Opinions
James Telfser
Veresen Inc
VSN-T
COMMENT
Jan 12, 2017
Stock price when the opinion was issued
You might be interested:
Pembina Pipeline (PPL-T) acquired the company. Keep the stock or Sell and take profits? Pembina is not just a pure pipeline, but does have some oil interests as well. Chart shows a little bit of overhead that we have seen since 2015. There are a number of people that remember what they paid and will want their money back. We are getting close to that level. The chart is taking a slightly rounded look to it. Between the fact that it definitely has some technical resistance in the low $40 he would be tempted to take the cash. On the other hand, if you are interested in the dividend, it is a perfectly fine income stock. He wouldn't buy any new stock.
(A Top Pick March 22, 2017. Up 39.87%). Last March, people were very concerned that the company was in trouble and might cut the dividend. He saw it as undervalued and a great takeover target, and loaded up the truck at $8-$9. He still sees it as a good target. Pembina has now bought the company.
Just looking at the numbers, you might think the dividend is not covered and that they have a lot of debt on the balance sheet, but a lot of this has to do with timing. They put a lot of new projects in place. Has a big joint venture with Encana (ECA-T) that is going to come on stream in the next couple of years. Management feels very certain that they are going to sell their US power plant assets, which will create another big cash flow inflow for them. He is not worried about the balance sheet. The dividend is well covered. A very attractive stock to own on the dividend growth side.