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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hi Peter & 5i: Regarding Just Energy’s (JE) “sale” of Terra Grain Fuels, the debt reduction aspect looks positive, though only a relatively small percentage of JE’s total debt. Can you tell though what JE will be losing in cash flow or EBITDA associated with Terra’s operations? Does a loss of cash flow offset the debt reduction in this case or was Terra not significantly cash flow positive on a net basis to begin with? Does this transaction impact JE's "embedded margin" valuation on the balance sheet at all? What is your overall significance assessment? Thanks very much!
Read Answer Asked by Lance on December 17, 2013
Q: In regard to your notes on Just Energy on Nov. 27 I have been tied in to them for five years for gas at 36.9 cents a cubic meter. On renewal they highly promoted the savings that you would get at their new rate of about 25 cent a cubic meter

However they did not tell you that the rate from the gas company was 12.49 cents a cubic meter now and not far off for a lot of the time I was hooked into them.

Now I should be paying about 1/3 of what I was paying

Obviously I did not renew with them. If other people did their homework, there would be a lot more non renewals. This may affect their earnings
Read Answer Asked by Ernest on November 30, 2013
Q: Hi Peter & 5i: When I asked (July 18) my last question about Just Energy’s (JE) run up from $6.15, I was not aware that Jim Pattison had just filed (July 10) an SEC disclosure that, between him and Jim Pattison Ltd, he had beneficial ownership of approximately 10.8% of the common shares in the company. I am wondering about the potential significance of this development. I imagine there would have been significant due diligence prior to the share acquisitions. Is JE something he could look at taking private? It is still trading with a yield over 11.5%. That is quite a lot of cash flow that could be directed toward paying down debt in a private ownership scenario. Also, for a fixed income holding, its 2018 5.75% convertible debentures (JE.DB.B) are available for not much more than 70 cents on the dollar. That’s a yield of around 8% while you wait for the 25-30% capital gain on redemption. If nothing else, wouldn't Pattison’s investment be a decent vote of confidence that the company isn’t going under anytime soon? What do you think?
Read Answer Asked by Lance on August 06, 2013
Q: Hi Peter & 5i: Since closing at $6.15 on July 5th, Just Energy (JE) has closed higher than the previous trading day’s close every day through yesterday, and now may be pausing at around $7.50. The move doesn’t seem to have been fueled by any news that I have noticed. Could it be primarily a short-covering rally?
Read Answer Asked by Lance on July 18, 2013
Q: Just Energy continues to drop like a rock, and it's technicals (none of which I understand) are also gloomy. Their year-end results come out this Thursday, and if it's a negative report, I presume it's price will drop even more. How safe is their dividend, and how safe is this company as a whole? Sell, or hold on? Many thanks for this great service. John.
Read Answer Asked by John on May 14, 2013
Q: On April 8th, I bought Just Energy (JE) for $6.93/share. At the time I thought the purchase was (iffy) but did so on the basis that 5 insiders had bought a total o 118,272 shares at prices ranging between $6.78 t0 $8.49 during February and March. I am down on my investment and do you think I should sell or hold on? Thanks, Bill
Read Answer Asked by William J on May 13, 2013
Q: In answering Maida's question "was short selling putting downward pressure on JE?" you noted that there were only 7.8 million shares sold short. On BNN yesterday when interviewing Andrew McCreath, Andrew made the point that when you include the US exchange that 30% of the float (issued shares less insider owned shares)had been shorted.

Given the current dividend, isin't this an expense stock to short? Might the shorts get squeezed, especially if JE ramps up its share buy-back?
Read Answer Asked by Douglas on March 26, 2013
Q: Hi 5i team, as someone not versed in the niceties of accounting, I have difficulty understanding both sides of the argument in the article in today's Globe's ROB on Just Energy's EBITA statements. Is this something like life-insurance companies where it is difficult to account for things happening going into the future? Please do enlighten. Thanks Henry
Read Answer Asked by Henry on March 07, 2013
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