The Globe and Mail reports in its Wednesday edition that Acumen Capital analyst Nick Corcoran says Boston Pizza Royalties Income Fund offers a "compelling investment at current levels." The Globe's David Leeder writes that Mr. Corcoran began coverage with a "buy" rating and $19.50 share target, which is 50 cents below the consensus. Mr. Corcoran says in a note: "While BPF.UN's same store sales growth were adversely impacted by its concentration in oil and gas producing regions on the downswing, we believe that it will be favourably impacted by its concentration in these regions on the upswing. ... With the Boston Pizza concept well represented across Canada and growing at a relatively modest rate (current same store sales growth plus 8–10 net new restaurants per year), we believe that an acquisition could provide the next leg of growth and create value for unitholders. Based on our knowledge of the intercorporate relationships between BPF.UN and BPI, we believe a potential acquisition could occur through (1) BPI acquiring a concept and selling the rights to BPF.UN in exchange for an ongoing royalty, or (2) BPF.UN acquiring the rights to a concept from an operating company in exchange for an ongoing royalty."
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