Investment Q&A

Q: I have very little exposure to real estate in my portfolio (app 2%) due to concerns about the effects of covid & now rising interest rates. I am considering selling app 50% of my real estate holdings (Riocan - 3000 shares) and using proceeds to increase holdings in either BCE, Telus or Enbridge.

Please give me your thoughts

Q: Looks like Brookfield has a challenge ahead of it.

RISK ANALYSIS - Simply Walls Street

1. Earnings are forecast to decline by an average of 62.6% per year for the next 3 years

2. Interest payments are not well covered by earnings

3. Dividend of 4.2% is not well covered

4. Large one-off items impacting financial results

Only one firm's opinion.

Q: gear is now at a buck yielding 12%, generally this is a warning, but they have zero debt and oil is hanging at about 75.
is this a great buying opportunity, or am i missing something. i guess there are lots of companies like this now.dave

Q: At what price could this stock could represent a reasonable" Buy" ?

Q: Peter, it is my understanding that all three of these companies now have very low debt. They also have a very low p.e. They also have a very long reserve life. Is it true that renewable energy is many years away from being a viable solution for energy for the world? The share price for renewables has certainly shown that. ie. RNW Algonquin.
Is this huge drop in these energy companies due to the no more piplelines and no case for LGN, the Trudeau effect. Are these three companies still overpriced?? What would be a good entry point?? Is not a 9.5% div on Peyto the same as a 12% GIC after tax is calculated?? I would like your opinion on these questions Thanks Ken

Q: Dominion Energy is having a bad year is it debt related? though interest rates are on the rise this one has been hit harder then my other US utilities.

Q: Hi 5i
I think Peter has been around long enough to remember December 1999 when TRP cut its dividend from 1.20 to .80 and the stock tanked to under $10. More recently ALA made a deal to buy WGL and issued shares at $31 ( I think Caisse depot or other big guys were in for $400 million). ALA went down to around $11 and recoverd to over $28 recently. So my question is: do you see any similarities to TRP or ALA turnarounds to think that AQN ($9.50) could follow a similar chart?
Thanks, Greg

Q: The US authorities disapproved the Kentucky deal. Wasn’t it a good thing for the company stock given that the market hadn’t liked it in the first place? However, the stock is down today. Can you explain the reaction?

Thanks,

Q: My two underperforming energy E&P stocks are CNE and PXT. Both seem restrained by their activity in Columbia, with the hostile new prez and increased taxation. What I think I know is as follows:

CNE is primarily nat gas, provides decent production reports and projections and is working to supply more regions via a pipeline project, paid for by and built by a Chinese partner, and scheduled for operation by 2024. CNE has more debt than peers, but largely at a fixed rate until 2028. Notwithstanding that they trade at 1.52XCF, yield >10%, have reduced their share count steadily through modest buy-backs and have optimistic guidance, the stock has steadily fallen to the point that I’m now down 43%! Thus, I could exploit a loss.

I’m still up somewhat on Parex, which has great financials and outlook, and seems widely loved by analysts, though this is not reflected in the recent price action. Parex is primarily oil, but in their most recent report, they note Columbia’s growing demand for nat gas and say that they plan to do more in that direction – supporting what Canacol has said. I have a modest gain on Parex, though the stock has performed poorly relative to its Canadian-based peers – thus no tax loss to be harvested, and delaying a sale until after tax loss season could be contemplated.

Am I missing something about one or both of these companies, or are they just mispriced? Sell CNE now and PXT later, or hold on?

Q: when does price get interesting ... is aqn better

Q: They missed earnings but to get punished by a 17% drop seems excessive. Are they paying for the sins of Algonquin here? Are there reasons to be concerned?

Q: Hi 5i,
Can you explain why investors don't like TVE - recently at least - and do you see any reason to think this negative sentiment might turn around any time soon so that it at least keeps pace with its peers?
Thanks,
Peter

Q: Do you prefer one pipeline over the other? Is there any point in owning both? Should I consider any other pipelines that deliver oil and gas to the U.S.A.?

Q: Hi Peter

There was news today that TC energy's spills have become more intense in the past decade. Is it possible this report may result in some serious repercussions for the company?
It has been many days since the recent spill and yet the root cause has not been identified.
Is there a quality issue with TC energy?
Overall, is it safe to continue holding TC stock ?

Q: Can you comment on the stock with its recent acquisition and its share spike. Would you consider it a buy and if so at what price.

Q: Hi Peter, Ryan, and 5i Team,

More comments, a question, and a link regarding Algonquin and some historical relevance!

AQN was held in my wife's RRIF and daughter-in-law's RRSP. My feeling is that AQN will be in the 'penalty box' for quite some time, and the share price will settle around $10.00 or less. Since they're both conservative investors, I switched them to Fortis FTS, which they already held in their respective accounts. It was an easy decision. Do you agree with the thinking here?

AQN was also held in our son's TFSA, but he needed the funds recently for a house purchase. I was fortunate to sell it at around $16.00.

I didn't act soon enough with the two other accounts holding AQN for several reasons. Living in Oakville, where AQN's headquarters is located, resulted in "home town bias" - a mistake in retrospect, because I never felt comfortable with its acquisition of Kentucky Power. It was too expensive, and too much debt was taken on by Algonquin.

Finally, here's a link from 'Seeking Alpha' which outlines the fate that AQN may face when compared to a similar ill-fated and debt-ridden mistake made by AltaGas when they bought WGN. It's taken them a long time to correct their mistake, and I suspect that AQN's mistake will have similar consequences.

https://seekingalpha.com/article/4563884-altagas-vs-algonquin-discounted-utilities-with-ominous-similarities?mailingid=29958270&messageid=must_reads&serial=29958270.150190&utm_campaign=Must%2BReads%2BDecember%2B12%2C%2B2022&utm_content=seeking_alpha&utm_medium=email&utm_source=seeking_alpha&utm_term=must_reads

Thanks for your continued guidance!

Q: Hi,
O&G sector is taking a beating!
Is this downtrend going to be sustained or short lived?
What is your prediction going forward for the O&G sector in general? For the medium term, say one year.
Add to one's position or shed some or stay the course?
The perma oil bulls like Eric Nuttal are saying stay positive! Others especially Technical Analysts seem to be ringing warning bells.
Curious to know where you stand.
Many thanks.

Q: Just a follow up to Dennis's question regarding yield on AQN. Is it possible that the current yield on some of it has reached the level he mentions based on the market price of the debt instrument? If so would that indicate that the debt market expects trouble here?

Thanks

Q: Hi Peter and Staff

I know you cannot believe everything you read or hear. I hear a commentator say last week that the company had floating debt that had risen to 21%. Is this true? I know rates have gone up by some 4% by that would still mean they were paying rather ridiculous floating rates for a public company?

IF not true perhaps you could shed some light on what they are inflicted with as far as floating rate debt and terms?

Thanks for all you do
Dennis

Q: i am interested in buying a intorenewable energy . is it better to by an ETF ( need a name ) or a company. what companies would you recommend ?