Investment Q&A

Q: The EPS of Altagas for 3/18 is shown on your "companies" chart at .38, whereas you had stated to Jason on Mar 1 re his question on ALA results that the EPS was in line at .36, wouldn't that be a miss? The EPS for ALA for the next quarter (6/18) is shown as .14, why the big drop, is the falling cdn$ and rising interest rates going to cause any problem for ALA carriage of debt?

Q: Hey 5i,
My question is about what kind of upside remains in CRH after its bounce off the bottom? Any idea of a target price and is it even possible to reach the high prices of the past?
That said AltaGas has tanked and am wondering if I am better served selling CRH and getting some ALA. do you think there is big upside there? And they are going to more utility then pipeline after the acquisition? Thanks

Q: Hi,
Please comment on price action after their earnings. Did they all miss?
Deduct as required. Thanks.

Q: Could you comment on the ALA results?

Q: please give your valuation & opinion on the sustainability of the dividend

Q: The spread between ala and ala.r has widened a little recently. Is there any word, or rumour out on their merger proceedings. Thanks.

Q: This is not a question, but rather a comment on your statement that ALA.r distributions are mostly income for tax purposes. That is incorrect. It is mostly ROC. ALA put out a link to the month-by-month income vs ROC for distributions in 2017 here:
https://www.altagas.ca/sites/default/files/2018-02/Subscription%20Receipts%20Taxation%20Information.pdf

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RE:
Asked by Rajiv on February 14, 2018
5I RESEARCH ANSWER:
Utility and income stocks are not having a good year at all, on fears of higher interest rates. ALA is down 9% YTD. But we have no particular worries on the company itself and do not see the dividend at risk. As 'part' of a portfolio designed to generate income, we would be comfortable with it. Note the receipts pay interest income (for tax purposes).

Q: Hi Peter I am looking into buying ala. or should I look into ala.r. .can you please explain how will ala.r deal end in September 2018. Is your $31.00 safe if the deal does not go through. Thanks. Alnoor

Q: Hello
A few months ago I had asked you about going overweight with Crius Energy as a means for covering margin interest. It has worked well for me so far. I do have anear full position in Altagas subscription receipts ALA-R. At today's prices, would you recommend going overweight here as well so as to cover some margin interest?

Q: all of these holdings are between 1-3%...financials i hold 13% with energy next largest at 6%...yet all of these are hitting 52 week lows...which would you consider dumping if any...yours truly dazed and confused...

Q: Hi 5i Team,
I own positions in IPL, ENF, KEY, ALA, and PPL. I am a long-term income investor who (like many) is a bit disappointed with the relative (to the market) decline in the share prices of these companies. All of them have been good at growing their businesses, earnings, and cash flows, and dividends - cornerstones of my investment strategy. On a fundamental basis, I don't see anything wrong with any of them, and am inclined to stay the course, thinking the market will eventually reward these companies. I recognize that many of these companies carry significant debt (at low, long-term rates I would think, and not variable rates), and the current Canadian regulatory environment is a negative for the industry.
Can you poke any holes in my investment strategy with respect to these names?

Q: Is the dividend safe? Hold or sell....thanks

Q: SALES BY INSIDERS
I have seen some insider selling activity for the above noted companies. A few officers of Enbridge sold over 50,000 shares each in December. As well, I noted a few ALA directors sold over 15,000 shares each last month.
Do you view these insider selling activities as unfavourable?

On the other hand, another Energy company (IPL) had favourable insider selling activity, in my opinion, since there were only buyers and not sellers.

Q: I have been holding a full position in the receipts for about a year.
Should one stay the course or swap to .............?
Thanks

Q: Is ALA eligible for the dividend tax credit and do you still like it for a long term hold?
Thanks

Q: I would like an update on Altagas WGL Project. The upside for Altagas looks good to me , esp contract for shipping of gas to Japan etc.I like it. What’s the downside Thank you.

Q: I have a 20% overall weighting in above names. At 57 do you feel this weighting is excessive? Thanks!

Rob

Q: If you had ALA for a five year hold would you keep it or sell and buy Fortis? The difference in yield does not matter. Thanks Bill

Q: Has your view and rating of Altagas changed? Please note the 15 January 2018 presentation at the TD Securities London Energy Conference. The Q4 CC is slated for March 1 so you may prefer to delay your response until after March 1.

Q: I hold ALA common shares at a small loss (bought just under $30), and am surprised that it has not been able to get back up near the $31 receipt issue price. I am considering selling ALA and buying back the same number of shares as ALA.r, at a slightly lower price. Is it correct that if the deal does not go through, the receipts are cancelled at $31 per receipt, and if the deal does go through, the receipts become ALA shares on a 1 for 1 basis?

My thinking is that if the deal fails, then I have a capital gain on the receipts (including claiming the current loss on ALA), and if the deal goes through, I am essentially in the same position, whatever the share price. I guess the downside is that if the deal fails and the market really likes that, ALA common shares could go above $31. Am I thinking straight here, and do you have any comment on this plan or the potential market reaction to the deal failing.
Thank-you