Author: David Pett

A better U.S. economy means a rising U.S. dollar and better equity markets, but the very rise in the greenback has historically spelled trouble for commodity prices. Even so, Stephane Marion, chief economist and strategist at National Bank Financial, is sticking to his guns, maintaining a preference for cyclicals.

"With recovery just beginning and policy still accommodative, a rise of the greenback does not exclude commodity price stability or even gains," he said in note to clients.

"Also, valuations of base metal stocks are still based on a fairly conservative commodity price deck for 2010."

Mr. Marion reiterated his TSX target of 12,700 by the end of this year. His S&P 500 forecast is 1,280.

David Pett

Canada's domestic banks have always hankered for a more global presence even though their domestic operations tend to yield the biggest profits.

That's the lesson that might be taken from Bank of Montreal's disclosure today that it has credit exposure to some of the most dodgy European
countries including Greece, Portugal and Ireland.

In a note in its first quarter results, BMO shed little light on the nature of the exposure to the so-called PIIGS countries, saying only that it is related to governments and financial institutions and that the potential losses are "considered manageable."

The disclosure comes the same day that the prime minister of Greece warned his country could go bankrupt unless the country acts aggressively to pay
down its debt.

John Greenwood

The big banks in the United States are growing bigger at a pace that few people realize. Simon Johnson, the MIT economist, estimates that the six biggest banks in the United States had combined assets equal to 17% of GDP in 1995. These days that number has expanded to 63% of GDP.

Despite what you may think, the financial crisis has actually helped this growth. At the end of 2007, according to Rolfe Winkler of Reuters, the Big Four banks—Citigroup, JPMorgan Chase, Bank of America and Wells Fargo—held 32% of deposits. By the middle of 2009, the figure had swelled to 39%.

So is this a bad thing? While many U.S. commentators worry that the expansion of the big banks will inevitably lead to giant financial institutions exerting control over the political system to get whatever they want, it’s not clear that will be the case.

In Canada, the Big Five banks enjoy an even more dominant market share than the Big Six in the United States, but the government has not caved in to them. In the late ‘90s, Ottawa rejected the banks’ attempts to merge. More recently, it has been zealous about forcing them to raise capital levels.

Is this some peculiarly Canadian turn of events? Maybe not. Think about the competitive logic of a country with a financial marketplace dominated by several lookalike big banks.

So long as those banks are similar in size and similar in scope, no single bank will be able to outbid the others for government favors. And while all the banks may prod the central government for policies that are good for banks in general, each of the banks will realize that it has no particular competitive advantage that will enable it to capitalize on that policy to a greater degree than its rivals. So the banks will be more likely to press for stability than anything else, since they will be as likely to lose market share from a change in regulations as to gain from it.

All of this leads to a surprising conclusion: maybe the United States should encourage its biggest banks to get even bigger.

Freelance business journalist Ian McGugan blogs for the Financial Post.

Canadian bank stocks continue to move higher on better than consensus fiscal first quarter earnings and anticipation of other banks beating estimates. Bank of Montreal was the trigger today with earnings of $1.13 versus consensus of $1.03. Two more Canadian bank stocks broke resistance this morning, Commerce Bank and National Bank.

The TSX Financial Services Index has a history of outperforming the TSX Composite from the end of February to the end of May. During the past 10 periods, the TSX Financial Services Index has gained 5.46% per period (plus dividends) versus a gain of 5.09% per period for the TSX Composite Index.

On the charts, the TSX Financial Services Index broke above resistance at 177.76 this morning and is testing its September 2009 high at 181.93. Current intermediate upside potential on a move above 181.93 is to 203.

Technical action by S&P 500 stocks remains positive. Another eight S&P 500 stocks broke resistance this morning including Akamai, Allstate, Colgate, DirectTV, DaVita, Patterson Dental, Public Storage and Sigma Aldrich. No S&P 500 stocks broke support.

Comments offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. An attempt to provide accurate data has been made, but accuracy is not guaranteed.

Don Vialoux is a research analyst for JovInvestment Management Inc. All of the views expressed herein are the personal views of the author and are not necessarily the views of JovInvestment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by JovInvestment Management Inc

More comments are available at www.timingthemarket.ca

Current valuations of the two most heavily-weighted BRIC nations favour China over Brazil, says Patrick Gautier, portfolio manager of the HSBC BRIC Equity Fund. which returned 59% year-over-year in 2009.  

"Short term, there
is a discrepancy between the two markets," said Mr. Gautier during a recent phone interview. "We find
the Brazilian market too expensive. In 2009, it grew by 120% in U.S.
dollar terms, compared to the Chinese market that grew only 70%."

39% of Mr. Gautier's current fund holdings are in China compared with a 33% weighting in Brazil. By comparison, the benchmark MSCI BRIC index is weighted 37% to China and 35% to Brazil.

He is also slightly overweight Russia, with a 14% stake versus 13% for the benchmark, and slightly underweight India, with a stake of 14% versus 15%.

The Russian market, which was trading at 8x earnings at the end of 2009 versus 14x for the other three BRIC nations, is even cheaper than it normally is on a relative basis, Mr. Gautier said.

"The Russian market is riskier
than other markets, but because it is more volatile, opportunities may
occur more often over the short term," he said. 

"Buying and selling Russian
equities may allow for investors to get more alpha over the long term."

David Pett

Down 6% since reporting disappointing earnings last week, Transalta Corp. shares have been punished enough, says Odlum Brown's Cory O'Krainetz. 

"TransAlta appears to be taking baby steps rather than a giant leap forward after a very challenging year." the analyst said.

"However, we remain confident that the company is moving in the right direction and earnings will grow as market conditions improve and plant availability increases."

Mr. O'Krainetz called the sell off a buying opportunity and left his $27 unchanged. He expects better power demand and stronger natural gas prices over the next year to improve TransAlta's earnings. At the same its Canadian Hydro acquisition improves the long term growth profile of the company.

Transalta's dividend, which currently yields 5.2%, will likely be maintained until market conditions improve, he added.

"This will allow cash to be used to strengthen the balance sheet and support attractive growth opportunities within its development portfolio. Over the long term, dividends will likely be increased as earnings grow." 

David Pett

Last week saw CIBC and National Bank of Canada report positive first quarter surprises. As a reward, shares in both banks rose more than 4%. 

With the country's remaining four big banks due up this week, Michael Goldberg, Desjardins Securities analyst, said investors might want to brace for more bad than good news.

"The positive market reaction to lower-than-expected loan losses at CIBC and National Bank en route to higher-than expected earnings demonstrates the advantage of maintaining a surplus allowance," said Mr. Goldberg in a note to clients.

"For the banks still to report, that advantage goes to TD, with BMO, Bank of Nova Scotia and Royal Bank less likely to report positive surprises." 

One of the pre-conditions for reporting lower-than-expected loan losses is solid credit quality, Mr. Goldberg explained. While all Canadian banks have managed their credit quality well, not all are equal when it comes to moderating loan losses as new loans become impaired.

The key, he said, is each bank's surplus allowances. In the case of CIBC and National Bank, they entered the first quarter of fiscal 2010 with surpluses of $132-million and $233-million, respectively.

TD Bank is the only other bank with surplus allowances at $57-million. Royal Bank has gross NPLs in excess of allowances for losses of $1.4-billion. Bank of Nova Scotia is saddled with net NPLS of $1.1-billion and Bank of Montreal has net NPLs of $2.3-billion.

"Consequently, it has been our view that these banks, particularly Royal Bank, have less capacity to report provisions below their NPL formations as the credit cycle continues without increasing their net NPLs further, thereby increasing their potential for higher loan losses in the future," he said.

David Pett

A slight majority of Canadian small and mid-cap money managers earned their keep in 2009. Their large-cap peers weren't so successful, however.

52% of active funds in the Canadian small/mid cap equity category outperformed the S&P/TSX smallcap index last year, according to the latest data from Standard & Poors. 

By comparison, only 39.2% of Canadian equity active funds beat the S&P/TSX Composite Index in 2009.

Almost 52% of International Equity funds outperformed the S&P EPAC LargeMidCap Index, and only 39.7% of U.S. Equity funds beat the S&P 500 in 2009.

Now that markets have turned sideways after last year's impressive rally off the bottom, many strategists predict actively-managed portfolios will outpace passive ones in 2010.

David Pett 

Last week, U.S. Federal Reserve chairman Ben Bernanke delivered few surprises at his regular testimony in front of U.S. Congress, reassuring markets that the Fed would keep the funds target rate low for “an extended period.”

"In general, the tone was dovish, and triggered a ten point rally in the S&P 500," said Christopher Probyn, chief economist, State Street Global Advisors.

On Tuesday, Bank of Canada governor Mark Carney will get his turn to assuage investors when he releases the updated interest rate for overnight lending.

Like south of the border, don't expect any surprises, even despite Monday's impressive GDP figures that saw Canada's economy grow 5% in the fourth quarter of 2009.

"Though it raises the probability of advancing a tightening in policy, there will likely need to be additional indications of this economic strength being sustained in 2010 before the central bank abandons its conditional commitment of maintaining the overnight rate at its current 0.25% through the end of the second quarter," said Paul Ferley, assistant chief economist, RBC Economics.

"Our forecast assumes that the overnight rate will not start to rise until the second half of this year finishing 2010 up 100 basis points at 1.25%."

Stewart Hall, economist, HSBC Securities (Canada), agreed that the BofC should be in no rush to raise rates.

"The economy is transitioning. Transitioning well in some cases but suffice to say, a good slug of growth remains reliant upon the consumer and government spending
(of which the two account for 3.6ppt of the overall 5.0ppt of growth)," he said.

In addition to Canada, the Bank of England and European Central Bank are also expected to the maintain their policy rates this week, while the Reserve Bank of Australia is forecast to hike their rate by 25 basis points.

David Pett 

Apple Inc.’s new war on sexy iPhone apps raises some interesting legal issues. By asserting that it is the arbiter of what is acceptable content in an iPhone app, it would seem to be implicitly taking on responsibility for all app-related content.
 
That could leave the company open to lawsuits from people who suffer losses from inaccurate or missing information on an iPhone app. It could also leave Apple exposed to charges that it’s promoting violence through savage and increasingly realistic video games.

Most telecom companies long ago decided that they wanted no part of policing the content that travels over their networks, because of the endless legal headaches it would cause. (Imagine if the phone company were responsible for every lewd suggestion or racist comment that travelled over its wires.) Telecom firms take the position that they are merely a carrier of content, not an arbiter of it.

Apple seems to be following a different path. As reported in the Financial Post, the company has purged about 5,000 applications featuring sexually suggestive material from its App Store within the past few weeks. Apple has defended the move by saying it was reacting to complaints from users.

Perhaps so but Apple appears to have been arbitrary in deciding which apps it will allow in its online store and which it won’t. Some sexy apps, including one for Sports Illustrated’s swimsuit issue and another from Playboy, are still available for download. But Apple is turning thumbs down on sexy apps from other major publishers, such as Bild, the German tabloid, which wanted to market an app that would allow users to undress the tabloid’s girl of the day by shaking their phones. By asserting its right to block apps it considers offensive, Apple is implicitly endorsing what remains. And that could lead to some intriguing court cases in months to come.

Freelance business journalist Ian McGugan blogs for the Financial Post.

The U.S. January Consumer Spending report released this morning confirmed that U.S. consumers continue to spend money. Spending rose another 0.3% versus an increase of 0.2% in December. Consumer Discretionary SPDRs (NYSE:XLY) – $30.79, that track the S&P Consumer Discretionary Index, are responding by breaking above resistance to reach a 17 month high. Current intermediate upside technical potential is $33.10.

According to Thackray’s 2010 Investor’s guide, seasonal influences for the sector are positive until April 23rd.
Stocks in the sector that broke above resistance this morning included Black & Decker (NYSE:BDK) – $74.01 and Stanley Works (SWK – $58.14)

Bank of Montreal (TSE:BMO) – $56.24 touched a two year high this morning in anticipation of its first quarter earnings report to be released tomorrow. Consensus is $1.03 versus $1.07 per share last year. Better than expected first quarter earnings reports released last week by Commerce Bank and National Bank were greeted favourably by the market and investors are guessing that other major Canadian banks also will beat consensus. Seasonal influences for the sector are positive between the end of February and the end of May.

Other S&P 500 stocks breaking resistance this morning included Agilent (A), Cardinal Health (CAH), Eaton (ETN), Hospira (HSP), ITT Industries (ITT), Mead Johnson (MJN), Rowan Companies (RDC), Verisign (VRSN and Xerox (XRX).
No S&P 500 stocks broke intermediate support levels.

Comments offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. An attempt to provide accurate data has been made, but accuracy is not guaranteed.

Don Vialoux is a research analyst for JovInvestment Management Inc. All of the views expressed herein are the personal views of the author and are not necessarily the views of JovInvestment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by JovInvestment Management Inc

Don Vialoux, chartered market technician, is the author of a free
daily report on equity markets, sectors, commodities, equities and
Exchange-Traded Funds. For more visit Don Vialoux's Web site

When it comes to price/earnings ratios, the TSX may not be that attractive compared to other major markets. As for that other valuation metric, price-to-book value versus  return of equity, it stacks up quite nicely, says George Vasic, UBS strategist. 

"One key conclusion that emerges is that while the TSX’s forward P/E looks expensive relative to other major markets," said Mr. Vasic, noting Canada's top benchmark exchange trades at 13.8x vs. 12.7x for the US and 12.1x globally for the non-financials.

"More comprehensive valuation measures show it to be closer to in line. Indeed, the TSX’s P/BV is very close to the global relationship to ROE, with the US notably above the UK below."

He added that P/Es show a range of 9.1x to 18.7x for the seven major global region, while the P/BV vs. ROE is a more tightly clustered measure. As a result the latere valuation metric is much more robust.

"Indeed, it explains why we have advocated what has been seen as a lofty target of 13,500, which in fact represents fair value (in 12 months) based on the TSX’s own relationship among these variables over the long term," the strategist said.

David Pett

U.S. equity index futures are lower this morning. S&P 500 futures are down 10 points in pre-opening trade. Index futures are responding to growing concerns about the security of Greek debt. Standard and Poor’s and Moody’s placed their debt rating on Greek debt on a Watch list with negative implications.

Concerns about Greek debt quickly placed downside pressure on the Euro and upside pressure on the U.S. Dollar. Strength in the U.S. Dollar triggered weakness in commodities priced in U.S. Dollars including crude oil, copper, gold and silver.

Index futures weakened further following release of economic news at 8:30 AM EST. Weekly jobless claims rose another 22,000 to 496,000 mainly due to stormier than average weather in the U.S. Midwest and Easter U.S. states.

Partially offsetting was a better than expected January Durable Goods Orders report. Consensus was an increase of 1.5% versus a 0.3% increase in December. Actual was an increase of 3.0%. Excluding transportation, Durable Goods Orders slipped 0.6%.

Traders will watch once again for an update on monetary policy to be presented today to the Senate Finance Committee by Federal Reserve Chairman Ben Bernanke. The focus today is on regulatory reform.

Coca Cola Enterprises rose 5% after Coca Cola announced plans to purchase Coca Cola Enterprise’s North American operations.

Several companies reported higher than expected fourth quarter earnings overnight including Biovail, Limited, Canadian Imperial Bank of Commerce, Cameco and Tim Hortons. Tim Hortons also raised its dividend and announced a $200 million share repurchase program.

Bombardier received an order for 40 C Series aircraft from Republic Airways. Republic also has options to purchase another 40 aircraft. Potential value of the deal for the 80 aircraft is $6.34 billion. ‘Tis the season for Bombardier to move higher from early March to mid- July!

Don Vialoux, chartered market technician, is the author of a free
daily report on equity markets, sectors, commodities, equities and
Exchange-Traded Funds. For more visit Don Vialoux's Web site

With gold prices expected to stay range bound in 2010, the performance of gold stocks will depend on the transition of junior miners into something more, says Michael Curran, RBC Capital Markets analyst.

"With reduced volatility expectations, we look to re-rating opportunities as our favoured investment strategy for this year (versus other strategies such as value, momentum, leverage, financial turnaround, takeover targets etc.)," he said, maintaining his forecast for gold to trade between US$1,000 and US$1,250 per ounce.

"This strategy arguably is best reflected in the smaller cap space, as several companies look to successfully move projects ahead to construction and/or production during the next 12 months."    

Mr. Curran breaks down the re-rating opportunities into three categories: small producers with growing production; exploration companies looking to become new producers; and exploration companies advancing projects to development.

In the first category, the analyst likes companies that are going to advance projects that can move production from less than 250,000 ounces a year to a range between 250,000 and 1 million ounces a year.

Historically, this jump from Tier III to Tier II production results in higher trading multiples and better valuation, he said, adding Jaguar Mining Inc., Alamos Gold Inc. and Great Basin Gold Ltd. are all good candidates to make the jump this year.

As for the explorers ready to become producers, Mr. Curran's favourite bet is Anatolia Minerals Development Ltd.. He picked Detour Gold Inc. as his favoured candidate to gain value as it advances it Detour Lake project from feasibility to construction this year.

David Pett   

Hedge funds  played a key role in the success of small and mid-cap stocks in 2009.  But the shine may be wearing off, says new research from Citigroup Capital Markets.   

"While hedge fund ownership stakes for small and mid have essentially been flat since 4Q08, they have been inching up in large," said Lori Calvasina, Citigroup's small and mid-cap equity strategist, in a note to clients. 

"In other words, the gap in hedge fund ownership levels between small and mid relative to large has been shrinking."

Based on her research, hedge funds held a long position stake in the average small cap stock of 6.4% in the fourth quarter of 2009. The stake in the average mid cap stock was 5.8% and 2.8% for the average large cap stock.

"We found that in 2009 there were three sectors that saw a pick up in average hedge fund ownership stakes within large cap, but a decline or flattening out of
hedge fund ownership stakes in small and mid.

"These were Consumer Discretionary, Health Care, Technology, which collectively account for about 46% of the market cap weight in the Russell 2000, 37% of the market cap weight in the Russell Mid Cap index, and 44% of the market cap weight in the Russell Top 200,"

For the financials sector, average hedge fund ownership stakes rose in all three market capitalization levels, with large cap stakes hitting their highest level since the first quarter of 2005.

Meanwhile, the average hedge ownership levels were flat in 2009 for large cap Materials, and fell for small and mid cap Materials. Ownership stakes in energy stocks were unchanged across the market cap spectrum.

Ms. Calvasina said the shift in market cap preferences by hedge funds reflects the next stage in the recovery trade.

She expects less volatility for small and mid cap stocks and more volatility for large caps over the coming months. At the same time, she is worried that hedge funds, now less interested in smaller cap stocks, will have an overall negative implication for the small cap segment of the equity market. 

"The implications for mid caps are less clear to us, and we wonder if bigger mid caps (which tend to drive the performance of the mid cap performance indices which are market cap weighted) may ultimately benefit from the shift away from smaller names," she wrote.

David Pett

Finning International Inc. shares are down almost 3% Wednesday, after the company released disappointing fourth quarter earnings.  

Benoit Poirier, analyst, Desjardins Securities, maintained his Buy rating and $19 price target, but told clients he was underwhelmed by the company's margin weakness in the quarter, particularly in Canada where EBIT margins came in at 1.8% compared to his estimate of 5.1%. This despite the fact Finning's revenues on this side of the border beat his expectations.

The analyst also expressed concerns over Finning's troubled U.K.-based rental subsidiary Hewden.  The company is still considering whether to sell the division and will announce its decision by the end of the
second quarter.

"The future of Hewden is still unresolved and two options remain on the table. One is to keep Hewden and restructure its operations. The second (our preferred option) would be to divest of Hewden," Mr. Poirier said.

David Pett

ISE Ltd.'s debut on the Toronto Stock Exchange Monday marks the first cleantech initial public offering on Canada's main exchange since July 2009.

With shares down 4% from its opening price of $6, it's been a slow start for the manufacturer and distributor of heavy duty hybrid-electric drive systems. But following on the heels of two recent high profile postponements in the cleantech IPO market south of the border, it could be a lot worse.  

"ISE is an excellent example of a U.S.-based company that has successfully accessed the capital it needs on Toronto Stock Exchange," said Kevan Cowan, president TSX Markets and Group Head of Equities. "We are very proud to have the company on our market."

Earlier this year, China-based JinkoSolar postponed efforts to go public in the U.S., while Daqo New Energy, a Chinese polysilicon provider, actually halted its IPO plans after a cut to its original price range one day before its initial public offering on the New York Stock Exchange, failed to generate the necessary interest.

Both companies blamed their IPO troubles on the still weak financial sector south of the border.

Despite these failures, Dallas Kachan, managing director and executive editor of the Cleantech Group, a defacto industry association for clean technology companies, said the IPO market in North America continues to gain strength after collapsing through the Great Recession.

He noted in an article that 53 domestic and international companies
filed paperwork to hold initial public offerings in the U.S. in Q4
2009, according to the latest data from Ernst & Young.

"That's the highest number of new registrants in a single quarter since
2007. There are more deals waiting to go public in the U.S. than in
more than two years," he wrote

ISE raised $20.7-million through its initial public offering and the company is expected use the proceeds us to expand sales globally and invest further in research and development.

David Pett

Warren Buffett is certainly showing his love for Canada this month.

Fresh from his Monday luncheon in New York with the folks at Salida Capital, a Toronto-based hedge fund that paid $1.68-million through an annual charity auction to break bread with the Oracle of Omaha, the Richard Ivey School of Business has announced that Mr. Buffett will welcome a contingent of MBA and undergraduate students from the London, Ontario -based program to the Berkshire Hathaway headquarters in Omaha, Nebraska later this week.

According the itinerary released by the school, the trip will take place February 26 and include a tour of Nebraska Furniture Mart, one of Berkshire's companies, as well as a question-and-answer session and luncheon with Mr. Buffett.

“This is a once in a lifetime opportunity,” said George Athanassakos, professor of finance, who heads the Ben Graham Centre of Value Investing at Ivey.

“It’s a chance to interact with a financial genius and learn from him.”

David Pett

The latest U.S. earnings season has been another resounding success and the trend should continue throughout 2010, says Vincent Delisle, Scotia Capital Markets strategist. 

"Cautious analysts and bullish CEOs appear to us as the perfect cocktail for elevated "beat ratios" in coming quarters, he said in a note to clients.

First quarter earnings estimates for 2010 have been falling in recent weeks, said Mr. Delisle, with seven of 10 S&P 500 sectors facing negative profit revisions. The three sectors that have been saved from revisions are discretionary, technology and financials. 

The strategist said the lower Q1 earnings expectations likely reflect sovereign debt issues in Europe and monetary tightening in China.

But while analysts are feeling cautious, he noted that company guidance is increasing at the fastest pace since 2006, with positive guidance running ahead of negative forecasts since the second quarter of 2009.

"Rebounding top-line growth and margin expansion in coming quarters should translate in outsized gains for earnings," he wrote.

"Rising U.S. capacity utilization should contribute to further profit margin expansion and, coupled with stronger industrial production, S&P 500 EPS could well surprise on the upside in coming quarters."

80% of S&P 500 members having reported fourth quarter 2009 earnings through last Friday. 73% of companies have beaten earnings expectations and 53% have booked revenue "beats."

In Canada, the numbers are less impressive. With less than one-third of S&P/TSX composite members having reported Q4 earnings, the index has recorded an earnings "beat ratio" of just 53%.

David Pett

First Uranium Corp. has had a rough couple of months, as permit problems at its South African mine have ground construction on a new tailings facility to a halt and seriously compromised its financing.

However, a recent site visit by Bart Jaworski with Raymond James had the analyst wondering if the problems are all First Uranium’s own doing.

“Management credibility – we believe management is still deep in the penalty box,” he wrote in a note to clients Tuesday. “In our opinion, it appears First Uranium is at least partly to blame for its permitting woes.”

It appears that the company had started construction on its new Mineral Waste Solutions tailings deposit facility a month before it received authorization in July 2009, without telling the authorities.

The company defended its actions to Mr. Jaworski, saying the work was “insignificant” and did not warrant a permit withdrawal.

“We speculate the transgressions by First Uranium, in combination with the three relatively high-profile appeals, made the project vulnerable to any political machinations ongoing in the region,” he said.

Other things going on in the region include tussles between international investors, and an upcoming municipal election in April.

Mr. Jaworski also expressed concern that capital costs at the site have ballooned to $450-million from initital estimates of $150-million in December 2006.

“We received elusive answers,” he said.

Explanations included poor initial estimates, longer than expected build times, plant upscaling, and external factors.

“We do not find these explanations satisfactory and we believe investors deserve a more transparent reconciliation,” he said.

However, a visit to the company’s other project at Ezulwini was much more pleasant.

“The mine seems to be on a good trajectory with the worst seemingly behind them,” Mr. Jaworski said.

He maintains a Market Perform rating for First Uranium, but has lowered his price target to $1.50 from $1.80.

Eric Lam