Take that, Barrack Gold Corp. ! While UBS is maintaining its "buy" recommendation on the Canadian gold producer – um, make that copper-and-gold producer – it is removing the stock from its "key call" list.
The shift comes a day after Barrick outbid China's Minmetals Resources Ltd. for Equinox Minerals Ltd., a copper producer with operations in Africa. That deal has hit Barrick's share price, which has tumbled a total of 9.9 per cent over the past two days.
Part of UBS' change of heart is based on the view that the $7.3-billion acquisition exposes Barrick to more political risk. "Further, we note Barrick's multiple could compress as we believe investors may be concerned about the dilution of gold," said George Vasic, UBS strategist, in a note.
The change leaves just five Canadian stocks on the UBS key call list: First Quantum Minerals Ltd., Onex Corp., Quebecor Inc., Royal Bank of Canada and Suncor Energy Inc.
David Berman