Industrial Alliance 2021 Top Picks Equity analysts at Industrial Alliance Securities unveiled their “Top Picks” for 2021 in a research note released Wednesday.
The list of 18 Canadian equities were chosen from the 124 names in the firm’s coverage universe and are meant to be the best ideas by sector.
While the research firm didn’t provide performance data on its 2020 top picks, it highlighted some accomplishments by its equity team last year: “Despite the struggles of the last year, iA’s Research Group did enjoy a few bright spots,” said Head of Research Niel Linsdell. “The team continued to be recognized for its stock picks and analysis. In the Canadian StarMine Analyst Awards, Elias Foscolos was ranked the #1 Stock Picker in the Oil, Gas & Consumable Fuels segment, as well as the #2 Top Stock Picker in Energy Equipment & Services. This is Elias’ third consecutive year in being recognized by StarMine. In September, we welcomed Frederic Blondeau to our Research Team. Fred was also recognized by Starmine in 2020 as the #1 Stock Picker in Equity Real Estate Investment Trusts (REITs).”
The firm’s selections are:
Oil and Gas Exploration and Production
Tourmaline Oil Corp.,( “strong buy” rating and $28 target)
Analyst Michael Charlton: “Early this year and in response to crumbling prices, Tourmaline’s management stated it would carefully monitor the supply/demand balance in conjunction with commodity prices and adjust its capital and production mix accordingly. One must ‘trust the plan’ because management at Tourmaline has seen a commodity price cycle or two in the past, and lived to prosper. At this time, the Company looks to have extremely low production costs of $9.11 per boe or $1.52 per mcfe, margins should be strong at current prices, and the outlook for higher prices can only enhance Tourmaline’s profitability. The Company’s 78-per-cent gas weighting will capture natural gas price appreciation and its significant liquids production will capture the positive outlook for rising oil prices. The Company’s $1.1-billion 2021 capital program looks to be fully funded by our $1.9-billion cash flow forecast at current prices, which we believe to be the required flexibility and provides the significant level of safety investors are presently seeking. Add in the recent dividend increase, guidance increase, and significant free cash flow on the horizon at strip pricing and we can see significant upside potential in this well-managed company with hedges in place protecting the downside. Tourmaline is pushing forward according to its plan and looks to have significant operational momentum heading into 2021 with strong production and an acquisition appetite. Tourmaline is offering free cash flow, even at strip prices, and a stable dividend yielding 3.1 per cent at today’s share price.”