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Allied Properties REIT strong on innovation

Dundee Securities analyst Brad Cutsey raised his target on Allied Properties Real Estate Investment Trust after it took a new step to grow its office portfolio.

Management at Allied Properties continues to "think outside the box" to find ways to add value to its existing properties, Mr. Cutsey said Tuesday in a report.

Allied Properties REIT and RioCan REIT this week teamed up in a joint-venture to acquire sites with mixed-use potential in the downtown areas of Canada's major cities. (Mr. Cutesy has no rating for RioCan.)

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Allied, known for its renovated brick-and beam buildings, has focused on the office market, while RioCan has concentrated on retail properties.

They will try to identify properties within their portfolios that are suitable for redevelopment or intensification, or those where an assembly of adjacent lands is possible.

The first two partnerships will be to intensify sites next to existing Allied buildings in Toronto.

"Although it is too early to determine what impact these joint-venture agreements may have on future cash flows, we do believe these are a significant positive for both parties as each REIT will play to its strength and allow them to create value greater than the sum of each project's parts," he wrote.

"We also believe that this is unlikely to be the last instance of REIT's partnering on adjacent properties to create value as the 'urbanization trend' continues to play out across Canada."

Upside: Mr. Cutsey, who maintains his "buy" rating, raised his one-year target to $31.50 a share from $29.50.


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BlackPearl Resources Inc.
Shares of the oil and gas company are attractive following a strong pullback, said RBC Dominion Securities analyst Mark Friesen.

BlackPearl has no debt, and is open to selling assets and different ways of financing to fund development.

Upside: He raised his rating to "outperform," but kept his one-year target of $5.50 a share.


Alacer Gold Corp.
Shares of the gold producer will likely be in the "penalty box" until there is more concrete details of growth plans now that its South Kalgoorlie expansion project in Australia has been shelved, said Raymond James analyst Brad Humphrey.

Downside: He cut his one-year target to $8 a share from $10, but maintains a "market perform" rating.

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C&C Energia Ltd.
There have been changes to management lately at the oil and gas company, "but we are concerned over the lack of production growth," CIBC World Markets analyst Ian MacQueen said.

Downside: He downgraded C&C Energia to "sector perform," and cut his one-year target to $10 a share from $11.50.


Weyerhaeuser Co.
BMO Nesbitt Burns analyst Stephen Atkinson downgraded the forest products company due to stock price appreciation.

Weyerhaeuser, he said, is entering a "seasonally weak period" amid disappointing macroeconomic news from Europe, China and North America.

Downside: He lowered his rating to "underperform," but kept his one-year target of $23 a share.

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