Inter Pipeline (IPL.TO)

Going through the motions of changing to a corporation but it hasn’t been approved as yet. He has this one in his model portfolio. This is just a pure, nice income stock. Fairly expensive. Has performed really, really well over the past 5 years so the price earnings ratio is pretty high compared to some of the other names in the group. Dividend is pretty good but probably hasn’t been raised as much as some of the others. Nothing wrong with this one.

Paying a fair chunk of money to bring the management in. Has liked it for a long time. Likes the business and the way they are doing it. Putting projects in place that will give them good long term growth. Focus on heavy oil industry. Doesn’t see trends changing in the near future and they will increase their dividend.

Significantly levered to oil sands development and TransCanada Pipe’s (TRP-T) announcement of the Energy East pipeline benefits this company as well because they have a number of pipelines that will take oil sands into the Hardesty. Should benefit through increased volumes, particularly through their Cold Lake pipeline. Have a couple of expansion projects that should see higher RRs as a result of Energy East. Recently announced a conversion to a Corp which will expand their investor base. Yield of 4.90%.

This is a good risk to reward ratio. About $21.50, it is hugging an average. This is a good place to be.

(Market Call Minute.) Pipelines should continue to do well as there is a lot of oil/gas in North America.

Outlook for pipelines is improving. Well managed company and finally converting to a corporate company. Likes longer term outlook on pipelines.

(A Top Pick July 24/12. Up 22.96%.) Superb management and have signed 2 long-term contracts (15-20 years). This is going to accelerate earnings growth and cash flow growth over the next 5 years or so. Looking at the proceeds from these 2 new contracts, he can see another $7 being distributed over the next 5-8 years. He also likes that they are converting from an LP structure to a corporate structure which will allow all the global index funds to participate.

(A Top Pick June 8/12. Up 25.65%.) Good company and well managed. They made the right decision to focus on the oil sands. Have a multitude of pipelines carrying different products. With the new technology in Alberta, they have been able to increase production in the number of their historical fields. Good long-term prospects here. Good dividend.

(Market Call Minute.) A really solid name.

Has sold down his holdings of Inter Pipeline Fund (IPL.UN-T), TransCanada Pipeline (TRP-T) and Enbridge (ENB-T) in the last 6 months out of fear of the impact of higher longer-term interest rates might have on the valuations. They are now getting back towards buying range.

There is nothing happening to the company itself. Pipeline stocks in general have corrected because of rising interest rates. A lot of people have made money on the stock so you’re just seeing people taking profits. Likes their distribution and their growth profile. They have projects in place, primarily in their oil sands transportation system that will improve the cash flow going forward. Expect the distribution will continue to increase over the next few years. They are converting into a corporation which she feels is positive.

With the exception of this one, pipelines as a whole seem to be trading at pretty high multiples given their growth outlook and are sort of quasi-interest plays. This one trades at a lot better valuation than others. You also have the added bonus that the yield is going to be converted to a dividend soon.

Stock had a weird fall a couple of days ago because of mispricing. This has been a great story and has run up a lot. Like all stable companies, it had a great yield and plugged along really nicely. Feels that people are worried with interest rates going up, which has caused a pull back. Well-run.

There is no good value here. $17 model price. 22% downside. Pipes, Utilities, Telcos are very expensive here. Gold stocks are really, really cheap. There is a rotation coming here.

It is hard to justify the valuation levels, especially if interest rates go up. He sees positives, but he is waiting for it to come down more.