Just Energy Group (JE.TO)

(A Short March 7/13. Down 19.71%.) Today this one is up 10%, so you give them credit for a good quarter. This is mostly due to the cold weather creating more gas consumption. They have 6X debt to cash flow.

Has lost a lot of faith in the company through the dip and some of the issues surrounding the company. Feels the dividend is safe at the present, but he would recommend you take your money and run at this point.

6% debenture maturing June 30/17? This bond has rallied in recent days by about $4-$5 in price. The company was able to redeem their Sept 30/14 bond ahead of time and reissue another bond. However, he would recommend selling. Feels the company has a number of issues. Take advantage of this recent rally.

(A Top Pick Sept 18/13.) (Pairs Trade: Long Enercare (ECI-T) and Short Just Energy (JE-T)) Have some lines of credit that are coming up. When a company cuts its distribution, it is never management’s idea, it is always the bankers. Feels that when the lines of credit are rolled over, in January/February, it is a very likely possibility distribution will be cut.

Payout has been in excess of 100% which is not sustainable. A lot of analysts are projecting that next year the payout should drop to below 100% with the possibility of it dropping to 65% in a few years. Still a very high level. Last few quarters have not been great. He prefers Enercare (ECI-T).

Door-to-door sales, electric contracts, etc. is not a business model, he feels comfortable with. It’s a tough business and has too much volatility in it. 11.2% dividend yield seems high.

Lost confidence in its investor base over the last little while. Put up a decent quarter last quarter and he imagines they should be able to get their margin and cash flow targets for the year. Seem to be getting support from the financial community.

Not a fan of their business model. Wouldn’t treat this as a long-term investment. Chart shows an ABC correction and the last wave was subdivided, so you may have a low at this time. If you get some strength, he would start reducing as it moves back up. 12% yield.

This company is in some trouble. The dividend yield of 13% is not sustainable. With falling and flat natural gas prices, the incentive to lock up those long-term contracts, in these last 2-3 years, just hasn’t been there.

Pattern has been really ugly for the stock. It is trying to put in a base. Highs are more or less at the same level and the lows are finding support at around $6. It might trade within this range. Watch for a breakout. If it drops below $6 it is in trouble. If it breaks above $7 along with volume, you might want to own it.

Yield of around 13%. Basically the market is saying they need to cut that dividend, probably in half, to get it competitive with higher yielding stocks. Longer-term, he thinks this model might be broken. Their main business was selling natural gas door-to-door and that was great when natural gas prices fluctuated from $2 to $5 and you could lock in a reasonable rate. Now there is a lot of gas around and prices are cheap.

(Market Call Minute.) Doesn’t like the business model, the derivatives and the balance sheet.

(A Past Pick Nov 28/11. Down 7.3%.) 6% Convertible due June 30/17. (BNN showed this as a Top Pick Aug 2/12, but our records show Transalta (TA-T.) was the Top Pick Aug 2/12. – Bill.) This was really a parking place as an alternative to money market. Dividend yield is now 11.2% so there is concern it may have to be cut again.

Has been caught in the last couple of months on the downdraft, negative publicity and the dividend got cut. Still trading at relatively high yield so it begs the question if the dividend was cut enough. A decent business. Operating guidance is doable this year but there is an issue of capital allocation. Dividend should be ok in 2014.

Weary of safety of dividend. One-time adjustments are used to manupilate cash flow because of the derivitives they use. 9.5 times cash flow but he is not a fan of the business model.