# Just Energy JE.TO



## liquidfinance (Jan 28, 2011)

What are the thoughts on this set of results?

Opinions appreciated. 

Thanks

http://www.marketwatch.com/story/just-energy-reports-first-quarter-results-2012-08-09-917327


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## doctrine (Sep 30, 2011)

Couple warning signs here. One is, they do not report net earnings in their press release. That's because it wouldn't look good, I'm certain. Their payout ratio is too high. $42M EBITDA, but $29M after taxes, yet still $44M in distributions. I don't have an issue with 100% payouts if they are from net earnings, but they're barely making 100% EBITDA, which means they're funding the distributions from debt and hoping they make it up on growth. They can probably sustain it for a while, but I wouldn't be interested based on the latest quarter.


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## jamesbe (May 8, 2010)

I'm going to cut my losses on this one soon, it is up a little today. The dividends are okay and I'm almost at a point of breaking even with dividends and loss accounted for. When everything else I am buying is up 10-15% this is down 20% meh.


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## liquidfinance (Jan 28, 2011)

jamesbe said:


> I'm going to cut my losses on this one soon, it is up a little today. The dividends are okay and I'm almost at a point of breaking even with dividends and loss accounted for. When everything else I am buying is up 10-15% this is down 20% meh.


My sentiment exactly.


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## lakota (Apr 3, 2009)

up 6% today.

p.s tomorrow is the ex-div day.

JUST ENERGY GROUP INC. ANNOUNCES $105 MILLION INVESTMENT BY CPPIB CREDIT INVESTMENTS INC.

Just Energy Group Inc. has closed an investment with CPPIB Credit Investments Inc., a wholly owned subsidiary of Canada Pension Plan Investment Board (CPPIB). The investment is in the form of C$105 million of unsecured, five and a half year term notes with a 9.75% coupon (the "Notes"), issued pursuant to a trust indenture with Computershare Trust Company of Canada (the "Indenture"). 

Just Energy intends to use the net proceeds from the financing to reduce its drawings on its working capital line, fund future growth and for general corporate purposes. CIBC World Markets Inc. and National Bank Financial Inc. acted as agents on the transaction. 

The key terms of the Notes are as follows: 

Principal: C$105 million investment Coupon: 9.75% Pricing: Issued at par Ranking: Senior unsecured indebtedness Term: Five and a half years Prepayment: Make whole and change of control provisions as described in the Indenture Covenants: Certain customary covenants with respect to additional debt incurrence, dividends, asset sales and other usual covenants to be set forth in the Indenture 

Rebecca MacDonald, Executive Chair of Just Energy, said: "We are pleased to have completed this financing with CPPIB, a leading global institutional investor. Their thorough professionalism made this a straightforward transaction during a time of volatile markets."


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## bettyboop (Dec 13, 2011)

I sold my holding this morning, I've had enough of watching my $$ go down the drain. I should have never bought it in the first place.


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## james4beach (Nov 15, 2012)

This had a 10% dividend yield until recently.

JE has just eliminated its dividend: "Common Share Dividend Suspended as part of Strategic Review" https://investors.justenergy.com/node/10646/pdf

The stock rapidly fell 63% since the release, demonstrating (once again) that one can't ignore share price and can't escape the reality of total returns.

The financial statements as of March 31, 2019 show liabilities that exceed assets. It got much worse as of June 30, 2019 financial statements:

Assets: $1,537 million
Liabilities: $1,918 million
Shareholder's Equity: -$381 million, negative

Interestingly, the shares still trade at $1.57 which values the equity at _positive_ $237 million.


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## doctrine (Sep 30, 2011)

There is some underlying value to the business, they may be able to squeeze out something for their US operations based on recent acquisitions for similar businesses that are consolidating down there. But most of the rest is garbage. There is very likely negative equity. This stock rarely if ever made enough earnings to cover the distribution, but shows you how long the show can go on.

All you had to do was value this company on either tangible equity or net earnings and you never would have bought.

Or just realize they are in a greasy business that relies on extracting money via massive door to door sales teams that results in huge turnover.


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## james4beach (Nov 15, 2012)

Definitely was a shady operation from day one. Always paying out more dividends than was sustainable. The pure mismanagement of accumulating a deficit, which was inevitably going to cause this blowup in equity.

But it really is interesting how long JE persisted before the blowup.
http://schrts.co/ZbhMvBiM

Since the stock entered visibility around 2004, the chart shows that for *15 years*, the stock price (as total return) was stable. Went sideways, and didn't perform well, but combined share price + dividends was actually pretty stable. That might have convinced many investors that this investment was "OK" as a cashflow generator.


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## Topo (Aug 31, 2019)

lakota said:


> up 6% today.
> 
> p.s tomorrow is the ex-div day.
> 
> ...


I wonder if this bodes well for their convertible bonds. JE.DB.D yields around 10%.


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## MrMatt (Dec 21, 2011)

I was looking into this years ago.

They have a history of deceptive practices and are facing several lawsuits for the sales practices.
Companies that lie and scam their customers and staff/contractors, are likely trying to screw the investors too.


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## Topo (Aug 31, 2019)

MrMatt said:


> They have a history of deceptive practices and are facing several lawsuits for the sales practices.
> Companies that lie and scam their customers and staff/contractors, are likely trying to screw the investors too.


True. Those are all red flags. It is legally a bit more difficult to screw the bond holders, but who knows.

They seem to have had positive earnings in 2018 and before. Cash flow was positive in 2016. Liabilities exceed assets.

The debentures are definitely junk. What was the CPPIB thinking? They probably have good visibility into the company. They seem to have better protection, since their notes are senior, but still unsecured. Could one ride on their coattails, hoping that a default is not imminent? There is a 57% return potential by December 2021, if they do not default.


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## MrMatt (Dec 21, 2011)

Topo said:


> True. Those are all red flags. It is legally a bit more difficult to screw the bond holders, but who knows.
> 
> They seem to have had positive earnings in 2018 and before. Cash flow was positive in 2016. Liabilities exceed assets.
> 
> The debentures are definitely junk. What was the CPPIB thinking? They probably have good visibility into the company. They seem to have better protection, since their notes are senior, but still unsecured. Could one ride on their coattails, hoping that a default is not imminent? There is a 57% return potential by December 2021, if they do not default.


Do you really think that their lawyers will be working hard for the next 2 years?
I think they're still being pursued for trade practices, and that doesn't include anyone that hops on before they go under.


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## OnlyMyOpinion (Sep 1, 2013)

I was surprised CPP would bail out a company with such controversial historical sales practices.


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