Scotia update Outperform $4.25OUR TAKE: Core earnings in line with consensus and our estimates but quality in question. That said, the ECN story is not about near-term earnings but rather about transformation and laying the ground work for growth and enhanced profitability. On that front, management noted it continues to review five acquisition opportunities and is waiting for the right deal at the right time. In terms of size, we believe ECN is looking for a platform with established funds and $3B in earnings assets. Valuation for ECN remains attractive with the stock trading at a 36% discount to its Q3/16 book value. We believe the current valuation does not price in the transformative potential of the story and reflects a high degree of risk priced in with limited downside risk. Key catalysts are likely to include a sizable acquisition and earnings guidance.