Post by
rustyblades on Jan 12, 2023 11:47am
No need to rush back in
No need to rush back in. The stock price has only two directions at this point. Flat or down. A 40% dividend cut needs a 67% raise to restore it to previous levels. This won't happen over a short term. Once the dividend is cut the climb back up is slow. A 10% dividend raise per year will take 5 years to reach pre-cut levels and you can forget about a dividend increase until the capital requirements of the KP modernization (if the deal goes through) are completed. So probably 7 years before the old dividend level is reached.
They issued equity to partially fund the KP takeover. This new equity generates no revenue but collects dividends. Now they plan on selling $1B of revenue producing assets which even with interest expense savings from debt reduction will still reduce cash flow.
Why buy this one at these levels with no possibilty of dividend growth for several years when solid companies like TRP, ENB and some of the banks are yielding 6% all with dividend growth. I'll look at it when it gets below $7 CAD but only if the KP deal gets terminated.
Comment by
blackhawk2003 on Jan 12, 2023 11:54am
All you shorts could do, is bring it down 60 cents, I'm very disappointed! Great company, huge potential. The big boys will be cashing in, soon.
Comment by
DeanEdmonton on Jan 12, 2023 12:25pm
rustyblades- I agree completly. I too bailed just as soon as the deal was announced. I had not expected this big a rip in the share price but you could see it wasn't going to be good. I bought ALA very near its bottom in late 2018 early 2019 and that has worked out well, but they sure never got completely back to their pre-stupidity highs.