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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: would you have any small to midcap names that are in wind power that stand to gain with the increase in investment in this area from Alberta and rest of Canada ?
Read Answer Asked by Brad on November 24, 2015
Q: I was looking at this preferred share innergex power 5.75% ser C perpetual price of $18.50 yield 7.77% and callable in jan18. Can you please explain the biggest risk with this type or security outside corporate risk ? Am i correct to assume that the yield of 7.7% is only until jan 2018 and the yield thereafter will be the terms of reset or is it a perpetual 7.7% ? Thank you

Read Answer Asked by Pierre on October 19, 2015
Q: Hello Peter & Co,
A follow-up on a fellow member's question on the subject. I too own BEP.UN and have noted your reference to NPI and RNW; but I am wondering if you had also considered Boralex BLX and Innergex INE.
Thanks,
Antoine
Read Answer Asked by Antoine on February 26, 2015
Q: 12:29 PM 10/6/2014
Hello Peter
I am principally interested in stable low risk higher-yielding stocks for my income portfolio as I depend on the income. I am thinking about taking a small position in one of the smaller higher-yielding Renewable Energy Utilities and am considering Capstone Infrastructure [CSE], Transalta Renewables [RNW], Northland Power [NPI], and Innergex Renewable [INE].

I see you rate both Capstone and Northland as C+, However the other two are unrated. Could you please give provisional ratings for RNW, INE, ENF, EMA, and TA.

I already own large positions [2% to 5% in each, totalling 28% of my portfolio] in these "Utilities" : BIP.UN, BEP.UN, PKI, ENB, ENF, EMA, FTS, PPL, and TRP. Is 28% getting too big? The rest of the portfolio is well diversified in Banks, Gold, Consumer, Infotech, Telecom, Industrials, and Oil stocks.

So my question is should I be "reaching" for yield by buying one of the 4 small renewables which may be much higher risk or should I be content with a somewhat lower yield and just add to one of the strong companies I already own?
Just what would you recommend [large cap or small cap], which one, and why?
Many thanks...... Paul K
Read Answer Asked by Paul on October 07, 2014
Q: As a fairly new investor (5 yrs) I haven't experienced a increase in interest rates and the effects on the equity markets. I hold a well diversified portfolio but I do have some power producers (ATP.to, TA.to, INE.to) I have read and heard the increased interest rates are detrimental to this sector. Do you have any suggestions on how to position a portfolio for the increase and would you sell any of these power producers? (I am not underwater on any of these stocks)
Read Answer Asked by Rob on August 22, 2013
Q: I am a long term investor looking for div growth with some capital appreciation. I took a position a few years ago in ZWU for the high yield. The yield has been decreasing and price is range bound. It is now at the high end of the range and am considering selling and taking a position in INE which looks to have some good growth (both capital and Div) in its future with new projects in the works. Your thoughts!
Read Answer Asked by Bruce on May 21, 2013
Q: Hi, I have significant holdings in renewable energy producers. Could I have your thoughts please on the following article in the globe..Thank-you.
"The possibility that Ontario’s highly politicized electricity market could face a perfect storm leading to higher power rates “is low but increasing,” warns credit rater DBRS in a new report.

The storm, should it occur, would be a concern to investors in power producers such as Algonquin Power & Utilities Corp., Innergex Renewable Energy Inc., and Brookfield Renewable Energy Partners LP.

The Toronto-based bond rater is worried that pressure could build for electricity rates to start rising by 10 per cent, due to the high cost of new wind power and other renewable sources coming on stream, unplanned nuclear outages, and the eventual recovery in natural gas prices from current depressed levels.

Should power prices start rising this rapidly, the firm says there is a chance the province would reintroduce a rate freeze, as it did in 2002, to the detriment of electricity generators.

“Electricity prices have only one way to go: up,” it concluded.

For power industry investors, the DBRS warning should be kept in mind. A worry for any company supplying power in the province has to be rapidly increasing electricity prices that lead to ratepayer protests and pledges by politicians to limit the pain. Under such circumstances, it will be difficult for companies to pass on costs, and profits will sink.

Here are the three most likely pressure points for prices, according to DBRS.

Going green is great for the environment, but it costs money. Coal fired electricity, the dirtiest power source, is available for about 3 cents per kilowatt hour, or the amount of juice needed to run simultaneously 10 light bulbs each rated 100 watts for an hour. Wind and solar costs more than 10 cents a kwh. Ontario is shuttering its coal plants and increasing its dependency on wind.

Natural gas, now cheap and plentiful, is another worry. Should prices again reach $6 per thousand cubic feet (compared to about $3.50 currently) rates would rise as much as 15 per cent because the province has a heavy reliance on natural gas-fired plants.

The province’s aging fleet of nuclear reactors could also cause trouble. Key pressure tubes used to move energy around in the reactors have a history of mishaps, in which case plants may need to be shut for more than two years for repairs. Should this happen, the province will be even more dependent on natural gas, which is subject to wild price swings."
Read Answer Asked by Gary on November 02, 2012