 Kelt Exploration 256, 406 Anglo American PLC 243 BMW 35 Cognizant Technology Solutions 218, 351, Energy Transfer Equity LP 415 Harris 319 Keurig Dr. Pepper 349 AngloGold Ashanti 42 BNK Petroleum 345 482 Energy Transfer Partners LP 18, 370, 415 Harvest One Cannabis 33 KeyCorp 85 Anheuser-Busch InBev NV 63 Boardwalk REIT 182, 258 Colfax 393 Enerplus 80, 114, 235, 378, 510 Hasbro 149 Keyera 38, 128, 277 Anthem 151 Boeing 105, 319 Colliers International Group 229, 521 Ensign Energy Services 13 Hecla Mining 349 Killam Apartment REIT 314, 446 APA Group 283 Bombardier 37, 38, 189, 253, 319, 323, Comcast 18, 218, 283, 327, 417, 459, 482 Entergy 218 Heroux-Devtek 96, 520 Kinaxis 43, 523 Aphria 18, 59, 208, 286, 309, 480 422, 502 Comerica 195, 239 Enterprise Products Partners LP 18, 131, 415 Hi-Crush Partners LP 369 Kinder Morgan 150, 219, 283 Apple 17, 41, 86, 195, 218, 219, 237, 243, Bonavista Energy 387 Command Security 238, 439 EnWave 78, 412 High Liner Foods 123, 215, 391, 417, Kinder Morgan Canada 80, 155, 219, 263, 267, 285, 329, 374, 399, 458 Bonterra Energy 32, 164, 494 Commerce Resources 353 EQT 42 449, 520 277, 409 Applied Materials 415 Booking Holdings 42 Commercial Metals 218, 305 EQT GP Holdings LP 42 Hiku Brands Co. 142, 303 Kinross Gold 188, 451 Aramark Holdings 85 Boralex 8, 80, 364 Computer Modelling Group 120, 259 EQT MIdstream Partners LP 42 HIVE Blockchain Technologies 103, 243, Kirkland Lake Gold 22, 36, 67, 121, 236, ARC Resources 8, 126, 230, 296 Boston Pizza Royalties Income Fund 490 Cona Resources 142 Equitable Group 192 257, 346, 456 307, 493 Argonaut Gold 67 Boyd Group Income Fund 42, 358 Condor Petroleum 390 Ero Copper 83, 231, 404, 429 HollyFrontier 262, 502 KLA-Tencor 415 Aritzia 346 BP PLC 239, 350 Conifex Timber 258 Eros International PLC 195 Hollysys Automation Technologies 439 Klondex Mines 37, 170 Arizona Mining 192, 282, 307 Brick Brewing Co. 14, 33, 208, 272, 411 ConocoPhillips 262, 369 Espial Group 36, 126, 253, 367, 494 Home Capital Group 120 KLX Energy Services Holdings 218 Assure Holdings 415 Broadcom 267 Consolidated Edison 219 Essential Energy Services 368, 496 Home Depot 41, 41, 130, 194 Knight Therapeutics 21, 234, 455 AT&T 42, 42, 218, 327, 371 Broadway Financial Services 131 Constellation Brands 18, 106, 194, 394, 414 ETFMG Alternative Harvest ETF 194, 459 Horizon North Logistics 168, 317, 450, 492 Knight-Swift Transportation Holdings 218, ATAC Resources 285 Brookfield Asset Management 11, 42, 107, Constellation Software 67, 102, 214, 323, 492 Evertz Technolgies 432 Horizons Marijuana Life Sciences Index ETF 326, 483 Athabasca Oil 169, 256, 499 232, 365, 454 Contact Gold 474 Evertz Technologies 37 194, 309 KP Tissue 384 Atico Mining 212 Brookfield Infrastructure Partners LP 301, Continental Gold 307 Excellon Resources 165, 241, 434 HudBay Minerals 408 Kraken Robotics 474 Atlantic Gold 22, 39, 145, 212, 344 395, 527 Cooper Cos. 41 Exchange Income 131, 341, 516 Hudson’s Bay 191, 275 Kroger 18, 19, 325, 437 Atlantic Power 103 Brookfield Renewable Partners LP 94, Corby Spirit and Wine 103, 272, 322, 417 Exco Technologies 102, 167 Humana 525 Atlantica Yield PLC 238 107, 238 Core-Mark Holding Co. 61 EXFO 479 Husky Energy 39, 82, 144, 345, 452 Aurinia Pharmaceuticals 55, 348, 516 BRP 11, 36, 42, 168, 258, 408 Corning 194 Expedia 61 Huya 371 L Brands 193 Aurora Cannabis 12, 18, 98, 106, 211, 286, BSM Technologies 40 Correvio Pharma 389, 477 Express Scripts Holding Co. 151 Hydro One 12, 32, 167, 215, 266, 346, 434 Lam Research 131, 415 309, 360, 414, 441, 451 BSR REIT 490 Cortex Business Solutions 13, 40, 477 Extendicare 174, 389 Hydropothecary 37, 186, 321 Lantronix 439 Auryn Resources 1, 59, 214 BTB REIT 226 Corus Entertainment 76, 174, 184, 276 Exterran 369 Hydrotherapy 414 Laurentian Bank of Canada 13, 36, 287 AutoCanada 390 BTL Group 243 Corvus Gold 101, 257 Exxon Mobil 350, 459 Leagold Mining 59 Autodesk 219, 393 Buckeye Partners LP 131, 415 Cosan 174 Lear 394 AutoHome 19, 263 Costco Wholesale 18, 41, 481 Iamgold 80, 276 Leatt 19, 43, 502 Automatic Data Processing 219 Cott 12 Facebook 42, 195, 350, 370, 417, 485, 501 iAnthus Capital Holdings 14, 405, 419, 443 Leon’s Furniture 12, 364, 520 Automotive Properties REIT 6, 94, 182 Cabot Oil & Gas 237, 387 Coty 393 Fairfax Financial Holdings 102, 340 IBM 42, 283 Leucrotta Exploration 210, 246, 378, 510 AutoZone 17 CAE 121, 296, 516 Crescent Point Energy 54, 208, 434 Falco Resources 303 IHS Markit 193 Liberated Syndication 395 AvalonBay Communities 501 Calfrac Well Services 300 Crew Energy 39, 121 FedEx 41, 107, 305 Ikkuma Resources 32, 273, 392 LightPath Technologies 351 Avante Logixx 254, 428 Calian Group 278, 516 CRH Medical 169, 230, 362 Fibria Celulose SA 150 Imaflex 8, 14, 216, 404 Linamar 453 Aveda Transportation & Energy Services 209 Cameco 307, 344, 439, 450 Crombie REIT 226, 402 Fidelity Overseas Fund 218 Immunovaccine 34, 233 Liquor Stores N.A. 99, 155, 230 Avigilon 101 Canacol Energy 32, 147, 316 Cronos Group 15, 18, 34, 42, 168, 286, Fiera Capital 56, 184 Impact Silver 2 Lite Access Technologies 76 Avista 266 Canada Goose Holdings 298, 519 412, 458 Finning International 80, 252 Imperial Oil 347 Lithium Americas 499 Axion Ventures 232, 272, 320 Canadian Apartment Properties REIT 446 Crown Capital Partners 321 Firan Technology Group 127, 208, 342, 478 IMV 276, 448 Loblaw Cos. 8, 19, 366 Axis Auto Finance 190, 417 Canadian Imperial Bank of Commerce 3, CubeSmart 149 First Capital Realty 348, 516 Imvescor Restaurant Group 37 Lockheed Martin 194 Axon Enterprise 174, 211, 263 13, 107, 154, 276, 283, 287 Cummins 219 First Majestic Silver 54, 246 Indigo Books & Music 96, 155, 302 Lowe’s Cos. 130 INDX2 / February 8, 2019 INVESTOR’S DIGEST Issue 3 / 19

LRAD 43, 86, 414, 483 Nexus REIT 270 Pro Shares S&P 500 Dividend Sienna Senior Living 8, 12, 174, 368 Valeant Pharmaceuticals International 195, . Rowe Price Group 458 Lululemon Athletica 41, 413 NFI Group 39, 435 Aristrocrats ETF 439 T 221 Signature Bank 217 TAG Oil 146, 316 Lumina Gold 243 NGL Energy Partners LP 351 Probe Metals 15, 320 Valens Groworks 431 Signet Jewelers 43 Tahoe Resources 233, 408 Lundin Gold 243 Nickel PJSC 130 Profound Medical 147 Valeura Energy 36, 99 Silvercorp Metals 67 Taitron Components 263 Lundin Mining 16, 278, 432 Nielsen Holdings PLC 217 ProMetic Life Sciences 189 VanEck Vectors BDC Income ETF 238 SilverCrest Metals 22, 189, 277, 451 TAL Education Group ADR 351 Nighthawk Gold 166 Promis Neurosciences 58 VanEck Vectors Mortgage REIT ETF 238 Singing Machine 63, 526 Tamarack Valley Energy 76, 185, 432 Nike 173, 325, 457 ProntoForms 168, 277 Vanguard Balanced Portfolio ETF 407, 519 SiriusXM 369 Target 18, 327 Macro Enterprises 155, 213, 298, 384, 410 NIO 526 ProShares UltraShort Utilities ETF 63 Vanguard Canadian Aggregate Bond Siyata Mobile 8, 233, 410 Teck Resources 11, 125, 210, 433 Macy’s 307, 327, 502 Noble Energy 306, 307, 439 Prudential Financial 502 Index ETF 110 Skechers USA 175 Tecsys 345, 435 Magellan Midstream Partners LP 41, 42 Nokia 327 Pulse Oil 32, 39 Vanguard Conservative Portfolio ETF 407, Skeena Resources 19 Telefonica SA 327 Magna International 15, 238, 370, 394, 435 Norbord 232 Pulse Seismic 140, 360, 497 519 Sky PLC 218 Telus 128, 150, 362 Mainstreet Equity 35, 363 Noront Resources 297 PulteGroup 371, 502 Vanguard Growth Portfolio ETF 407, 519 Sleep Country Canada Holdings 15, 363 Tencent Holdings 370, 459 Mainstreet Health Investments 6 North American Construction Group 234, 431 Pure Gold Mining 453 Vanguard Health Care ETF 371 SmartCentres REIT 402 Teranga Gold 82 Major Drilling Group International 298 North American Energy Partners 100, 155 Pure Industrial Real Estate Trust 50 Vanguard High Dividend Yield ETF 503 SNC-Lavalin Group 80, 169, 228, 351, Terra Firma Capital 189, 409 MamaMancini’s Holdings 526 North West Co. 169, 296, 434 Pure Multi-Family REIT 182 366, 473 Vanguard International Growth 218 TerraForm Power 107, 238, 327 Vanguard Short-Term Bond Index ETF 414 Mandalay Resources 345 Northern Dynasty Minerals 40, 52 Pure Storage 525 Sociedad Quimica y Minera de Chile 174, 239 Tervita 385 Vanguard Strategic Small-Cap Equity 218 Manhattan Bridge Capital 306 Northland Power 439 Solar Alliance Energy 370 Tesco PLC 459 Vanguard Total Bond Market 459 Manulife Financial 56, 143, 175, 235, 343 Northview Apartment REIT 79, 138 SolGold PLC 243 Maple Leaf Foods 10, 36 Tesla 130, 219, 243, 397, 438, 457, 485 Vanguard U.S. Total Market Index ETF 363 Nouveau Monde Graphite 517 Qualcomm 267 Source Energy Services 275, 474 Marathon Petroleum 18, 351, 483 Quanta Services 371 Teva Pharmaceuticals Industries 107 Vecima Networks 453 Nova Leap Health 11 South32 282 Maricann Group 286 Quantum Minerals 131 Texas Roadhouse 123, 149 Vectren 218 Nova LifeStyle 87 Southcross Energy Partners LP 351, 370 Markel 129, 243 Quarterhill 391 TFI International 13, 122, 184 Verizon 343 Nucor 502 Southwest Gas Holdings 527 Marquee Energy 213, 408 NuStar Energy Partners LP 62 Quebecor 238 The BMO Equal Weight Banks Verizon Communications 42, 438 Spark Therapeutics 61 Martin Marietta Materials 371, 503 Nutrien 32, 101, 174, 234, 239, 367, 496 Quest Diagnostics 129 Index ETF 486 Vermilion Energy 12, 81, 135, 187, 214, SPDR Communication Services Select Martinrea International 148 NuVista Energy 3, 97, 120, 135, 158, 202, Questor Technology 77, 188, 277, 360, The Gap 393 430, 510 Sector Fund 417, 527 Mason Graphite 521 334, 431 503, 521 The Hershey Co. 194, 501 VersaBank 143, 279, 404, 526 SPDR Consumer Descretionary Select MasterCard 105, 506 Nvidia 130, 153 Quorum Information Technologies 38 Theratechnologies 21, 57, 96, 144, 316 VersaPay 155, 191, 360 Mattel 195 Sector Fund 417 theScore 37, 79, 187, 322, 472 Vertex Resource Group 523 MAV Beauty Brands 341, 353 SPDR Consumer Discretionary Select Thomson Reuters 35, 406 Vicon Industries 219, 238 Maverix Metals 212, 476 Oasis Petroleum 18, 105 RA Pharmaceuticals 41 Sector Fund 374, 527 Thor Industries 282 Victoria Gold 155, 285, 428 Maxar Technologies 301, 472, 494, 520 ObsEva SA 305 RADA Electronic Industries 43, 175, 306 SPDR Consumer Staples Select Tidewater Midstream and Infrastructure Viemed Healthcare 212, 449 McCoy Global 32, 384 Obsidian Energy 278, 394, 523 Raging River Exploration 26, 114, 297 Sector Fund 3, 373, 431 246, 452 Village Farms International 143, 405 McDonald’s 149 OceanaGold 22, 477 Ralph Lauren 261, 263, 501 SPDR Energy Select Sector ETF 350 Tiffany & Co. 263, 307 Vipshop Holdings 106 Med MedReleaf 286 Omnicom Group 129 Randgold Resources 18 SPDR Energy Select Sector Fund 527 Tiffany and Co. 413 Virgin Money Holdings PLC 218 Mediagrif Interactive Technologies 125, 297 ON Semiconductor 415 Real Matters 12 SPDR Financial Select Sector Fund 527 Tilray 42, 458 Visa 105, 167, 194 Medicure 12, 22, 60, 100, 230, 404 Onex 103 Recipe Unlimited 387 SPDR Health Care Select Sector Fund 527 Timbercreek Financial 476 Vista Outdoor 174 MedMen Enterprises 443 Open Text 67, 279, 433 RediShred Capital 186, 299, 385, 472 SPDR Materials Select Sector Fund 527 Time Warner 218 Vistra Energy 262 MedReleaf 236, 316 Orca Gold 276 Redline Communications Group 521 SPDR S&P 500 ETF 110, 350 Titanium Transportation Group 256, 367, 496 Vivendi SA 174 Medtronic 261 Orezone Gold 479 Reliq Health Technologies 323, 492 SPDR S&P 500 ETF Trust 502 TiVo 526 VIVO Cannabis 11, 406 MEG Energy 125, 257, 476 Organigram Holdings 34, 38, 141, 286 Repro Med Systems 306, 439 SPDR S&P Bank ETF 374 TMX Group 36, 100 Vornado Realty 173 Mercer International 39, 256, 481 Orla Mining 407 Resolute Forest Products 32, 33, 347, 500 SPDR S&P Insurance ETF 374 Toachi Mining 219 Vuzix 65 Methanex 13, 52, 255, 432 Osisko Mining 57, 171, 344 Restaurant Brands International 123, 124, SPDR Technology Select Sector ETF 65, 485 TORC Oil & Gas 145 Metro 23, 219, 386 Otis Gold 155, 364 215, 475 SPDR Technology Select Sector Fund Torex Gold Resources 306 MGX Minerals 89 Overstock.com 195 Revival Gold 276, 433 374, 417, 431 Toromont Industries 342 Wajax 216 Michael Kors 437 Rice Midstream Partners LP 42 SPDR Utilities Select Sector Fund 373 Toronto-Dominion Bank 15, 19, 124, 257, Walgreens Boots Alliance 18, 42 Micron Technology 173, 415 Rifco 14, 404 Spectra Energy Partners LP 131, 150, 439 276, 287, 327, 415 Walmart 18, 261, 457 Walt Disney 369, 417 Microsoft 41, 193, 194, 374, 394, 459, 485 Packaging Corp. of America 194 Rio2 321 Spin Master 171, 195, 495 Total Energy Services 386 Waste Connections 140, 232, 492 Midas Gold 37 Painted Pony Energy 141 RioCan REIT 94 Spirit Airlines 525 Touchstone Exploration 54 WEC Energy Group 194 Mimecast 61 Pan American Silver 10, 198, 241, 522 Ritchie Bros Auctioneers 369 Splunk 17, 261 Touquoise Hill Resources 497 WeedMD 83, 373, 409 Mitel Networks 235 Pan Orient Energy 252 Riverview Bancorp 350 Tourmaline Oil 2, 120 Sprott 87 WELL Health Technologies 11 Mogo Finance Technology 11, 52, 184 Paramount Resources 56, 259 ROBO Global Robotics and Automation Toyota Motor 219, 501 Square 263 Wendy’s 437 Molina Healthcare 175 ParcelPal Technology 89 Index ETF 19 TransAlta 35 SRG Graphite 319 Wesdome Gold Mines 22, 144, 172, 241, Molson Coors Brewing 129, 414 Parex Resources 101, 233, 307, 344 Rocky Mountain Dealerships 55, 58, 279 TransAlta Renewables 35 SSR Mining 22, 67, 81, 188, 241, 301, 476 296, 428, 477 Mondelez International 3 Park Lawn 38, 47, 191, 317 Rogers Communications 42, 82, 150, Transat A.T. 101 Stantec 101, 146, 213, 365, 496 West Fraser Timber 122, 340, 475 Morgan Chase & Co. 459 Parkland Fuel 19, 415, 451 346, 351 Transat AT 37, 167, 322, 432 Starbucks 305 West Fraser Timber Co. 497 Morgan Stanley 307 Parsley Energy 106 Rogers Sugar 8, 213, 275 TransCanada 351, 503 Starlight Global Infrastructure Fund 438 Western Energy Services 364 Morneau Shepell 34 Party City Holdco 173 Roots 211, 303, 432 TransCanada Pipelines LP 174, 415 Starlight Investments Capital LP 438 Western Forest Products 123, 296, 520 Mosaic 129 Pason Systems 43, 362, 499 Roxgold 79, 307, 476 Transcontinental 39, 140, 394, 451 Stelco Holdings 9, 135 Western Gas Equity Partners LP 87 Pattern Energy Group 10, 142 Royal Bank of Canada 14, 19, 107, 143, Tree Island Steel 232, 500 Motorola 393 Stella-Jones 83, 164, 273, 411, 493 Western Gas Partners LP 87 Paychex 63 194, 239, 259, 276, 287 TRI Pointe Group 325 Motorola Solutions 105, 155 STEP Energy Services 33, 190, 360, WestJet Airlines 26, 35, 103, 254, 361, 523 Paypal 105 Royal Caribbean Cruises 350 TripAdvisor 61, 223 Mountain Province Diamonds 57, 411 479, 503 Westport Fuel Systems 219 PBF Energy 150 Troilus Gold 81, 320, 477 Movado Group 263 Royal Gold 437 Stingray Digital 77 Wheaton Precious Metals 301 Pembina Pipeline 46, 59, 63, 213, 228, True Leaf Medicine International 89 MTY Food Group 39, 124, 344, 475 Royal Nickel 130 StorageVault Canada 8, 9, 254 Whirlpool 281 275, 415, 439, 454, 503 TVA Group 498 Mullen Group 39, 300 Rubicon Minerals 11, 39, 96 STORE Capital 106, 130 White Gold 285 Pengrowth Energy 234, 321 Twitter 417 Russel Metals 15, 135, 391 Storm Resources 145, 390 Whitecap Resources 26, 114, 260 People 34, 47, 208, 322 Tyson Foods 502 RYB Education Inc. ADR 351 Stornaway Diamond 97 Williams-Sonoma 413 anoXplore 320 Petrobras Brazil ADR 502 N Strad Energy Services 449 Windstream Holdings 238 NAPEC 14, 76 Petroleo Brasileiro SA 482 Winnebago Industries 282 &P Global 194, 458 Stratabound Resources 285 .S. Foods Holding 173 National Bank of Canada 37, 276, 287, 506 Peyto Exploration & Development 2, 79, S U WPT Industrial REIT 79, 138, 446 Stuart Olson 167 U.S. Global Jets ETF 19 Navios Maritime Midstream 326, 387, 394, 496 Saber Management LLC 47 WPX Energy 106 Sturm Ruger & Co. 174 U.S. Gold Corp. 45 Partners LP 370 PFB 148, 342 salesforce.com 17, 413, 457 WSP Global 257, 365 Summit Industrial Income REIT 6, 314 Ubisoft Enertainment SA 174 Nemaska Lithium 319, 455 PG&E 63, 307 Sandstorm Gold 59, 67 Wyndham Worldwide 261 Summit Midstream Partners LP 370 UGE International 370 Neo Lithium 36 Philip Morris International 371 Sangoma Technologies 259, 388, 428 Wynn Resorts 525 Neo Performance Materials 36, 53, 228, 454 Phillips 66 Partners LP 62 Saputo 98, 283 Sun Life Financial 126, 255, 384 Under Armour 223 Netflix 86, 131, 195, 217, 239, 399, 417 Phivida Holdings 374 Savaria 42, 143, 520 Suncor Energy 26, 43, 55, 96, 114, 135, Uni-Select 57, 188, 389 NeuLion 188 Pinnacle Renewable Holdings 141, 300 Saville Resources 353 169, 303, 334, 466, 503 United Continental Holdings 502 SunEdison 107 Xebec Adsorption 10 Nevada Gold & Casinos 439, 527 Pioneer Natural Resources 87 SCANA 42, 151, 307 United Natural Foods 41 Xerox 86, 327 Sunniva 345 Nevsun Resources 409 Planet 13 Holdings 12, 429, 442 Scandium International Mining 282 United Technologies 43 XPO Logistics 237 New Flyer Industries 189, 252 Point Loma Resources 13, 32, 296 Scotia Canadian Dividend Fund 194 Sunoco LP 370, 415 United Therapeutics 193 New Gold 96, 341 Pollard Banknote 47, 55, 253, 448 SeaChange International 503 SunPower 437 UnitedHealth Group 175 New Jersey Mining 177 Power Americas Minerals 329 Sears Holdings 218 Superior Gold 16, 155, 187, 241, 276 Uniti Group 238 Yamana Gold 57, 233, 365 New Look Vision Group 521 Power Corporation of Canada 238 Second Sight Medical Products 63 Superior Plus 54, 351 Universal Electronics 526 Yangarra Resources 78, 120, 252, 307, New Oriental Education & Technology PPG Industries 63 Secure Energy Services 435 SuperValu 349 Urbana 111 429 Group 351 Prairie Provident Resources 8, 191, 273, Sempra Energy 174, 283, 327 Supreme Cannabis Co. 101, 272, 286 US Auto Parts Network 283 Yum! Brands 501 Newcrest Mining 243 411, 477 Seven Generations Energy 202 Supremex 232, 473 US Steel 281 Newell Brands 35 PrairieSky Royalty 140 Shares Commodities Select Surge Energy 171, 364, 497 USA Compression Partners 415 Newmont Mining 41 PrairiSky Royalty 492 Strategy ETF 42 Suzano Papel e Celulose SA 150 USA Compression Partners LP 370 ZCL Composites 35, 389 Nexa Resources SA 321, 450 Premier Gold Mines 67 Shaw Communications 316 Sylogist 371, 494 Utilities Select SPDR 43 Zillow Group 263 NexGen Energy 38, 307 Premium Brands Holdings 186, 524 ShawCor 144, 456 Symbility Solutions 38, 208, 407 Zimtu Capital 89 NexJ Systems 40 Pretium Resources 84, 318 Shire Pharma PLC 63 Synchrony Financial 414 ZTO Express 307 NextEra Energy 63, 86 Primo Water 525 Shopify 36, 67, 123, 229, 389, 499 Synopsis 219 Vale SA 130, 174 Zymeworks 409 Use the Investor’s Digest index and adviceforinvestors.com to discover Canada’s best investment advice in 3 easy steps

he Investor’s Digest index is a vital resource index. Beside each company name are YOUR GUIDE TO PAGE NUMBERS Tfor readers who want to track advice on the page numbers of the articles in companies from past issues. which the company has been Issue Date Pages Issue Date Pages For serious investors, nothing could be discussed in Investor’s Digest. Feb. 9, 2018 45-64 Aug. 10, 2018 309-328 better than a vast research library filled with back 2. Match the page numbers with specific Feb. 23, 2018 65-88 Aug. 24, 2018 329-352 issues of Investor’s Digest. Especially when it takes issues using the guide (right). For March 9, 2018 89-108 Sept. 7, 2018 353-372 up no storage space at all. example, a key article on Caterpillar March 23, 2018 109-132 Sept. 21, 2018 373-396 That’s exactly what subscribers to Investor’s ran on page 450 – the guide lets you April 6, 2018 133-152 Oct. 5, 2018 397-416 Digest of Canada and adviceforinvestors.com get. know this is the August 3 issue. April 27, 2018 153-176 Oct. 19, 2018 417-440 Back issues of the Digest are on our website, 3. Go to adviceforinvestors.com, click on adviceforinvestors.com. the section titled “Publications” and May 11, 2018 177-196 Nov. 2, 2018 441-460 Using the Investor’s Digest index, you can download all the issues you need. It’s May 25, 2018 197-220 Nov. 23, 2018 461-484 quickly put your finger on advice and that easy. June 8, 2018 221-240 Dec. 7, 2018 485-504 information on a company you’re following, If you don’t currently subscribe to June 22, 2018 241-264 Dec. 21, 2018 505-528 whether it appeared in a brokerage report, article, adviceforinvestors.com, simply go to July 6, 2018 265-284 Jan. 4, 2019 1-20 column or in “What the Market Letters Say.” www.adviceforinvestors.com to learn more about July 20, 2018 285-308 Jan. 25 21-44 Here’s what you do: the website. Once there, you can easily select a 1. Select the company you want from the subscription plan that’s right for you. Use the chart above to match a page number with a specific issue of Investor’s Digest. Then go to adviceforinvestors.com and download the issue. It’s that simple.