E Split Corp T.ENS

How to calculate the premium or discount on ENS or any Split

[bbzzzz]

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

[Puma1back]

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

[Experienced]

Puma...good point That is why the calculation to determine whether there is a payout or not on the commons is based on the NAV- 10- any outstanding dividends payments.  For most splits, this number needs to exceed $5. The calculation of premium to NAV for the commons is calculated comparing the SP to the result of the above calculation.

[Puma1back]

The significant price decline below the nav issue price of the additional commons is consistent with some earlier placements but doesn't make sense to me unless the market thinks they  are going to pay too much for additional enb stock?

[Experienced]

Puma.... People who buy the commons of split shares are intoxicated with the current yield.  When the NAV for the commons approaches the $5 mark which for most splits is the point where the payout is in question, most people then dump their shares and the SP falls significantly. None of this has anything to do with previous placements.  Conversely, most managers of splits and in the

[Puma1back]

ok, so my mistake was in the reading of the placement release language. When they indicated that the class A was pegged non-dilutive at $12.55 i took that as the indicative NAV but looking at the June interim's, when ENB was a couple bucks above the current price,  NAV was below $12 and so will have taken the mark to market hit.  i can see your premium issue comments now

[Experienced]

Puma.. While I don't invest in splits to a large extent, when I do I feel more comfortable buying splits that are trading at a discount to NAV as opposed to a premium.  This provides a certain amount of downside protection compared to those trading at significant premiums. When I do buy (not invest...lol), I am nore focussed on a short term capital apprciation as opposed to buying for

[marcrobert]

i scooped up truckloads of bromptons in 2008/09 and 2020, 2-400% gains and 35% yields for years. nvidia and tesla can't beat that, esp. with blue chips underlying 

[Obscure1]

Congrats marcrobert on the life changing investment.   Many investors shy away from the Splits because the leverage can really work against you when things turn ugly.  However, buying Splits when things are ugly can set investors up for life. As marcrobert astutely pointed out, buying Splits that have blue chip underlying securities is the key to deciding 'which ones do