The Zacks Analyst Blog Highlights: Canadian Imperial Bank of Commerce, Sun Life Financial, Royal Bank of Canada, Royal Bank of Scotland Group and Patterson-UTI Energy

CHICAGO, Aug. 9, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Canadian Imperial Bank of Commerce (NYSE:CM), Sun Life Financial Inc. (NYSE:SLF), Royal Bank of Canada (NYSE:RY), Royal Bank of Scotland Group (NYSE:RBS) and Patterson-UTI Energy Inc. (Nasdaq:PTEN).

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Here are highlights from Wednesday's Analyst Blog:

CIBC to Buy Wealth Management Unit

In order to further expand its wealth management operations, Canadian Imperial Bank of Commerce (NYSE:CM) announced a deal to acquire private wealth management business of MFS McLean Budden, a subsidiary of Sun Life Financial Inc. (NYSE:SLF). The agreement would substantially improve CIBC's market share in the wealth management sector.

Currently, MFS McLean's private wealth management unit manages assets valued at approximately C$1.4 billion (US$1.4 billion) for high net-worth investors. Though the financial terms of the deal were not disclosed, CIBC stated that the acquired unit would be integrated with its Wealth Management division's private-wealth business. Moreover, the agreement, which is still subject to regulatory approval, is expected to close by the end of October.

The private wealth management unit that CIBC is acquiring was part of the investment-management firm, McLean Budden, which Sun Life acquired in 2011. Additionally, Sun Life integrated this firm with its mutual-fund unit, MFS Investment Management and renamed it MFS McLean Budden.

CIBC is witnessing a massive surge in demand for wealth management services and is striving hard to improve the performance of its private-wealth business that comprises of private investment counsel, private banking and trust operations. The unit has been recording nearly flat revenues for the last several quarters. Moreover, in the fiscal second quarter (ended April 30), the unit contributed roughly 6% of Wealth Management's total revenue.

Additionally, CIBC has been augmenting its wealth management operations inorganically. In July 2011, the company announced its decision to buy a 41% equity stake in American Century Investments, a major U.S. asset management company, for US$848 million. This deal enabled the company to diversify its footprints and provided access to American Century's asset management capabilities.

Apart from CIBC, many other Canadian banks are trying to ramp their wealth management operations. Earlier this year, Royal Bank of Canada (NYSE:RY) announced a deal to buy the Latin American, Caribbean and African private banking business of Coutts – the wealth division of Royal Bank of Scotland Group (NYSE:RBS).

We believe that CIBC's recent acquisition will enhance revenue generation from its private-wealth business. Further, amid the gloomy global economic environment, the company will be able to stabilize its financials.

CIBC currently retain a Zacks #2 Rank, which translates into a short-term Buy rating.

Patterson-UTI: 224 Rigs at Work

Onshore contract driller Patterson-UTI Energy Inc. (Nasdaq:PTEN) declared that its July 2012 drill rig count averaged 224, up marginally from 222 in the previous month. The company operated 219 rigs in the U.S. and 5 in Canada in July, compared with 221 rigs in the U.S. and one in Canada during June this year.

Patterson-UTI's activity levels in the U.S. peaked in early October 2008 with a rig count of 275. From then through the second quarter of 2009, the company witnessed a steep and rapid decline in rig count on the back of decreased demand, largely caused by lower commodity prices for natural gas and tighter access to credit.

However, during the last few quarters, there have been signs that companies were beginning to bring rigs back on line amid signs of economic stabilization pushed by energy demand. This is reflected in Patterson-UTI's monthly rig count numbers, which recovered substantially from a low of 60 in May 2009 to reach around 240 few months back.

Rating

Patterson-UTI has approximately 330 land-based rigs that operate mainly in the oil and natural gas producing regions of North America. The company operates primarily in Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, Pennsylvania, West Virginia and western Canada.

Additionally, Patterson-UTI is engaged in the exploration and production business and provides pressure pumping services (an umbrella term used to describe a number of vital services performed on new and existing wells).

We continue to appreciate the company for its growing premium land rig fleet, un-levered balance sheet and cost containment efforts.

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