RE:How to calculate the premium or discount on ENS or any Split Just one observation- as the preferred's have a fixed stated redemption value, their claim on the ENS assets can neither exceed their stated value nor decline below that value regardless of the momentary market pricing for the preferred security.
I treat them as the financials- a straight liability claim on assets based solely on their consolidated disclosed stated value.
bbzzzz wrote: Splits are marketed as a whole unit comprising a preferred share and an equity share together . This happened just recently with the new ENS offering ( P-@ $9.80 and E @ $12.55 ) .
As we all know the values of both fluctuate with market conditions relative to the nav of both the preferred and equity units .
When calculating the premium or discount on ENS i feel one must use both the preferred and equity values for the nav and the market prices . Today the nav for both is $21.22 and the market was $21.97 - a difference of .75 c , therefore the premium would be 3.5% . The preferred share traded at a discount to the market price , $9.80 market to nav $10.17 . This offset the premium in the capital shares , $12.17 market to $11.09 nav .
Using both gives one the complete unit split value and i feel it is more representative of the value to market for the whole Split .
Using just the equity values gives you a 6.76 % premium but does not account for the preferred share value of the split . As we see many would rather own the preferred shares and place greater value on them for their portfolio . Therefore i conclude that both values should be used as they are sold and marketed to calculate premiums or discounts .
Both premium values ( however you calculate them ) in my opinion present good value for the capital shares of ENS , depending on your view of ENB . I feel the new offering has allowed the market to revalue ENS - it has come back to reality .
Go ENB .
( i hope this keeps the conversation and blood flowing on this Split )
Ted