John O'Connell, CFAKeyera CorpKEY.TOPARTIAL SELLAug 11, 2014

Whole space is on fire. On valuation, a better place for new $$ than TRP.

Lots of tailwinds. Plains acquisition a positive. Not cheap at 18.3x PE, but growing 23%. A really nice story on PEG ratio. Going higher.

Cash flow and dividend are great. Add on pullbacks. It can pull back along with utilities. It grows consistently. 

The energy infrastructure space works really well here. There are some knocks against it. Not cheap. Integration risk with Plains assets. Lots of capex. Execution is key, including cost overruns. Moderately tied to commodity prices. 

Benefiting from:  Western Canada, LNG, condensate demand, Montney production growth. Lots of synergies, increased scale and LNG platform from Plains acquisition. Large backlog of growth projects. Lots of its fee base is not commodity-sensitive. EPS growth of 23%, dividend growth of 4%. Bit more expensive at 18.3x PE for 2028, but really worth it on PEG basis. Yield is 3.57%.

Plains acquisition has closed and been integrated, which really helps fuel growth through 2030. Purchased 50% interest in KAPS, accretive by 1%. Trading at 18x PE for 2028, growing at 28%. You can buy more right now.

Likes it at these levels.

The first name he'd be buying now. Beat last quarter. The Plains transaction is a catalyst. Cheaper than peers at 15.5x PE, growing 18%.

Main problem is the probe into proposed acquisition; intensity of the probe surprised him. Other issue is that it has some market-based exposure -- when oil price drops off, this impacts the stock. No longer a bargain.

If you own no energy infrastructure, worth a look. But if the deal doesn't go through, then what?

It seems that for the last 15 years, everyone has said that natural gas is going to be the play. But it's never really come to fruition.

It's "fine". This name is a bit more specialized to the gas sector. He'd rather look to the peer group -- ENB, PPL, and perhaps TRP. Other names have a longer track record and a better path to capital if they want to expand. 

Likes their stable cash flows, but they're not funding their 5% dividend from that cash flow. Concerned about their dividend, but you could do worse owning this.

Both really good, likes them both a lot. KEY has better growth now, but trades at a much higher valuation. GEI trades ~14x, with still a very good growth rate. 

Don't do stop losses for good companies that are paying you 6-7% to wait. You get stopped out, the stock starts to come back, and then when do you get back in? If it goes down 10-15% (which is very unusual), or even 30%, it doesn't mean the news flow has changed for a good stock. 

Midstream player. An infrastructure play, as it takes gas/oil from the E&P companies and delivers it to the pipelines. Marketing segment is volatile. Big miss in results this morning (or last night). Long-term chart shows a great story. Energy infrastructure in Canada is a nice place to be.

Huge supply of gas, so price has been depressed. Likes nat gas as a transition energy, and likes the mid-streamers like this one. Transportation, storage, blending, etc. Had gotten offside in marketing, but they have a handle on that now. He'd buy on this dip. Big yield over 5%.

Sees it going further. Likes it. Pays attention to its balance sheet and grows its cashflows. Some are concerned about % of revenues from marketing business. But with the Plains acquisition, marketing exposure is hedged. Very solid management, good growth opportunities. Hold, with no problem buying here.

A higher-quality player that you could put $$ into today.