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Fortis Inc. (FTS $68.14)
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Emera Incorporated (EMA $64.87)
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Brookfield Infrastructure Partners L.P. (BIP.UN $43.13)
Q: Confused by the reaction of these 3 names. EMA/FTS up materially and BIP.UN down so far this year. Thoughts on why? Also on EMA with a 29% return YTD the stock must be stretched. Would you suggest a switch to BIP.UN?
5i Research Answer:
The electric utility companies seem to be getting an 'AI-demand' premium which does not seem to be extending into BIP and some other infrastructure companies. But missing Q2 earnings estimates doesn't help, either. We do not like to sell what's working, and EMA at 19X earnings we think is 'reasonably' priced. We like BIP here but would not really strongly endorse a switch, and would be even less interested if taxes apply to EMA.