Canadian equity strategy

Weekly investment ideas

24/02/2016

YTD through the Feb. 23/2016 close, MBT shares have outperformed the S&P/TSX Telecom Services subindex on a total return basis (+12.2% versus +7.4%). The run‐up in MBT shares may have been driven by takeout speculation following Manitoba Tel’s successful sale of its Allstream division to Zayo on 15 Jan/2016.

However, while the Scotiabank GBM telecom services analyst does not dispute that MBT’s larger peers (e.g. BCE and/or TELUS) would have an interest in the remaining business, valuation and thorny regulatory issues could present formidable obstacles to a successful transaction.

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