Altagas Ltd
ALA-T
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About Altagas Ltd (ALA-T)
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Spin-off announced today. Markets didn't like their big US acquisition, so they are spinning off Canadian assets. The spin-off is the right strategic move, but it doesn't interest him to buy the stock. They're making up for past mistakes.
Announced a spin-off yesterday. He used to own it before they bought WGL. ALA is selling the family jewels to afford it. (He sold to get more pro-cyclical exposure.) He dodged a bullet. This is a debacle of corporate governance. The WGL deal took too long to close, expensive, levered up their balance sheet and got put on credit watch. Now, they're selling non-core assets. He has no confidence in the management and doesn't know if the dividend is safe.
Announced a spin-off yesterday. He used to own it before they bought WGL. ALA is selling the family jewels to afford it. (He sold to get more pro-cyclical exposure.) He dodged a bullet. This is a debacle of corporate governance. The WGL deal took too long to close, expensive, levered up their balance sheet and got put on credit watch. Now, they're selling non-core assets. He has no confidence in the management and doesn't know if the dividend is safe.
They did a big acquisition of a utility in the US and financed it with an equity issue and a bridging loan. They are making asset sales to repay the bridge loan. Of the 2 billion that they had to sell, they have sold off about 1.5 billion of assets so far. They expect to complete the asset sales by the end of the year. She expects them to be able to sustain the yield. She does not see much near-term growth. However, the company is still a little more leveraged than it would like, and it might offer more hybrid securities or do another equity offering to reduce its debt. She expects the completion of the asset sale process to be a positive on the stock. Yield 8.8%.
They did a big acquisition of a utility in the US and financed it with an equity issue and a bridging loan. They are making asset sales to repay the bridge loan. Of the 2 billion that they had to sell, they have sold off about 1.5 billion of assets so far. They expect to complete the asset sales by the end of the year. She expects them to be able to sustain the yield. She does not see much near-term growth. However, the company is still a little more leveraged than it would like, and it might offer more hybrid securities or do another equity offering to reduce its debt. She expects the completion of the asset sale process to be a positive on the stock. Yield 8.8%.
They sold off a bunch of assets today. The market is expressing sustainability of the dividend. It has gone up today as a response, however. Gas shares tend to do well this time of year. Today's action is positive. This is not a bad investment at this time.
They sold off a bunch of assets today. The market is expressing sustainability of the dividend. It has gone up today as a response, however. Gas shares tend to do well this time of year. Today's action is positive. This is not a bad investment at this time.
Acquisitive and have grown quickly, which makes him suspicious if they don’t have a competitive advantage. Cash flow doesn’t cover the dividend. If one acquisition goes wrong, the dividend will be cut.
Acquisitive and have grown quickly, which makes him suspicious if they don’t have a competitive advantage. Cash flow doesn’t cover the dividend. If one acquisition goes wrong, the dividend will be cut.
They are not even making their dividend. There is a reverse compounding thing going on where your book value is being eroded. It is a losing proposition.
They are not even making their dividend. There is a reverse compounding thing going on where your book value is being eroded. It is a losing proposition.
Subscription Receipts. (A Top Pick Sep 20/17, Up 2%) It was subscription receipts but now is just common stocks. They had a troubled time period after the deal because they took on more debt. The yield is about 8% now. The debt levels are high, however. He hopes they will generate free cash flow now and will pay down debt with it.
Subscription Receipts. (A Top Pick Sep 20/17, Up 2%) It was subscription receipts but now is just common stocks. They had a troubled time period after the deal because they took on more debt. The yield is about 8% now. The debt levels are high, however. He hopes they will generate free cash flow now and will pay down debt with it.
Has had some problem with this name. Need to figure out how to pay for the recent acquisition and divest assets. Cash flow from operations needs to sustain the dividend. Good at these levels, as dividend quality is still strong. (Analysts’ price target is $28.75.)
Has had some problem with this name. Need to figure out how to pay for the recent acquisition and divest assets. Cash flow from operations needs to sustain the dividend. Good at these levels, as dividend quality is still strong. (Analysts’ price target is $28.75.)
He used to be big owners of this company. The 10 year yield started to take off after Trump was elected. They are levered quite high and therefore difficult to raise yield. They have a huge debt load and the cost of carrying that debt will go higher. It is in a difficult place in the market. Dividend should hold over the mid to long term.
He used to be big owners of this company. The 10 year yield started to take off after Trump was elected. They are levered quite high and therefore difficult to raise yield. They have a huge debt load and the cost of carrying that debt will go higher. It is in a difficult place in the market. Dividend should hold over the mid to long term.
Is watching it. Good yield, but tied to Alberta economy. With the pullback recently, hold onto it for now.
Is watching it. Good yield, but tied to Alberta economy. With the pullback recently, hold onto it for now.
ALA-T vs. TOG-T He hopes oil prices move up, but the problem with many energy stocks is that they are already properly priced, including ALA-T and TOG-T, so there's little upside. He's neutral about both stocks and this sector.
ALA-T vs. TOG-T He hopes oil prices move up, but the problem with many energy stocks is that they are already properly priced, including ALA-T and TOG-T, so there's little upside. He's neutral about both stocks and this sector.
Altagas versus Vermillion. VET-T is oil with some exposure into France and a little expensive. ALA-T has been beat down on the recent acquisition in Washington. Depending on your outlook on energy, ALA-T will act more defensively. But if you believe in $100 WTI, then he would go with VET-T.
Altagas versus Vermillion. VET-T is oil with some exposure into France and a little expensive. ALA-T has been beat down on the recent acquisition in Washington. Depending on your outlook on energy, ALA-T will act more defensively. But if you believe in $100 WTI, then he would go with VET-T.
He added a bit recently and he has held it for a long time. The reason he bought more is that he's entering the Alberta economy a bit--Canadian oil is ridiculously cheap. The dividend, over 8%, is sustainable, and it gives him some cash flow.
He added a bit recently and he has held it for a long time. The reason he bought more is that he's entering the Alberta economy a bit--Canadian oil is ridiculously cheap. The dividend, over 8%, is sustainable, and it gives him some cash flow.
He likes it. It is a good utility company. It pays a good dividend yield. They just finished up a good transaction and it should be accretive to earnings soon. They sold off some assets that were not contributing to earnings.
He likes it. It is a good utility company. It pays a good dividend yield. They just finished up a good transaction and it should be accretive to earnings soon. They sold off some assets that were not contributing to earnings.
Their recent earnings were mixed. Now that the acquisition of WGL is now closed, things should become more transparent. They were sold off with the concerns of rising interest rates. It is looking much better and is a good investment now.
Their recent earnings were mixed. Now that the acquisition of WGL is now closed, things should become more transparent. They were sold off with the concerns of rising interest rates. It is looking much better and is a good investment now.
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Spin-off announced today. Markets didn't like their big US acquisition, so they are spinning off Canadian assets. The spin-off is the right strategic move, but it doesn't interest him to buy the stock. They're making up for past mistakes.