Altagas Ltd (ALA.TO)
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Thread: Altagas Ltd (ALA.TO)

  1. #1
    Senior Member 1sImage's Avatar
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    Altagas Ltd (ALA.TO)

    Altagas Ltd sold off 10.1 million shares to buy Blythe Energy.

    Stock down over $1.14 today, and sits at $34.90





    "CALGARY - AltaGas Ltd. (TSX:ALA) has agreed to pay US$515 million to buy Blythe Energy LLC, which owns a 507-megawatt power plant in Southern California.

    In addition to the natural gas-fired generator, the purchase from affiliates of LS Power Equity Advisory LLC includes major spare parts and a 108-kilometre transmission line in the state."


    http://www.edmontonjournal.com/busin...530/story.html

    The First Million is Easy!!!

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    It dropped to the issue price of the 10 million new shares, which was also $34.90. Equity issues are commonly priced 2-3% below close in order to give the purchasers a bit of a deal. You'll have to be a little patient with this as they are not predicting increased revenues/earnings per share from this purchase until 2014. It's a big purchase - that issue is almost 10% of their market cap.

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    Any thoughts on the future of Altagas? Seems a little on the expensive side (P/E) but the future growth looks promosing. I like the fact that it's not really tied to Nat Gas prices but if interest rates shoot up, it could hurt the stock price - similar to other utilities.

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    Down about 2.59% right now today ($1.37).....because they released a new issue @ $51.........boy, that's annoying.
    Exit, pursued by a bear. (The Winter's Tale, Act III, scene 3.)

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    I've got them on my watch list but I'm going to stay on the sidelines until I see how things play out with interest rates. I'm leaning towards TOU for my Nat gas exposure, but they're still a little expensive and the cool summer hasn't helped all that much for nat-gas pricing.

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    At an average cost of $18.49 I guess we're still doing OK.......irks me that they issue more units 'substantially' (relatively) below the previous close though.
    Exit, pursued by a bear. (The Winter's Tale, Act III, scene 3.)

  8. #7
    Senior Member HaroldCrump's Avatar
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    Quote Originally Posted by Nemo2 View Post
    irks me that they issue more units 'substantially' (relatively) below the previous close though.
    This is a bought deal, right?
    The secondary issue price would have been set a couple of weeks ago, and since then the price seems to have run up quite a bit (just looking at the price charts).
    Say, the deal with the investment banks was done in July - at that time stock price was in the $47 - $49 range.
    So, it is not too bad.

    Also, secondary IPOs are always priced slightly below recent closing prices.

    Overall, I don't think a 2.60% discount from recent closing price is bad at all.
    If anything, that is a good deal for the company and indicates a demand for its yield.

    However, what you should look at is the consistent and sustained issue of new debt and equity by the company.
    It seems just in the last couple of years, outstanding shares have grown from about 80M to 123M, and debt has grown from $900M to over $3B.

    I don't follow this company, so can't speak to the reasons, but something like this should be looked into.

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    ALA with P/E = 40 looking too expensive, also yield is low for utility.,,,, EMA or CPX looks better

  10. #9
    Senior Member daddybigbucks's Avatar
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    Quote Originally Posted by Nemo2 View Post
    Down about 2.59% right now today ($1.37).....because they released a new issue @ $51.........boy, that's annoying.
    ALA is up 10.5% in the last month.
    ALA is rising so fast that the new issue purchase price was probably set when the price was at $48.

    ALA is not running high on earnings, its running high on future expectations. They will be selling nat gas to the orient in the near future.
    My shares are on long term and these little blips mean nothing to me.

    relax and enjoy the ride.

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    Nice quarterly report and dividend increase today. Anyone own these guys?


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