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Peter BriegerTransalta Power LpTPW.UN.TOSELLSep 26, 2006

There are more stable companies elsewhere.

Peter Brieger

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$7.76

Stock price when the opinion was issued

electricalelectronic

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BUY

CPX vs. Transalta They're transitioning away from coal to natural gas, wind and solar.They've executed extremely well, but he prefers Transalta for its valuation--and Brookfield could buy Transalta. Both companies are well-run.

HOLD

With its yield of 10.3%, he would hold on to it. Feels they will recover. They fall massacre was a bit of an overreaction. If interest rates are cut, high-yielding interest holdings could have another leg up.

HOLD

Payout ratio is very high, which is a concern. Just announced a partnership on a new power plant. Demand for power is growing. Buy for the dividend, but not for growth.

WATCH

This is a trader that you trade from $7 to $8.

BUY

Have great assets, but some of them are a little bit out of the money. If you can buy in the $7 range, it’s a Buy. If it goes much above $8, he would be a seller.

DON'T BUY

Has a number of natural gas coal generated power facilities. He is underweight the power trust sector. Sees risks in the natural gas fired facilities and the margins on these.

DON'T BUY

Might provide some attractive opportunities here and there. Have 4 generating facilities. The Ottawa one has a gas contract rolling off in a year and it cost them quite a bit to generate electricity. Market believes there will be a distribution cut. If you can get it in the low$7’s and sell it around $8, that is ideal.

DON'T BUY

He moved out of power trusts a few years ago and is starting to move back . Believes this company will have to start cutting distribution. Would avoid it. Recommends picking more stable names like Northland Power, Epcore Power and Inter Pipeline.

DON'T BUY

Some concerns about their gas supply arrangements for a couple of their facilities. Would prefer Northland Power (NPI.UN-T). Power trusts have been the worst performers in the last 10 years.

DON'T BUY

Power generation is very interest-rate sensitive. You are not likely to see distribution increases. Reported a pretty bad quarter.

DON'T BUY

A co-generation power trust. His concern is that their long-term gas contracts are going to be coming to an end over the next couple of years. Will they be able to convert to a higher priced in gas and sell their electricity. Too risky.

DON'T BUY

Fully valued. A high quality trust in power generation. Expect a coupon type of return, somewhere in the 7.5/8% range. Haven't done much in terms of acquisition. High quality assets.

BUY

Distributions should be stable. Comfortable with the long term contracts that they have.

HOLD

Its parent Transalta has a nice pipeline of assets that can be blended into the trust for growth. Distribution is stable. As linterest rates creep up, you'll see pressure on the unit price.. The recent spike occurred when it was added to the TSE. Could fall back a bit in January.

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Peter BriegerTransalta Power LpTPW.UN.TOSELLSep 26, 2006

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