Good morning!

Golden Predator could be prey. That's just one reason the junior explorer is our cover story in the new Capital Ideas Digest.    

The company is also busy drilling a "very exciting" high grade gold mine in Yukon. Smart, successful investors such as Rob McEwen and Eric Sprott own about a third of the shares, and the chairman, whom we interviewed, owns about 15%. Golden Predator shares are already higher by nearly 500% from its early days but they still have considerable upside as the company continues to prove out its mine, and attract the interest of bigger players, who are eyeing its abundant resource. 

The Digest also features some deep insight from a financial advisor on one of our biggest-ever winners - Tree Island Steel, up as much as 550% since our mention in 2013. He details three ways the company's CEO is shrewdly beating competitors on cost. 

Also look for research in the new Digest on Facebook, Theratechnologies, Hydropothecary and Mogo Finance Technology. capitalideasresearch.com

Get an edge in a competitive market by accessing the Digest immediately by Upgrading now to our premium service for just $9.99 a month. 


See my recent Bloomberg TV Canada interviews here. capitalideasresearch.com/interviews/. Capital Ideas Research will be bringing you a lot more video interviews soon. Watch this space for details! 

Morning Need to Know by Capital Ideas Research
Getting you ready for your investing day

April 25, 2017 

Written and compiled by Mark Bunting, Publisher, Capital Ideas Research

MARKETS

Global stocks are back at an all-time high as the relief rally triggered by France's first round presidential election result continues. The MSCI All-Country World Index, a basket of global stocks, is at record levels. 

Stocks in Japan and Hong Kong led a rally in Asia, jumping more than 1%. China equities climbed from a three-month low on speculation that a selloff over concerns of a regulatory crackdown were overdone.

U.S. stock index futures were trading higher supported by stronger earnings results from the likes of Caterpillar, and by speculation about U.S. President Donald Trump's promise to announce on Wednesday "a big tax reform and tax reduction". Although we've heard that kind of bluster before, and there's no guarantee his plan will get through Congress as Trump passes his 100th day in office with few results to match his campaign promises.  

The iShares MSCI Canada ETF is higher by nearly 1% in pre-market trading. 

CURRENCIES

The euro rose 0.2% to $1.0893 after touching the highest level in five months yesterday.

The U.S. dollar index added 0.2%, after slipping 0.5% Monday.

The Canadian dollar dropped 0.6% to $0.7358 U.S. as Trump intensified a trade dispute with Canada, slapping tariffs of up to 24% on imported softwood lumber.

BONDS

U.S. bonds headed for a fifth day of declines, with yields on 10-year Treasuries climbing three basis points to 2.305.

COMMODITIES

Gold lost nearly $10 an ounce to $1,267.60, slipping for a second day.

Oil held steady after six days of losses to $49.15, before U.S. government data that’s forecast to show crude stockpiles fell for a third week.

STOCKS THAT MAY MOVE 

Great-West Life (GWO-T) The insurance company is cutting 1,500 jobs or 13% of its workforce over the next two years, which will result in a charge of $215 million (Canadian) in the second quarter of this year. The company hopes to see annual pre-tax savings of $200 million by 2019. 

Canadian National Railway Co (CNR-T) reported an 8% increase in quarterly revenue as the railroad moved record volumes, boosted by grain, frac sand and coal.

Canada's Teck Resources Ltd (TECK.B-T, TECK-N) North America's largest producer of steelmaking coal, reported lower-than-expected profit due to higher costs, lower production and sales volumes. However, adjusted profit rose to $671 million from $18 million at the same time last year, and revenue was up 70% on higher prices for coal, zinc and copper.

Metro (MRU-T) Beats earnings estimates. 

Husky Energy (HSE-T) A report suggests Husky and BP (BP-N) are considering swapping Canadian assets.

West Fraser Timber (WFT-T) CIBC says WFT may see the highest duty amid Canada's latest softwood lumber dispute with the U.S.

Caterpillar (CAT-N) is higher pre-market as the heavy machinery maker raises its profit outlook.

Rite Aid (RAD-N) jumps 7% pre-market on its earnings and outlook. 

Netflix (NFLX-O) shares are poised for a record high as the streaming company has struck a content licensing deal for China with Baidu (BADU-O).

Yahoo (YHOO-O) This isn't a stock mover per se but outgoing CEO Marissa Mayer stands to earn $186 million (U.S.) when Verizon buys the company. Mayer was named CEO about five years ago with a mission to turn the Yahoo around. She didn't necessarily do that but the shares were under $20 in 2012 and currently trade above $48. So mission sort of accomplished equals a sweet payday, warranted or not. 

CANADIAN ANALYSTS' CALLS

This is an overview of some of today's analyst research. We'll have more details on many of these reports in the next Digest. 

Enercare (ECI-T) RBC upgrades to Outperform from Sector Perform, raises price target to $26 (Canadian) from $21, giving the shares 29% upside, to reflect the analysts view... "that there will be years of growth ahead for its rental portfolio". 

Canadian National (CNR-T, CNI-N) RBC raises the price target to $110 from $102, maintains Outperform after the company's earnings results. CIBC raises the target to $105 from $100, maintains Neutral rating. National Bank raises the target to $101 from $94. 

CGI Group (GIB.A-T, GIB-N) RBC maintains Outperform, price target of $75, implying 18% upside.

Open Text (OTC-T, OTEX-O) RBC maintains Outperform, price target of $40 (U.S.), suggesting 19% upside potential.

Capital Power (CPX-T) BMO Nesbitt Burns upgrades to Outperform, raises the price target to $26 (Canadian). GMP FirstEnergy raises the price target to $31 from $30.50, maintains Buy after the company bought a natural gas-fired power generation facility in Alabama for $441 million (U.S.) CIBC raises the price target to $27 (Canadian) from $25, maintains Neutral rating. 

Canfor (CFP-T) Raymond James raises to Outperform with a price target of $24. Cut to Neutral at CIBC, price target of $18. Cut to Underperform at RBC, target of $17.

Home Capital Group (HCG-T) Cut to Sector Underperform at Scotiabank on "too much unquantifiable risk".

Ritchie Bros Auctioneers (RBA-T, RBA-N) initiated Outperform at William Blair.

U.S. ANALYSTS' CALLS

NCI Building Systems (NCS-N) RBC upgrades to Outperform from Sector Perform, raises price target to $20 (U.S.) from $18, giving the shares 19% potential return. The analysts are also raising the company's profit estimates. 

Electronic Arts Inc (EA-N) Cowen and Company raises target price to $90 from $85 saying that the company is well positioned for growth over the longer-term.

Hasbro Inc (HAS-N) Barclays raises target price to $109 from $95; rating Equal weight after the company reported a better-than-expected quarter despite headwinds such as tough comps and calendar shift.

T-Mobile US Inc (TMUS-O) Jefferies raises target price to $80 from $71; rating Buy after the company reported stronger subscriber metrics, and raised the full-year net subscriber addition expectations.

EARNINGS

Barrick Gold (ABX-T, ABX-N) The company reported weaker-than-expected quarterly earnings and slashed its forecast for output, and hiked costs at its gold mine in Argentina, where cyanide solution spilled recently for the third time in 18 months. Barrick reported group adjusted earnings of $162 million, or 14 cents a share, in the first quarter.

Coca-Cola Co (KO-N) reported a 20% drop in quarterly profit, largely weighed down by higher costs related to refranchising its North America bottling operations.

DuPont (DD-N), which is merging with Dow Chemical Co, reported a better-than-expected profit for the seventh straight quarter, helped by a rise in seed sales.

Eli Lilly and Co (LLY-N) reported a bigger-than-expected quarterly adjusted profit as the drugmaker benefited from higher demand for its newer products including diabetes treatment Trulicity and psoriasis drug Taltz.

DEALS

Tyson Foods (TSN-N) is buying AdvancePierre Foods (APFH-N), which, I admit, I've never heard of. But we're always learning. The deal price is $4.2 billion (U.S.), a 32% premium to where APFH was trading prior to word leaking the two meat producers were in talks.

WHAT WE'RE READING

ETF pioneer John Bogle on 4% returns for the next decade. marketwatch.com/story/what-if-john-bogle-is-right-about-4-stock-returns-2017-04-25

It's time to dust off the old 'Sell in May and go away' articles. marketwatch.com/story/heres-the-real-story-behind-sell-in-may-and-go-away-2017-04-25

Be Good.... Stay Well