Gajan KulasingamCapital PowerCPX.TOCOMMENTMar 31, 2015

It takes time to build data centres, but remains a need for them and power. CPX has positioned themselves them in this demand. Valuation is good and are growing above average. They pay a nice dividend.

Focuses on selling electricity into the open market, rather than having contracts. Upside if there are electricity shortages. But in utilities, he looks for fully contracted revenues and predictable, long-term cashflows.

No real concerns. Probably good long-term hold. Predominantly nat gas with a bit of renewable energy. Half its business now in the dynamically growing, data-centre focused US. 

Trades ~27x PE, premium to historical norms. Compound return over last 10 years is an impressive 21%. Chart looks good, management is pretty good. Yield is ~4%, with good cadence of dividend growth.

He prefers another name.

Utility sector is starting to slowly matter again. Getting attention because power demand is growing, especially in US with AI and data centres.

She invests selectively in the space, and this is a name to own.

Likes the business. Yield is pretty good. One issue management sees is that Alberta government has to get its act together for data centre projects to come to fruition. (He curls with an AI consultant who said that everyone's going to Texas:  land, nat gas, minimal regulations.)

Has projects in US. Power demand will skyrocket no matter where AI is situated.

Recent earnings were in line. Great acquisition in Pennsylvania last year, which is getting increased prices. Front-and-centre for Alberta data centres. Trades at 8.5x forward operating cashflow. Good, safe utility play in growing areas.

Has done well because demand for power has shot through the roof, so its assets have been revalued significantly higher. Very well managed. Surplus of power, and chances are low this year that that excess will be released. Has opportunities in US to transition from coal to nat gas. 

If you're focused on Canada, he'd be a buyer today as a derivative AI play. But his preference to play AI would be MSFT with a little bit of ORCL.

If you want dividends, look at Canadian pipelines rather than this. CPX is a play on AI centre growth in Alberta, which is great. He owns ALA instead.

Dividend growth is expected at 2% to 4%. These numbers are OK, but we think investors are disappointed that dividend growth is not set higher. CPX is taking a 'growth' route and this may be at the expense of dividend growth and this has disappointed some.
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A clean story with strong visibility in the space.

Support is $60, then at $55. Is not trading like a traditional utility, which are following AI stocks. The selling will continue in these sectors. The stock needs time before it stabilizes and could rise again if AI stocks do.

(Note the short timeframe.)  More newsworthy lately because data centres are looking to set up shop in Alberta with its cheaper power. In his mind, only a matter of time before it partners with one of the hyperscalers.

People looking at long-life, more-utility-type assets are focusing more on electrical power generation than on the pipelines. In that camp, you might look at this name.

Likes the regulated utilities. 

Alberta data centres' growth is fantastic, tapping into CPX nat gas power generation. Massive price increase on a new contract.