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NextEra Energy Inc. (NEE)
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Brookfield Renewable Partners L.P. (BEP.UN)
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Algonquin Power & Utilities Corp. (AQN)
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Capital Power Corporation (CPX)
Q: Where do you think this might bottom out? I sold half around 11. It’s in my rif so no tax issue. Just blow it out??
5i Research Answer:
AQN has been under tremendous pressure as its leverage level has increased to an unsustainably high level, AQN generated negative free cash flow every year in the last four years. We don’t think investors should try to time the bottom in a name like this. Theoretically, AQN could eventually recover if the company can manage its debt levels and grow organically, but we tend not to bet heavily on turnaround stories (which rarely take place in a timely fashion). However, the recovery is highly uncertain and may take a very long time to happen (if ever), we think investors are better off looking for opportunities elsewhere. Within the utilities space, we like NEE, BEP.UN, and CPX.