Post says opportunity seen in Pembina, other pullb
Post says opportunity seen in Pembina, other pullbacks
2013-06-05 09:19 ET - In the News
Also In the News (C-BEP) Brookfield Renewable Energy Partners LP
Also In the News (C-ENB) Enbridge Inc
Also In the News (C-NPI) Northland Power Inc
Also In the News (C-TRP) TransCanada Corp
The Financial Post reports in its Wednesday edition rising bond yields are spooking some yield-oriented investors. The Post's Jonathan Ratner, writing in Trading Desk, says stocks in the pipelines, power and utilities space have declined nearly 10 per cent since May 21, 2013, but at least one analyst sees this as a buying opportunity. Juan Plessis at Canaccord Genuity, upgraded several names to buy from hold given their now greater potential returns. They include Brookfield Renewable Energy Partners, Enbridge, TransCanada, Pembina Pipeline and Northland Power. "We believe that investors of yield sensitive stocks in the pipelines, power and utilities sector have responded to the increase of long-term Government of Canada bond yields," Mr. Plessis told clients, noting these yields have risen 28 basis points since the beginning of May. The analyst also pointed out that relative to their historic relationship to long-term government of Canada bond yields, utility earnings and dividend yields are undervalued. He said they appear to be reflecting a long-term government of Canada bond yield, or a proxy for a risk-free rate, of around 4 per cent and Mr. Plessis sees "a significant cushion" in rising long-term yields.