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Superior Plus Corp T.SPB

Alternate Symbol(s):  SUUIF

Superior Plus Corp. is a Canada-based distributor of propane, compressed natural gas, renewable energy and related products and services. Through its primary businesses, propane distribution and CNG, RNG and hydrogen distribution, it delivers clean burning fuels to residential, commercial, utility, agricultural and industrial customers. Its segments include U.S. Retail Propane Distribution (U.S. Propane), Canadian Retail Propane Distribution (Canadian Propane), North American Wholesale Propane Distribution (Wholesale Propane) and Certarus Ltd. (Certarus). The U.S. Propane segment distributes propane gas and liquid fuels primarily in the Eastern United States and California, as well as the Midwest to residential and commercial customers. The Canadian Propane segment distributes propane gas and liquid fuels across Canada to residential and commercial customers. The Wholesale Propane segment distributes propane gas and other natural gas liquids across Canada and the United States.


TSX:SPB - Post by User

Comment by Schussing56on Jul 26, 2024 6:50am
129 Views
Post# 36149349

RE:RE:Potential Risk of going to zero

RE:RE:Potential Risk of going to zeroThere are several factors working against SPB currently, in my opinion. Number 1 - unseasonably warm temperatures in jurisdictions where SPB operates so, they're not selling as much propane. Number 2 - market factors: in an environment of dropping interest rates, the place to be is bonds, not equities. All equities will be under pressure for the next couple of years. Number 3, and this is the big one - SPB's new management bet the farm on hydrogen (Certarus) but, Canada currently has no infrastructure to handle hydrogen. Yes, Trudeau has implemented new laws that, gas-powered vehicles may no longer be sold in Canada as of 2035 but, that is still 11 years away and, even after that there will still be a majority of gas-powered vehicles on the road for several years. Luc Desjardins had the right strategy for SPB. He signed a $300 million deal with Brookfield Asset Management (BAM) and he was using that money to buy up Mom and Pop propane businesses which he was integrating into SPB's business model. He was paying down debt and he did an exemplary job of selling off non-core assets and streamlining SPB's business. Now, the new management has bet everything ($1.1 billion) on Certarus. Huge risk in my opinion, and the reason why Marquard & Bahls wants out. And, for those who think BAM is somehow going to buy SPB - why would they? They have a sweet 7.5% monthly dividend on their preferred shares so, they are already getting a significant cut of the profits. No, the purchase of Certarus has set SPB back about 15-20 years. If they can survive in the short term it will take them that long to become prosperous once again. That is, if hyrdrogen does, in fact, become a viable fuel source in Canada.
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