Investment Q&A

Q: Just a comment about ALA's changed circumstances. During the conference call management made reference to changed circumstances in relation to access to capital and cost of capital for funding its growth plans. In addition to changes in interest rates over the past couple of years, a significant aspect of the capital equation is that its share price has basically been halved since the announcement of the WGL transaction. Recourse to capital through an equity raise would likely further reduce the share price and have a relatively greater dilutive effect on per share earnings and cash flow than it would have had when the share price was $33. The result is that the answer to the question of what is the most prudent means for the company to raise money has shifted. Though it's market cap is around $4.5B, according to the Q3 balance sheet ALA has about $23B in assets against about $12B in liabilities. Under those circumstances, if it can get anywhere close to 'value' for its assets, its cheapest access to capital by a longshot is simply through the monetization of some of its own asset base. If it can create further increased value by reinvesting that capital in its preferred growth projects, that can still be a very attractive proposition and set the company up well for the future. But in the meantime, the resulting reduction of the asset base for funding purposes will mean that it will have diminished cash flow from operations, and it is that cash flow that is required to pay/maintain/raise the dividend. As a long-time shareholder, I have taken a significant loss on my ALA exposure but I don't think there needs to be recourse to suggestions of fraud to explain the circumstances that the company has come to today. My view is that ALA may well rise again and be successful but that it would be further in the future than I had been looking for, there will probably be a (prudently) reduced dividend in the meantime, and the present market conditions are setting up better near-term opportunities elsewhere for loss recovery and profit, through companies that are not in the doghouse when the market comes definitively out of its corrective phase. ... for what it's worth.

Q: Can you please tell me how much stock the company insiders hold in AltaGas?

Q: Hello,

I’m attempting to make sense of the current ALA situation. For months, the market has been suggesting that the ALA dividend is in trouble, as the yield continued grow. With this in mind, in September I asked my financial advisor if a cut was probable, and he replied that it was more likely that the dividend would increase rather than be cut, and that ALA should be ok for my income portfolio. Now, less than two months later, he’s stated that a cut is probably on the way.

I’m confused. Did ALA hide information (which has now been revealed) ? If the answer to this is “yes”, then I can understand how people have been hoodwinked. If ALA did not hide information, and the share price had been signalling trouble, I am tempted to say goodbye to this advisor and move my money, as this has cost me a substantial sum.

Did ALA hide information from the market that you are aware of ?

Q: Hi Guys: I hold an Altagas Preferred (ala.pr.e) which is down significantly over the last year. I hold it principally for the yield so I am not too bothered by the drop, unless of course I begin to believe that the company will have to default on its debt obligations. This seems (to me at least) a pretty unlikely scenario, notwithstanding all the current drama with its debt and stock price etc. Please give me your opinion in this regard. With thanks, Don

Q: TD has forecast a 60% dividend cut. This seems a little draconian. Would you agree that there will be a near term dividend cut? And would you agree about the percentage of the cut?

Q: Good morning,
I sold the above in early October to capture tax loss, and can rebuy next week. Are there any among these 4 that you would pass on for now.?
Thanks for the hand holding.
Ted

Q: Hello,
The ALA.PR.U preferred has fallen like all other ALA shares.
If they cut the dividend on the common, could they just as easily cut the dividend on the preferred?
My intentions are to generate USD income and still take advantage of the dividend tax credit.
Would you suggest I hold off from averaging down?
The yield (in USD) is appealing. Thanks

Q: What do you think is the reason for the disappointing results from ALA? I have been holding for a long time and down 40% now!

Thanks for your insights.

Q: G&M reporting that the Pres and CEO of Alta Gas sold 22,750 shares on Oct 9 @$21.01
This brought his total ownership down to under 3,000 shares. This should not be legal, given the forthcoming results. Can the OSC not do anything about this?
P.S. Not a case of sour grapes here. I was not a player of ALA. I just find the company's behavior, and this insider sell in particular, inexcusable. How can this sort of thing foster public confidence in our market?

Q: A do not have a position in Altagas. Would this be an opportunity to buy low? I figure most of the revenues must be long term contracts, so downside should be limited at this point. It would be for my RRSP, for income (long term). Thanks.

Q: Here's another question on Altagas. On the CC, management indicated that they are going to re-evaluate the proper dividend rate (payout ratio) for the company given the new mix of assets. I'm assuming this is code for "we're cutting the dividend". Your thoughts?

Thanks,
Peter

Q: Do you think at this point if they cut the dividend to a more reasonable 5 or 6 percent that this would help the stock price

Q: long term view on AltaGas in your experience is this a sell or

Q: After the disappointing ALA results would you "throw in the towel" or just hold at this point?
Thanks

Q: Given your response to Jason today, about ALA: "ALA missed results by a pretty wide margin...." A question on many investor's minds would be this: How well covered is the dividend. Do you think the dividends, and dividend increases are at risk?

Q: your comments on the recent earnings and the sharp decline. thanks.

Q: Further to my previous question on ACI, as the company holds Cdn drop down pipeline assets of ALA would you generally view the dividend as more secure than ALA’s? Also, how would you compare ACI vs RNW in terms of dividend security and growth profile as both are Cdn drop down companies. Which is more attractive? Thanks.

Q: Is there a risk of bankrupcy for altagas , considering the various uncertities ,and the constant downward evolution of the stock ?

Q: I am a current holder of Altagas The manament is spinning out Canadian operations
Could you please explain how existing shareholders are affected Will they get any shares in the Canadian operations

Thank you

Paul

Q: Is there a recent report on AltoGas ALA-t?