ENF.TO , what are your thoughts? - Page 2
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Thread: ENF.TO , what are your thoughts?

  1. #11
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    Quote Originally Posted by AltaRed View Post
    IMO, anything over 20 is nosebleed for a no (low) growth stock but I recognize that is a matter of perspective. Wasn't Bell Aliant high single digit before takeout? MBT is 14, albeit perhaps even lower growth than ENF.
    ENF.TO does have inorganic growth by acquiring mature assets from ENB also with the new proposal they have estimated a 10% dividend growth every year til and including 2019. compare to s&p it has a high p/e ( 17 vs 22.3) but compare to its peers it has the lowest p/e and price to book value ratio.

    but the price should drop ( technical and soon interest rate hike) . hopefuly


  2. #12
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    All that is 'stage managed' by ENB. ENB is only going to give ENF some rope IF it is in ENB's best interest, i.e. extracting capital for themselves out of ENF at less than the cost of direct equity by ENB itself. Who wouldn't leverage 90 cent dollars to reward 100 cent dollars? ENB will only make ENF attractive enough to investors in order to capture equity capital....to ENB's benefit.

    IOW, they will do just enough to allow ENF to increase dividends from time to time and to support share price. It's a win-win because ENF shareholders are getting a return on their investment. It just may not be more than marginally accretive.

  3. #13
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    http://www.enbridgeincomefund.com/Re...015&id=1992427

    diluting shares today at $1.80 then last closing price, but it looks like they increased the divi 10%. seems like they are shitting share holders by making the offering that low but maybe I'm missing something here?

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  5. #14
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    There is something about this round of capital raising that sort bothers me as a shareholder but I can't quite figure out exactly what.

    I think the first thing is that they had a trade halt yesterday afternoon before market close because they were close to announcing this.

    The second thing is that they are doing it at a price that is 5% lower than the market price yesterday. In all fairness though that is mostly because the last couple of weeks has been pretty good for oil and for pipeline companies. So if they were hammering out the price details in the last half of September then the $32.60 price doesn't look as bad as it does now.

    Finally, $700 million seems like a pretty high number. And based on Yahoo's market cap of $2.2 Billion it really is a high number. Looking at TDDI's market cap number they have $2.4B so this stock offering is between 1/3rd and 1/4th of the company... It can be argued that it isn't really a dilution though because it isn't like they just created the shares and didn't get cash for them (which they are using to actually fund a purchase of assets so the company is actually growing).

    So I still feel a little uneasy about this. I'm thinking I should pick up some more shares at this lower price but I'm not totally sure about that...

  6. #15
    Senior Member HaroldCrump's Avatar
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    Quote Originally Posted by 0xCC View Post
    I think the first thing is that they had a trade halt yesterday afternoon before market close because they were close to announcing this
    That is very common. Stock needs to be halted if important news is coming out mid-day, and this certainly qualifies.

    The second thing is that they are doing it at a price that is 5% lower than the market price yesterday
    That is very common as well.
    In fact, large secondary issues are sometimes priced a lot lower than 5%.

    Finally, $700 million seems like a pretty high number. And based on Yahoo's market cap of $2.2 Billion it really is a high number. Looking at TDDI's market cap number they have $2.4B so this stock offering is between 1/3rd and 1/4th of the company...
    That I can't comment on.
    I suggest you look into the financials of the company to make sure they are not routinely issuing equity to sustain the dividend payout.
    Also look at their ROE metrics.

  7. #16
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    Quote Originally Posted by HaroldCrump View Post
    That is very common. Stock needs to be halted if important news is coming out mid-day, and this certainly qualifies.
    My concern over the stock halt is that this sort of announcement isn't something that is a surprise to the company. In fact, you can look at milmilmillion and AltaRed's comments above from back in April that are basically discussing the reason behind the need for the capital they raised. The fact that they have probably been working on this for 6+ months and that on the last day they can't manage their press releases well enough to avoid a stock halt suggests a little bit of sloppiness from management/PR/Investor relations to me. If they had made exactly the same announcement 10 hours earlier they would not have had a stock halt. I would find it hard to believe that they didn't have exactly the same information they announced 10 hours before they announced it.

    Quote Originally Posted by HaroldCrump View Post
    That is very common as well.
    In fact, large secondary issues are sometimes priced a lot lower than 5%.
    I suspect that they did some sort of averaging of the market price over the last week or two of September. It wouldn't have been such a big gap if the first couple of weeks of October hadn't been quite so good for oil and for energy/pipeline stocks. It looks to me like just a little bit of bad luck, now that I have looked into it a bit I'm not too concerned about this.

    Quote Originally Posted by HaroldCrump View Post
    That I can't comment on.
    I suggest you look into the financials of the company to make sure they are not routinely issuing equity to sustain the dividend payout.
    Also look at their ROE metrics.
    I don't think they are routinely issuing equity, this round has been planned for awhile and again, as AltaRed comments on above it is to purchase assets from ENB. Since they are getting $700M worth of assets from ENB and those assets are going to help earnings enough to allow them to plan to keep giving 10%/year dividend increases for the next couple of years that seems reasonable to me.

    I personally think I need to do a little more homework on how these asset transfers from ENB are working and whether they are good for ENF shareholders long-term...

  8. #17
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    http://www.marketwired.com/press-rel...nf-2186620.htm

    Another 10% increase to ENF's dividend. Built my position in Mar and Apr 16 at $29-30. I still like it, certainly attractive when the yield is > 5% with 10%/yr growth.

  9. #18
    Bullish technical indication. On watch for clear above 35.52 with a short term target of 41.49.


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