Algonquin Power & Utilities Corp (AQN.TO)

He likes it on pullback as they have a chance of improving their earnings power. It still has a partnership with EMA-T. Between $9 and $9.50 it is a buy and the yield is attractive.

Did own this, but his stop loss kicked him out. His concern with the whole sector is that a lot of the pension funds in search for yield, have acquired quite a few of these companies. Come the fall, if there is any kind of trouble with the market, they are all going to have to liquidate. Because of that, a systematic risk within the system overwhelms his continuation to holding it for now. This is one that he will add when it gets back on. His company has an $11 target and a sector outperform.

(A Top Pick May 25/15. Up 2.59%.) A SHORT. His view is that utilities are in a very dangerous part of the market cycle. Very high valuations. Also, has high debts. People buy this for yield, but it scores poorly on valuation for him. Trading at 16X EBITDA.

(A Top Pick June 12/14. Up 21%.) Still sees this growing at around 18% over the next couple of years. Most of its portfolios are in the US, so you really benefit from a low Cdn$. Still trading below market multiple. Still a Buy.

Short. All the utilities are falling into this bucket of being expensive. Utility stocks are going to be under pressure. They are expensive and carry a lot of debt.

The company said they were delaying the release of their financials, and investors got very worried that there was something wrong. The stock fell off aggressively and the company then announced that there was nothing material that they could find. They then came out with their financials indicating a good quarter, and the stock rebounded. Half of the company is regulated utilities and the other half is renewables that have growth and upside. It strikes a nice balance between safety and growth. Pays a good dividend.

There is a lot of volatility to this story over the last couple of weeks. Management did come out and address why it was down so much over the last week or so. News came out about accounting issues. The earnings don’t alleviate that and we have to get to the bottom of these accounting issues. Wait in case there is more risk to the story than we are aware of now.

All the interest rate sensitives, which include the utilities, are affected by the fear of rising longer-term interest rates. On this one, there is an uncertainty and the stock has come off pretty sharply.

Chart shows a series of higher highs and higher lows from late 2013. That trend was broken earlier this year. The next level of support is going to come in at around $8. Not sure that he would Buy at this point as it might have another $.70-$.80 to go. Chart is not a great-looking one.

Has been beaten up incredibly in the last couple of days, on an accounting story. Doesn’t know what the potentials could be. It looks like there is an investigation, but he doesn’t know any more about that. The market tends to sell now and ask questions later. He would be inclined to try to get more information by watching the newspapers. You don’t want to necessarily sell it if there isn’t really an issue at all.

(A Top Pick Feb 28/14. Up 37.52%.) They have been doing a lot of right things. A well-managed company. Current target is $10.50. Yield of 4.1%. He has been adding to his holdings.

(A Top Pick Jan 24/14. Up 48.74%.) He likes the power and he likes the utilities. He’ll be continuing to add to his holdings when he brings some cash back in.

Along with a lot of other utility stocks, this has gone on a tremendous run, especially in the 2^nd half of last year. Have some smaller projects that they’ve been able to bring on and they have had one of the most successful years. A great stock to hold. He owns this through his position in Emera (EMA-T), which owns a significant stake. Nothing wrong with Algonquin, but the valuation might give you a bit of a pause.

Dividend is absolutely safe. A nice stable business model. CEO has a great track record and he thinks they will continue to grow out the business model. The dividend could grow 8-10% over the next couple of years and cash flows will grow to support that. They just did an equity raise to shore up the balance sheet.

Just added a bit to his portfolios. It is a good story. Yield of about 4%. He likes the utilities. They are being built. These make a lot of sense. His company has a $10.50 target on this a year out.