Shorting TMX Group Inc. (TMXGF.PK) is one of 20 investment ideas that investors should consider over the next three months, according to RBC Capital Markets.
In the most recent quarterly "best ideas" report, analyst Geoffrey Kwan noted that TMX's current stock price does not reflect near-term risks, which include market share erosion, pricing pressure, regulation of market data fees; and a cost structure that may be too high in a more competitive environment.
TMX is the only stock on this quarter's list recommended as a short. The Q3 long picks include:
Aeterna Zentaris Inc. (NASDAQ:AEZS), Atlas Iron Ltd., BCE Inc.,Detour Gold Corporation (OTCPK:DRGDF), Fairfax Financial Holdings (FFH), Intact Financial Corp., Kinross Gold Corporation (NYSE:KGC), MacDonald, Dettwiler and Associates Ltd., National Bank of Canada, Neo Material Technologies Inc. (OTC:NEMFF), Pacific Rubiales Energy Corp. (OTCPK:PEGFF), Palm Inc. (PALM), Research in Motion Limited (RIMM), Shaw Communications Inc. (NYSE:SJR), Sherritt International Corporation (OTCPK:SHERF), Sino-Forest Corporation, SNC-Lavalin Group Inc. (OTCPK:SNCAF), Sterling Resources Ltd., Yamana Gold Inc. (NYSE:AUY).
Since its inception in 2008, the "best ideas" list has generated a compound annualized return of 8.8% versus 5.3% for the broader S&P/TSX composite index.
Last quarter, the list return 16.7% compared to 20% for the TSX. The best performing stocks in Q2 were Research in Motion Ltd., up 51.7%, H&R Reit, up 44.9% and Niko Resources (OTCPK:NKRSF), up 36.4%.