Prefs are out of control Prefs closed at $11.05 for a 6.3% yield. That doesn't make any sense.
The NAV for ENS is $15.45 give or take $0.01. The share price is $13.53. That doesn't make sense
When things don't make sense, I start to wonder why.
I can't help but think that the share price of the Prefs are being pushed up by very small and artificial trades. The opposite seems true for ENS.
Why would that be?
If you look back in time, you will note that Middlefield does most if not all of its ENS Raises at the start of the month following ENB going ex-divi. The reason for that is that ENB typically gets smacked down ex-divi and the ENS shareholders are asleep at the wheel which means ENS remains at pretty flat when it should be going down. The end result is that the Premium to the NAV jumps up and BOOM, Middlefield does a RAISE.
What is different this time?
ENS is trading at a big discount to the NAV.
Meanwhile, ENS.PR.A is trading at almost a $1 Premium to its NAV ($11.05 vs $10.08).
If the ENB share price slips a couple of dollars ex-divi, which it could easily do following a nice run up, and ENS doesn't follow it down as many ENS shareholders are divi whores, it is not beyond the realm of possibility that we see a Raise at the end of the month. If that happens, it will come on the backs of the Prefs this time while the ENS shares would probably not nearly get the haircut that it normally receives on a Raise.
Keep in mind that Middlefield can do a Raise if the costs of the issue (paid by ENS shareholders btw) don't push the issue price below the UNIT NAV. I believe the last Raise included the Prefs being issued at $9.70.
Maybe I'm being paranoid, but I have a healthy respect for Middlefield and other fund managers being ruthless. They don't break the rules, but they certainly play fast and fancy free with them. By that I mean that they can get a third party to move share prices on small volume to accomodate a Raise. Nobody pays attention and it is never blatant so it just gets done. If I'm not mistaken, Middlefiled through its advisory subsidiary picks up several hundred thousand dollars on each Raise. In addition, Middlefield can act as a broker itself and also pick up the investment dealer fees which are substantial. Don't think for one second that Middlefield's interests are aligned with our interests.
I'm not saying Middlefield is doing or will do the above. It is just that my mind starts to wander when things don't make sense. We typically see some wonky trading just before a Raise so I will be keeping a close eye on the trading at the end of the month as it feels like something is up.