All posts by peter

Northland Power – Buying opportunity

New secondary offering has taken the share price down by 10%

Current market price of $23.16 is below issue price of $23.35

Secondary issue has no effect on treasury stock – no dilution

Chairman is selling a large chunk of his stock for estate planning purposes

Company has strong projected growth in cash flow and earnings over next two years – better than average of its peers

Stock is attractively priced at current levels relative to peers at 14.25 PE on this year’s eps

Current dividend yield of 4.66% with reasonable payout

 

Parex Resources – Positive Fundamentals

Parex’s share price has been one of the best Canadian energy stocks both year to date and in 2018.

Year to date its total return is up almost 26% vs 7.6% for the iShares XEG ETF.

Even in a bad year last year for energy stocks, Parex only fell 10% vs a 27% decline for the XEG sector benchmark

The company receives the higher Brent crude prices

Parex has a strong balance sheet with no  debt and working capital at the end of last year of $215 million US

Proven and probable reserves rose 27% last year

The company has strong self funded organic production growth

The company is expected to report its quarterly earnings this week.

While the shares are not cheap relative to its peers, the company continues to deliver strong results

 

 

Chartwell Retirement REIT – Headwinds

The long term demographic trend of an aging population remains positive for Chartwell

However the immediate supply / demand outlook is only in balance with no supply shortages anticipated

For Chartwell’s top markets – Ottawa, Durham region of GTA and Calgary, the company is actually experiencing an oversupply of product

As a result of these current headwinds, Chartwell will only be able to increase their dividend distribution modestly

Conclusion: Favour both apartment and industrial / logistic REITS more than retirement homes as they have better industry fundamentals.