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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Good morning 5i,

Disclosure first: Sorry for another ENB, and also, I've owned ENB for 20 years now, and it's done me very well! However, I have been really thinking about the last several years, more importantly the coming years.

I read the Q&A daily, great service, and have a question about the ratios (P/E, P/CF, P/B, etc) you provide in answers to other ENB questions. Am I correct in assuming they are from Bloomberg ... What numbers / earnings would these be based on ... Adjusted? GAAP? DCF?

Also, from ENB's press release:
•Earnings of $207 million or $0.13 per common share for the fourth quarter and earnings of $2,529 million or $1.66 per common share for the full year, both including the impact of a number of unusual, non-recurring or non-operating factors.

The "number of unusual, non-recurring or non-operating factors."
I'm pretty sure I remember these exact same words in an Enron press release.

From Globe Investor:
Enbridge said it took a $4.55-billion charge in the latest quarter to write down assets in the gas transmission and midstream business.

I can't find 'What' assets, worth $4.55B that they wrote down with no apparent explanation. Hopefully, I'm not looking hard enough.
Did 5i see anything that further explains this?
(for comparison, the Line 3 replacement is $5.3B, so $4.55B must be substantial)

As mentioned, I read this forum daily, and do know that while you endorse the company, you also state it is not without some risk.
(both TRP(~20 yrs ago) and KMI have cut their dividends before)

Appreciate your answer to the ratios question, and comments on the write downs.
Thank you, I do enjoy the service, and have a great weekend.

Rod

(deduct accordingly)
Read Answer Asked by Rod on February 19, 2018
Q: This is not a question, but rather a comment on your statement that ALA.r distributions are mostly income for tax purposes. That is incorrect. It is mostly ROC. ALA put out a link to the month-by-month income vs ROC for distributions in 2017 here:
https://www.altagas.ca/sites/default/files/2018-02/Subscription%20Receipts%20Taxation%20Information.pdf

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RE:
Asked by Rajiv on February 14, 2018
5I RESEARCH ANSWER:
Utility and income stocks are not having a good year at all, on fears of higher interest rates. ALA is down 9% YTD. But we have no particular worries on the company itself and do not see the dividend at risk. As 'part' of a portfolio designed to generate income, we would be comfortable with it. Note the receipts pay interest income (for tax purposes).
Read Answer Asked by arnold on February 17, 2018
Q: With just about every car manufacturer bringing out electric cars in the near future, how is the increase in electricity going to be produced? In Alberta 45% of their energy is produced by coal; 10% of energy in Canada is produced by coal and it is around 40% for the US. Hydro and nuclear plants are very expensive and time consuming to build; and getting new ones built are extremely difficult. Are any of these existing plants under utilized? Wind or solar power - I don't think so. So, does that leave fossil fuels to take up the increased demand? If that is correct, which existing energy companies would you think are best positioned?
Read Answer Asked by stephen on February 16, 2018
Q: Regarding utilities falling prices, you have answered in a couple times in the Q&A: "The main issue is that US tax reform is going to reduce earnings due to lower tax recoveries." Can you expand on this? What is the percentage of reduction? I looked for an article and couldn't find one explaining this. I am looking to add to AQN, FTS and BEP.UN for their growing yield, but I can't determine a fair price or if they're under/over valued because of the US tax reform and am hoping you can help me make my decision. Thanks
Read Answer Asked by Curtis on February 16, 2018
Q: Hello 5i staff,
With both of us with defined teacher pensions and funds in the bank, at 71 years and about $1,000,000 (distributed through all sectors) in GiC's, dividend paying equities, ETF's as well as the income portfolio, do I really need the XDG as you so often suggest or can I let it go and use the funds for the new additions to the income portfolio? If so, for materials, what would you suggest as a replacement that provides dividends and also is a good fit in the case of a severe downturn? Please take as many points as needed.
Thank you,
Stanley
Read Answer Asked by STANLEY on February 16, 2018
Q: Can you please give your assessment of Keyera's latest quarterly results, released today? Stock price has been caught up in the interest-sensitive selloff this year, perhaps unjustly? The business appears to be doing fine - good growth prospects, along with dividend growth. What's not to like here?
Thanks,
Brian
Read Answer Asked by Brian on February 16, 2018
Q: In general, do you think it is a good time to convert REITS & Energy mid-stream players to something like XTR or perhaps CPD? I hold HR.UN, AX.UN, RUF.UN, GEI, CHE.UN and KEY as candidates for the switch. I consider these as all fixed income proxy plays and am down in all instances roughly 15-20%. My bigger question would be: Do I have a better chance of capital recovery just holding them or making the switch knowing that XTR or CPD are certainly not big cap growth opportunities. Thanks in advance for your response.
Read Answer Asked by Carl on February 15, 2018
Q: emera, fortis, enbridge (insert many others)

arguably solid businesses with good assets

have been sitting on my hands for weeks, not buying (and making money by not buying)

is this just an overblown worry about rates increasing or potentially the market telling us that rates are going up far far more than expected?

dust off the crystal ball..............
thanks
Read Answer Asked by Robert on February 15, 2018
Q: What is the problem with the Brookfield family?Bam.a in particular has been very weak
Read Answer Asked by Kim on February 15, 2018
Q: Hello
A few months ago I had asked you about going overweight with Crius Energy as a means for covering margin interest. It has worked well for me so far. I do have anear full position in Altagas subscription receipts ALA-R. At today's prices, would you recommend going overweight here as well so as to cover some margin interest?
Read Answer Asked by Rajiv on February 14, 2018
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