Investment Q&A

Q: I own ALA (Alta gas )CU (can utility ) VET (Vermillion ) all with a loss.I am planning to sell for tax loss.When is the best time to sell so I do not loose the divider for month of DEC, before end of the year.Thank you

Q: Ala fixed rate preferred shares look interesting. Which series of preferred look most attractive. Given that preferred share dividend must be paid before common it would appear that their yield of between 5.5 and 6.75 should be relatively safe.

Q: Considering the recent moves in natural gas, could you comment again on Altagas. Dry gas has moved sharply higher while gas liquids have gone in the opposite direction.
The questions I have in mind include:
- With higher gas prices will their power generation suffer or are they hedged?
- Will higher prices effect their pipeline volumes and storage facilities favourably?
- Will their new construction project on the coast be effected?
- Do they connect to dry gas fields that have shut in wells while prices were low?
Finally, are the moves too recent with too many moving parts to even comment reliably?

Q: Opinion on Alta gas ....

Q: For ALA, AQN, DIV, DR, ENB, PRV.UN, what is the payout ratio for each of these companies? Is payout ratio a valuable measure of dividend sustainability? Can payout ratio about 100% be maintained? thanks

Q: Hi there - down 40% on both. If you had to get rid of one, which would it be?

Q: Good day!
I am an income investor, living on dividends. On Oct 24th or so I sold 50% of my full position in ALA for tax loss reasons, planning on buying it back late November in an ideal world. I sold over $21, and it is now at $16 or less.
However, I also have a 50% position in Chemtrade and also a 50% in American Hotel. All have somewhat larger dividends over the 10% mark. I have 'reasonable' confidence in a long term hold for all three, and see the great dividends as being very well paid to wait.
Anticipating a possible dividend drop for ALA, I might consider deploying partially or even fully into one of the other two, thinking their dividend payment is more likely to remain where it is in the short term, and yet the upside in each might be as good as ALA. I would appreciate your comments on these thoughts, and any guidance you could muster as to which direction to go.
Thanks!
Paul

Q: Hello 5i team: ALA was originally at a20% weight in my tfsa.now ALA is down 50%.considering no tax loss advantage would you suggest I dump it ? I have read other answers. I hold all the energy I want in my open account. Any Best case replacement to regain my loss?or hold? Time frame not an issue. Thanks Larry

Q: I asked this question yesterday but it must have been lost in the ether since it wasn’t answered.
AltaGas issued an IPO in mid October at a price of $14.50 which was well before the stock price dropped fro $20 per share to about $16.50 after the 3rd quarter results were released. This makes no sense to me as I would believe the stock price should have immediately reacted to the announcement of a share offering.
In the 3rd quarter results, the company announced an increase in dividend to $0.1825 from $0.175 beginning on November 27. This again makes no sense to me since I was under the belief that the company needs to shore up its balance sheet. In addition, at current prices the dividend is already at about 13% of price.
Can you help explain both of these?
Thanks
Ed

Q: Hi Peter/Ryan
I am in the dog house on listed stocks in my registered accounts (RRSP/TFSA/RESP). For TOY and TSGI , I will wait for your review in Q&A section. As part of cleaning up portfolio would you keep these or if not then replace with which stocks? Money requirement and risk is not an issue.

Value your opinion. Thanks

Q: Good morning team,

How much will the share price fall if ALA decides to reduce its dividend by half?

Some may actually like the company more for at least the ambiguity about ALA's future will be significantly reduced.

Will you be a buyer in an anticipation of such a move by ALA or do you think ALA management is too keen to keep its word about not cutting the dividend.

Thanks as always!

Q: Do you think there is a possibility that ALA could go bankrupt? Based on all the negative decisions that have eroded share value, it would appear to me that a wholesale change of the Board of Directors could be welcome news for this company. Who could make this happen?

Q: I want to take my huge loss in my rrsp on Altagas and move on. You mentioned there are better names in the sector. I already have a 3 percent position in Algonquin power. Which companies have better upside.

Q: BOUGHT THESE NOT LONG AGO AT 10 YEAR LOW AND NOW DOWN 25 % OR MORE.. STAY THE COURSE OR BAIL?>>

Q: Hi,
thanks to 5i, my portfolio is fairly well diversified and overall doing quite well. The equities listed in this question are the ones I'm down on the most, some are near 25-50% losses. What general guidelines help determine whether to sell these 'losers' and move the remaining funds to other stocks or whether to continue to hold? Can you list each of these with a buy/sell/hold on a longer term (20 yr) view, these are all 1-5% each of the total portfolio. Deduct as many credits as needed since there are really two questions here.

Q: I'm down 40% on ALA based on yesterday's closing price. Should I dump it now before the expected dividend cut is announced? In other words, how much more is the stock price likely to drop when the cut happens and will it ever recover?

Q: ..do you see any chance for a rebound in the stock price during the next 3 - 6 months. a change in mgmt seems in order. thanks as always.

Q: Is ALA worth investing at this level?
Thank you.

Q: Just a comment about ALA's changed circumstances. During the conference call management made reference to changed circumstances in relation to access to capital and cost of capital for funding its growth plans. In addition to changes in interest rates over the past couple of years, a significant aspect of the capital equation is that its share price has basically been halved since the announcement of the WGL transaction. Recourse to capital through an equity raise would likely further reduce the share price and have a relatively greater dilutive effect on per share earnings and cash flow than it would have had when the share price was $33. The result is that the answer to the question of what is the most prudent means for the company to raise money has shifted. Though it's market cap is around $4.5B, according to the Q3 balance sheet ALA has about $23B in assets against about $12B in liabilities. Under those circumstances, if it can get anywhere close to 'value' for its assets, its cheapest access to capital by a longshot is simply through the monetization of some of its own asset base. If it can create further increased value by reinvesting that capital in its preferred growth projects, that can still be a very attractive proposition and set the company up well for the future. But in the meantime, the resulting reduction of the asset base for funding purposes will mean that it will have diminished cash flow from operations, and it is that cash flow that is required to pay/maintain/raise the dividend. As a long-time shareholder, I have taken a significant loss on my ALA exposure but I don't think there needs to be recourse to suggestions of fraud to explain the circumstances that the company has come to today. My view is that ALA may well rise again and be successful but that it would be further in the future than I had been looking for, there will probably be a (prudently) reduced dividend in the meantime, and the present market conditions are setting up better near-term opportunities elsewhere for loss recovery and profit, through companies that are not in the doghouse when the market comes definitively out of its corrective phase. ... for what it's worth.

Q: Can you please tell me how much stock the company insiders hold in AltaGas?