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ENF.TO , what are your thoughts?

11K views 17 replies 9 participants last post by  hollyhunter 
#1 ·
hi,

just joined this forum. What are your thoughts on ENF for long term hold ? (10 to 15 years) ? I like the financial but Im pretty new so I cant tell if its over value or value? also is there any reason other than technical for yesterday's 3.5% drop on a high volume?

What do you value the company at?

do you consider enf a low risk or a med risk company ?

thanks
 
#2 ·
this is enbridge's income fund

unless you are buying specifically for their high yield you would be much better off buying enbridge's stock ENB then you get a divvy and growth

it has a beta of .51 which makes it a fairly low risk / low volatility asset

this if for income not growth
 
#4 ·
Not that many stocks pay monthly dividends. Most pay quarterly. Income funds, REITs and the like are the ones that most commonly pay on a monthly basis.

FWIW, it is much easier to keep track of dividends and distributions if receiving them quarterly. For those relying on that kind of income stream, it is just a matter of managing a quarterly, rather than monthly, budget.
 
#7 ·
ENF is intended to hold ENB's mature assets. ENF is really an income stock aka he old Bell Aliant, MTS, etc. Technically there is little to no asset growth - there might be market price growth because investors have bid up the price. That in itself is a red flag. Both ENB and ENF are overpriced (P/E ratios are nosebleed) and stock prices could fall as early as Fall 2015 unless ENB can get itself into some other businesses (which is its intent).
 
#12 ·
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.
 
#14 ·
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...
 
#15 ·
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.
 
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