RE:RE:RE:RE:RE:Vote against the managementI agree that management is solid here, I am happy to see them focusing on sustainable growth/transition they have been doing. In terms of valuation method with capex heavy businesses, I prefer to look at EV\EBITDA as this factors in the debt load. I also look at market cap to levered free cash flow which is another useful metric. When I bought Capital Power 6 months back at under 30 dollars/share, it really seemed obvious that they were undervalued when comparing them to a half dozen Canadian utilities.
Even today for example, Fortis has an EV\EBITDA of 13.53, levered free cash flow of minus 2 billion while Capital Power is at 9.33 and levered free cash flow is over 400 million - so on a relative valuation assuming Fortis is fairly valued, then Capital Power should be 55+. You can repeat the process with others like Emera, Canadian Utilities, Northland Power, etc.
On qualitative side, they have some growth,and are doing a great job in transitioning to being green. They are going to be off coal in 2023, have renewable projects, nat gas plants will have carbon capture and be hydrogen ready, their C2CNT tech could have some upside, etc.
I think that Capital Power has been in the process of getting rerated and will be seen as an ESG play, multiples will keep improving until it is no longer lagging other utilities. I expect it is very possible that I will have a double on my cost, possibly within 3 years..
My 2 cents.
SargeX wrote: Hey Dil
Great to hear. Just my view, but what I've found is that it is better to just take the capital gains hit if it fits your plan.
Agree with you on the divy being solid and should keep increasing. As I've said, I'm quite impressed by the CPX management and am a happy long term holder with some short term trades with some of our extra cash.
Take her easy
Sarge
dileas48s wrote: All good Sarge. Working on rebalancing the portfolio a bit while trying to avoid triggering capital gains. Dividend Income up 12% so far this year.
As for CPX I tried trading it a couple of times without great results, but now hold 1,000 shares long.
Dividend here looks safe and I suspect they'll increase it over time so that's what I'm here for :)
SargeX wrote: Hey Dil
How she go? How's all the investments doing?
Don't waste your breath on this "Canadian" guy. He's been going on and on for a few months on how CPX 's stock price should be at least $70. Then on the other had he's been going on about how bad the CPX management is. I actually think they've done a masterful job transitioning from Alberta coal to other business segments.
The guy doesn't have a clue. I got into it with him back in Feb befre deciding he's just an idiot. :-)
Take her easy
Sarge
dileas48s wrote: I don't understand the comparison with AQN. Yes, Algonquin does have a small percentage of their business related to energy generation, but a huge aspect of their business is in the local distribution utility business. They own multiple businesses across the U.S. to read, bill and collect on local utility customers - just like a Toronto Hydro, or a Veridian (two examples from Ontario). None of that portion of their business has anything to do with generation or transmission.
canadian wrote: Vote against the management. The management does not buy back shares. Very undervalued compared to AQN.