Last updated: November 4, 2009

Enbridge Income Fund (ENF.UN)	Target: $12.00
Recommendation: Sector Perform	Risk: Medium
ENF reported Q3/09 DCPU of $0.30 ($0.31 prior year) matching our $0.30 est. for a payout ratio of 95.5%, and proposed a conversion to a corporation before Jan 1, 2011. Distribution cut: We estimate an $0.84 2011E dividend from the proposed Holdco. Taxed-deferred unitholders would experience a 27% decrease from their current cash yield, while the taxable investor's return would remain relatively unchanged due to favourable dividend tax treatment. Economic asymmetry: The disparity between Fund ownership and economic benefit may limit EIFH's ability to raise new capital. Despite the public's 58% ownership it only enjoys a 28% economic interest. Consequently, new capital disproportionately benefits Enbridge Inc. over the public. Sponsored dwarf: In our view, EIFHI is likely to remain a stunted ownership vehicle without any material new investments beyond those which can be funded by incremental debt financing at the existing Fund level or by reinvesting surplus distributable cash at the fund level. We maintain our 2-SP rating with a $0.50 lower $12.00/unit one-year target.
Research In Motion Limited * (RIM)	Target: $103.00
Recommendation: Sector Outperform	Risk: Medium
RIM shares have seen a sharp sell-off lately largely on fears that competition in the Verizon channel will hurt revenue growth. New product introductions at Verizon, global success, and AT&T improvement all coming. In addition to the Storm and Tour, we believe RIM will launch a new low-end device in the Verizon channel. Global sales of the 8520, we believe, have been strong, reducing dependence on North America, and we believe AT&T will become a bigger channel for the company in the months ahead. Putting competition in context. There has always been competition in Smartphones and there always will be. That others are launching devices or software platforms does not guarantee success. We believe RIM meets all the key success factors for industry success and very few other players come close. Remain 1-Sector Outperform. We are not changing any of our numbers. At this stage the share price seems to be an exceptional value at 11.5x forward EPS. * Please note, Research In Motion Limited comments were written on November 3, 2009.
Canadian Utilities Limited * (CU)	Target: $45.00
Recommendation: Sector Perform	Risk: Medium
CU reported Q3/09 EPS of $0.96 or $0.55 after one-time items. We were at $0.58, and the Street was at $0.50 ($0.39-$0.58 range). CU therefore beat the Street but missed us on its recurring EPS. Q3/09 adjusted EPS was 7% higher YOY on higher natural gas storage fees, lower OM&A costs at ATCO Electric, and the impact of the ATCO Electric 2009/2010 general tariff application decision. Lower NGL extraction margins and higher financing costs partially offset. Alberta forward power prices continued to languish at mid-$30/MWh in Oct/09 but Nov/Dec. 2009 prices have jumped $6/$10/MWh since last week as reports of a colder-than-expected winter continue to emerge. Our Q4/09E/2010E/2011E EPS is unchanged but Q4/09E could be higher. No change to P/E multiple or target price. We maintained our 2-SP rating on CU and our one-year target of $45. Our preference is neutral between Canadian Utilities and ATCO at a $5/share price spread. * Please note, Canadian Utilities Limited comments were written on November 3, 2009.

Ratings are: 1-Sector Outperform, 2-Sector Perform, 3-Sector Underperform

1-Sector Outperform: The stock is expected to outperform the average total return of the analyst's coverage universe over the next 12 months. 2-Sector Perform: The stock is expected to perform approximately in line with the average total return of the analyst's coverage universe over the next 12 months. 3-Sector Underperform: The stock is expected to underperform the average total return of the analyst's coverage universe over the next 12 months. Other Ratings: Tender: Investors are guided to tender to the terms of the takeover offer. Under Review: The rating has been temporarily placed under review, until sufficient information has been received and assessed by the analyst. Risk Rankings Low: Low financial and operational risk, high predictability of financial results, low stock volatility. Medium: Moderate financial and operational risk, moderate predictability of financial results, moderate stock volatility. High: High financial and/or operational risk, low predictability of financial results, high stock volatility. Caution Warranted: Exceptionally high financial and/or operational risk, exceptionally low predictability of financial results, exceptionally high stock volatility. For risk-tolerant investors only.

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