Inter Pipeline (IPL.TO)

There is a huge bubble brewing in the pipeline stocks. Closed at $35.98. His model price is $30.60, a negative 15%. Trading at a valuation of almost 4X Book. This is the highest valuation these companies have ever been in the last 20 years. Yield of 3.6%.

It looks like they can do 10% growth annually. Dividend is okay. Likes the pipeline aspect in Alberta. The oil sands and other projects are all creating the need to get stuff from A to B. They dominate the scene in Alberta, and he thinks this is going to continue. 10% growth is a reasonably conservative estimate.

(Market Call Minute) Too pricy.

Has reduced his position in this. Stock has done incredibly well. Trading at a pretty high multiple for what is considered a utility. He would certainly take some money off the table.

(Top Pick Jul 22/13, Up 61.22%) Valuations are stretched on all four major pipeline companies. They spent a lot on infrastructure and now there is increased capacity. It stays a core holding. It is an attractive entry point for a 3-5 year holding.

An Alberta energy infrastructure operator and a great business. Really a play in the northern Athabascan and Cold Lake regions. Have 3 pipelines. Funded 2 of the pipelines with 2 anchor tenants. The thesis is that they are going to add on incremental shippers with very high, accretive returns. Dividend is sustainable, and will probably grow north of 5%-7% over the next 2-3 years. There continues to be significant CapX put into the space. The only risk would be that they are predominantly in the Alberta pipeline system, and will need to have market access. They can get their pipelines to key Edmonton terminals, and will need to have long haul pipelines out of Edmonton. With a two-year time horizon, you can chip away here. South of $29 would be a good access price, and would give you a 10%-15% margin of error of safety.

If rates go up, these are utility type companies, and would be interest-rate sensitive. Likes this one. Has better growth prospects than other pipeline companies. Have a huge amount of growth coming on between now and the end of 2015. Really focused on growing the oil sands side of the business. Positive on the name, but you want to be careful getting into it after the run it has had.

Sees upside. Pipelines are a good place to be. This one is one of the better managed ones out there. He has been looking at it recently even though he owns TRP-T.

(A Top Pick June 4/13. Up 41.09%.) Historically, over the last 50 years, pipelines have been the best industry for return on capital. With the kind of volume growth out of the oil sands for the last number of years, this has been a great opportunity.

Excellent company. Steady as she goes. Dividends will increase. Has something like $3 billion of projects in the bag, and of course, the cash flow is coming from that. It has another $3 billion that it believes it can compete with the others quite adequately.

Has owned this for a long time. At this price, you could wait for a bit of a pull back. Provides an attractive yield, and definitely their cash flow and the projects they have in place can fund the dividend. Thinks they are going to increase the dividend by 5%-7% every year. If you are a long-term investor, she would scale in. There are days when the market is weak and you could pick it up at little cheaper.

This has everything investors want, but they are pricey. Great company with great growth prospects. Their growth prospects are better than a lot of others because they only operate pipelines within very friendly jurisdictions. Low volatility of cash flow. Lots of growth opportunities. Yield of 4.1%.

(A Top Pick May 29/13. Up 32.97%.) When we are talking about any interest sensitive stock, you have to take a very hard look at what interest increases will be. Stumbled recently. Had a storage business in Denmark and the UK and of the 4 storage terminals in Denmark, one sits empty. Have plans to capitalize on $3 billion of opportunities on the oil sands pipeline expansion. Looking at potential cash flows per share, he could see an additional $2.50 and they will distribute a very generous part of that to shareholders. His target price is $33 in 12 months. Yield of 4.26%.

Has had a terrific run lately and he had to trim because it became too large a position. There is still lots of room for this company to build pipelines and add volume to existing pipelines, largely in Alberta. Lots of growth and production in the oil sands and it has to get somewhere so this has a lot of CapX ahead. If you have a long horizon, you could step into this. It has a habit of running up 10% and then giving back some. Try to get it under $30, but you could buy it now.

This is the same as infrastructure companies having a great dividend and doing extremely well. Would continue to hold all these types of companies.