# Inter Pipeline Fund (IPL.UN)



## davext

Hi, Does anyone know what happened to Inter Pipeline today? It bumped up 5% today but I didn't see any news.

My TFSA is happy though


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## Ethan

davext said:


> Hi, Does anyone know what happened to Inter Pipeline today? It bumped up 5% today but I didn't see any news.
> 
> My TFSA is happy though


It's down 5% today. It makes me wonder when stocks have these wild gyrations over a short period if someone is tampering with the stock Bud Fox/Lawrence Wildman style. Maybe I've watched too many movies.


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## davext

Maybe it was just a momentary blip, or the last trade of the day or something


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## Ethan

davext said:


> Maybe it was just a momentary blip, or the last trade of the day or something


It's also possible that a large institutional buyer paid a premium to buy that many shares. On google finance I can see buys of:

42,600 shares at 16.99
44,800 shares at 17.00
76,100 shares at 17.03
253,800 shares at 17.08

That's 417,300 shares bought in the last 6 minutes of the trading day. IPL averages 458,993 shares traded per day. Probably was just an institutional buyers looking to buy ~400,000 shares and paid a premium to do so.


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## webber22

There was a new COO announced yesterday, not sure if that's related.


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## warp

There indeed was a big institutional buyer at the end of the day yesterday.

Id like to know who it was.....in any case they obviously like IPL and wanted to buy/own it.

So if you own IPL be happy, even though the price did drop back this morning.

If you don't own IPL...might be a good time to buy along with this big buyer....and you will get it at a lower price than they did!

good luck.


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## webber22

Where in google finance are the trades shown?


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## Argonaut

I was also curious to see how I made hundreds of dollars in a few minutes. The only thing I could find yesterday was a new COO was announced. The same thing happened with Westshore Terminals so I was super excited yesterday, but they're both down today. Probably a similar institutional buyer with the latter as well. I probably should have pie in the sky limit sell orders on my stocks to take advantage of stuff like this.


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## warp

IPL is something you prob wanted to hold for long term...with the nice yield.

Dont let the market noise make you crazy.

If you are going to own stocks, you MUST be able to stomach the volatility.

Making ( or losing ), a few hundred dollars ( or much more) , in a few minutes is something that happens to everybody, especially as your portfolio grows.

IPL is a solid stock to own.....dont sweat it.

good luck


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## I'm Howard

Down today.


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## Causalien

What this buy tells me.

That the sentiment for IPL is bullish. The institution basically did the buy test for me. It told me how liquid this stock is and at which premium would I find enough seller to sell. It also told me that there isn't a hidden large player selling at any opportunity... There is, however, somebody at $17 ready to sell. 

The retail investors though wouldn't want to buy at more than $16 so it will have to be slowly ground up to $17.

The large institution buy did not break that particular sell order. Tomorrow, I'll scrounge together some cash and buy more IPL.


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## Argonaut

Yeah, I think it's good news all around, I've been on board and excited since they announced a dividend increase three days after I bought it back in October. The price coming down from that lifetime high yesterday doesn't bother me because I can get more from the DRIP.


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## celishave

I own some of this outside my rrsp/tfsa unfortunately so of course most of the distributions are considered income at the highest rates. My question is what happens if I decide to DRIP this? Do the distributions then become non taxable and taxed at a later date (via owning more shares down the road)? Or would they show up on a T5013 same as they do now?


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## FrugalTrader

If it's held in a non-reg account, and the distributions are not return of capital, then they are taxable for that tax year regardless of if the distribution is reinvested.


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## I'm Howard

BTE and IPL wre bought for their yields, but their performance is getting a little scary.

BTE was a 7% Convertible, bought at $100, went to $355, converted to units, still think it will be a takeover.


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## warp

celishave said:


> I own some of this outside my rrsp/tfsa unfortunately so of course most of the distributions are considered income at the highest rates. My question is what happens if I decide to DRIP this? Do the distributions then become non taxable and taxed at a later date (via owning more shares down the road)? Or would they show up on a T5013 same as they do now?


Unless Im wrong, distributions in 2011 and thereafter will be mostly dividends.

IPL decided not to convert to a corporation, and stay as a "trust"

I believe they did this because they could not justify the cost that would be incurred to convert to a corp, and saw no reason to do it.

However, like I said, their distributions will now be mostly dividends...( not regular high tax income).

If anyone knows anything wrong about this info , please post


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## webber22

It says "a portion of distributions is expected to be treated as a return of capital" . This is one reason I don't buy the stock outside a registered account - don't like to track the ROC

http://www.thepressreleasewire.com/....jsp?actionFor=1407931&releaseSeq=0&year=2011


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## 14dmoney

Ethan posted on another thread that he was concerned about the dividend payout ratio being too high... does anyone know what it is? Does anyone else have a concern with their balance sheet?


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## Ethan

14dmoney said:


> Ethan posted on another thread that he was concerned about the dividend payout ratio being too high... does anyone know what it is? Does anyone else have a concern with their balance sheet?


On google finance IPL's earnings are $0.91. Their monthly dividend payment of $0.08/share equals $0.96/year. Quick math would indicate IPL is paying $0.05/share more in dividends than they earn annually.

You can find IPL's public documents here:

http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00009217

Their year ended 12/31/2010 statements show net income of $234,769k and dividends declared of $232,600k. They're basically paying all earnings as dividends. This is concerning to me given IPL pays a floating rate of interest on a large portion of their debt (BA + ~50 basis points) per note 9 of the FS. If interest rates rise (as I think they will later this year), that could reduce IPL's income and cashflows. I also question how a company will finance future growth when all earnings are paid out.

I question IPL's amortization expense. PPE increased from $3.765 million to $4.002 million, however amortization decreased from 102,229k to 87,535k. If you used the same amortization % (based on BV) as the prior year the EPS drops significantly.

I know many posters on here like IPL for their cashflow. If you look at the financing section of their cashflow, cash distributions of (194,487) are offset by long term debt acquired of 180,689. I don't like dividends to be financed by debt. How will that debt be paid down?

IPL has a defined benefit pension plan that required a $4 million cash injection last year, DB pension plans are not something I like my companies to own.

IPL also purchased 43% less PPE than last year.

To summarize, IPL is acquiring debt, purchasing less PPE and are vulnerable to fluctuations in interest rates. I'm not sure how they can grow based on those points. I do like IPL and the industry in general. I am not sure if the dividend is sustainable, if the dividend were to drop I think the share price would drop as well. For that reason, I'm staying away.


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## 14dmoney

Hi Ethan,

Thanks for your detailed analysis of the financial statement. 

I had crossed IPL off my list for the same reasons you listed but I am fairly new to this and am just trying my best to learn as I go. Getting confirmation definitely helps me feel more confident that I am on the right track.

Just curious... did you end up "rebalancing" your portfolio after all?


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## Ethan

14dmoney said:


> Hi Ethan,
> 
> Thanks for your detailed analysis of the financial statement.
> 
> I had crossed IPL off my list for the same reasons you listed but I am fairly new to this and am just trying my best to learn as I go. Getting confirmation definitely helps me feel more confident that I am on the right track.
> 
> Just curious... did you end up "rebalancing" your portfolio after all?


Thanks. I could easily be wrong on IPL, wouldn't be the first time, but I think the cons outweigh the pros on that stock.

I haven't changed anything in my TFSA yet. I'm leaning towards selling ALA, and using the proceeds plus my current cash balance to buy ~40 shares of CNR. ALA and IPL are almost identical, so I don't like ALA for the same reasons I don't like IPL. I'd hang onto TD and ENB in this scenario.


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## 14dmoney

Ethan said:


> Thanks. I could easily be wrong on IPL, wouldn't be the first time, but I think the cons outweigh the pros on that stock.
> 
> I haven't changed anything in my TFSA yet. I'm leaning towards selling ALA, and using the proceeds plus my current cash balance to buy ~40 shares of CNR. ALA and IPL are almost identical, so I don't like ALA for the same reasons I don't like IPL. I'd hang onto TD and ENB in this scenario.


I hear you... I know that my learning curve has been pretty bumpy so far. I had CNR on my watchlist in Nov but never pulled the trigger because my funds were in limbo during a very lengthy transfer between financial institiutions. 

On the plus side, I did manage to buy BCE and RY a couple of weeks ago, and I am happy I did!

Best of luck to you with your investing!


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## Argonaut

I do not believe the dividend is in jeopardy at all. If so, why would they have raised it in November/December of last year? There is a snippet on the website that addresses Ethan's concerns:



> _14. Will Inter Pipeline maintain its monthly cash distribution level through 2011?_
> 
> Yes, Inter Pipeline intends to maintain its current level of monthly cash distributions through 2011 and beyond.
> 
> Since the Tax Fairness Plan was enacted, Inter Pipeline has stated that it is well positioned to maintain its current level of cash distributions to unitholders through 2011 and beyond, despite becoming a taxable entity. This outlook remains unchanged. It is supported by continuing strong financial performance and attractive fundamentals in each of its business segments, and expected increases in cash flow following completion of organic growth projects currently under development.


I find no reason not to believe them, as management has provided very good shareholder value, especially since the financial crisis. There is so much room for expansion in the oil sands, which they are continually doing. I will have a look at their numbers again in their quarterly report next month.


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## Causalien

Ethan posted legitimate concerns. I will have to review their financial statements. 

In the past when I was analyzing which trust funds to buy, IPL is the lesser of several evils and got into my portfolio as an indirect play to US's dependance on oil sands. Yes, if the trend continues, it will be worrying, but it's nowhere near the level where it should collapse yet.


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## peterboro31

IPL is not a growth company; same as many former trusts; they became income trusts in the sunset stage of their business lives.


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## peterboro31

We include IPL in our portfolio for the constant and excellent distribution yield; as of today at 6.2%. In early 2011, we increased our holdings by 200%.

In regard to a worry re distribution compared to profit in 2010; LOOK FURTHER:

2010: Profit 234.8 Distribution 232.6
2009: Profit 157.7 Distribution 202.4
2008: Profit 249.7 Distribution 186.6
2007: Loss -80.0 Distribution 171.7
2006: Profit 130.6 Distribution 160.8

In regard to recent volitility; it seems like some trader is playing the short game, as they were for a while on TD.


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## gibor365

14dmoney said:


> On the plus side, I did manage to buy BCE and RY a couple of weeks ago, and I am happy I did!
> 
> Best of luck to you with your investing!


Same here  exactly couple weeks ago I bought RY and BCE


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## Sherlock

Bought 200 shares at 17.40 for my TFSA, for a long term hold.


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## Argonaut

I've got 250 shares in my TFSA. Average cost 14.23. I'm the resident IPL.UN pumper; looks like Ethan's analysis was offbase as the dividend was raised again.


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## Sherlock

Mods, I think this topic should be moved to the individual stocks section. Then, you may delete this post.


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## jamesbe

Stellar year:
http://www.sys-con.com/node/2170296

Chaching again!


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## Causalien

I am face palming so hard for not buying more and instead decided to spread out the risk by buying COS.


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## Argonaut

When someone asks what kind of stock I like, I usually use Telus as an example. But Inter Pipeline is my favourite equity on the TSX, probably the best stock in Canada.


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## Pickering

*IPL.UN - Missing Something*

I have a whack of this - average cost less than $10 and love the dividend. Have lots of room to wait this out but has something fundamentally changed. My DD seems to indicate it is business as usual - RSI is way oversold - can not see $400 million in fiancing would cause this drastic correction.
Am I missing something
Thanx !!


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## webber22

In a market sell-off fundamentals are lost in the shuffle. I added to current holdings of IPL.UN and PPL, yields close to 6%


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## Abha

Volume pattern (Speaking from a technical perspective) is indicative of distribution. There is a fund or a big % owner selling the name. Not sure if its due to raising cash for the portfolio or if bad news is being absorbed ahead of the overall market. Decent name to buy but I'd wait to see if stabilize or for the sell volume to exhaust itself through an abnormal candle. 

Best of luck to you and your cost basis shouldn't leave you worried as you've got more than enough buffer.


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## londoncalling

I was not fond of the 5.57% drop it took today. but both the above responses are accurate. I would check to see if if the sell off can be substantiated as well before adding. If you hold the position for income and dividend growth I wouldn't panic. I also watch insider selling to help determine if there may be some bad news on the horizon. Insider buying is a much better indicator of potential stock movement but all these factor into the big picture.


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## Financial Cents

Loved the almost 6% drop today. Hopefully it drops more, so I can buy more. Would like to own a few hundred shares eventually and let it DRIP in brokerage.


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## Pickering

Virtually no insider trading in 2012. VP legal sold 10,000 shares on May 31st - that appears to be it for this year. My level 2 just shows bid and ask - can anybody determine whether it is the same brokerage doing the selling.


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## webber22

Most free websites have 'the last 30 trades' for the tsx that can be checked during the day if you want to see who's trading. There was no pattern in the selling that I could see last week for IPL.
In fact most pipelines were sold off and those that have smaller volumes took a bigger hit.


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## blin10

markets sink everything sinks... i want to pick up more as well, but ill wait


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## londoncalling

I think people are just locking in some profits in a time of market uncertainty


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## Pickering

It seems that for the past month or so, every second guest on BNN has used cash as one of their top picks - did I listen - nope !!! 
I am retired and stayed fully invested in order to maximize my dividend cashflow. Once this correction is over, will learn my lesson always carry a cash position to be able to take advantage of situations like this.
Not sure, but would strongly suspect that as an added benefit, cash is just a tad bit more stable ?!?!


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## webber22

Nice recovery for IPL and PPL


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## rassmy

Yes I get it on sale 17.55.


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## Gumball

I was hoping both IPL and PPL would have dipped a bit more so I could buy some more shares, they have now rebounded nicely


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## LOST

Sold some shares at 20.02 for a 20% profit. Funny thing is that the stock spiked up to take out limit order and then went back down and settled down for the day. Hope to pick some up cheaper. Bought a block $19.83 and made a quick $120 for the day. This stock has treated me well. I think of it as the next Enbridge.


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## londoncalling

Nice play and fortunate timing. I think this is a great company. It also announced some development expansion in the oil sands with Conoco and Cenovus. I think this will be good long term. IMO the more pipelines the better for both energy and pipeline companies. It will narrow the gap between oil prices here in Canada and the gulf 

http://tmx.quotemedia.com/article.php?newsid=53162694&qm_symbol=IPL.UN


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## londoncalling

londoncalling said:


> Nice play and fortunate timing.


each: Or perhaps a day too early. Up another 4% currently. Still... 20% in a day is nothing to sneeze at... Do you hold it long term as well as trade it?


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## blin10

this is one of those that you shouldn't sell... this thing might split one day


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## londoncalling

When I first started DIY I trimmed this position after a nice run up as part of rebalancing... Never again... Thanks to kind folks like argo blin and causalien I have learned that this is one horse in the stable that you just keep feeding. Still has a lower PE and book price than PPL which was highly endorsed by caller Cole Stevens of vector vest fame yesterday on marketcall....:tongue-new:


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## Gumball

totally agree with this statement, im looking for a dip so i can buy more. gonna keep DRIPPPPING this one


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## zylon

*(ipl.un)*

congratulations to anyone who bought at $17 in January or below $18 in June.
I let those 2 opportunities slip by.
But I shouldn't complain; my average price is $14.10

http://stockcharts.com/h-sc/ui?s=IPL/UN.TO&p=D&yr=0&mn=8&dy=0&id=p32890600812


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## LOST

I have long term position as well as dripping. They give you a discount (?%) as well when dripping. This must be to take care of price hit you will take when cashing out because of lack of liquidity. PPL has been disappointing, ENB not bad.
I don't believe you should lighten up to 5% of portfoliio for winners and bump up laggards as pundits will state. Ride your winners hard as there are so few of them around. I have some around that I paid $10 for. If I would have believed the FA at RBC and bought their M/F and not stuck to my knitting, I would be down 20% on portfolio.


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## Gumball

LOST said:


> I have long term position as well as dripping. They give you a discount (?%) as well when dripping. This must be to take care of price hit you will take when cashing out because of lack of liquidity. PPL has been disappointing, ENB not bad.
> I don't believe you should lighten up to 5% of portfoliio for winners and bump up laggards as pundits will state. Ride your winners hard as there are so few of them around. I have some around that I paid $10 for. If I would have believed the FA at RBC and bought their M/F and not stuck to my knitting, I would be down 20% on portfolio.



Can you elaborate why you find PPL to be disappointing? Im wondering is it due to time frame from when you purchased the stock(stock performance compared to IPL), or in their quarterly results, etc, etc. thanks


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## webber22

With IPL earnings coming out at day end, the time to sell might be now for swing traders.


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## jamesbe

This stock is a yo yo though. I bought in Jan at $18 and it was pretty stagnant in June as mentioned. So it's up now, probably be down again in a few months. I'm just holding.


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## blin10

compare it to tsx on one year time frame... this stock is a champ, don't matter it it'll go back to 17 or 15


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## LOST

I was just referring that ppl was backing off the all time high it had reached earlier on in the year and was backing off near term ( due to fracking component inherent in stock whereas IPL.UN is more oily quoted by BNN Analyst) and IPL.UN was going up in price.
Don't get me wrong. PPL is a long term hold and has done me well as initial purchase was 10 also


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## Sherlock

Holy moly, look how high it is. I wonder if I should sell now at $21+ and buy again on a dip?


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## zylon

*(ipl.un)*

It could pull back to support at $19.75 (6% below today's close)
but I wouldn't count on it going lower than that without bad news
or market crash.

weekly chart


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## webber22

Earnings came in strong. Could be a blow off top tomorrow

http://www.thepressreleasewire.com/....jsp?actionFor=1648441&releaseSeq=1&year=2012


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## londoncalling

Beautiful!!!! :encouragement::chuncky:


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## Kaitlyn

webber22 said:


> Earnings came in strong. Could be a blow off top tomorrow
> 
> http://www.thepressreleasewire.com/....jsp?actionFor=1648441&releaseSeq=1&year=2012


But I didn't get in yet!


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## Argonaut

Always good news with this company. Forget trying to time a sell and re-buy, no reason to ever sell a share. It's been my largest position for most of the last two years.


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## Gumball

Argonaut said:


> Always good news with this company. Forget trying to time a sell and re-buy, no reason to ever sell a share. It's been my largest position for most of the last two years.


I totally agree, always looking to add to my position in IPL if I see a dip (same thing with PPL)

LOST - I agree with you on your view of PPL


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## Financial Cents

In some ways, glad to see IPL.UN over $21. What sucks is, I wanted to buy more. I wish I could still buy it for $15 like I did before. Dang.


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## blin10

at current levels they might raise dividend as well


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## Calgary_Girl

Yup, no reason to sell this one. We bought the bulk of IPL in 2008 @ $8.05 and have been dripping ever since :biggrin:


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## Islenska

remember though, no such thing as a perfect stock, IPL can hiccup like anything else.


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## Gumball

Islenska said:


> remember though, no such thing as a perfect stock, IPL can hiccup like anything else.


and when it does "hiccup", thats when I will increase my position


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## blin10

just curious , since it's a fund can it do a split?


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## Nemo2

blin10 said:


> just curious , since it's a fund can it do a split?


Didn't COS.UN do its split ( 5 for 1 IIRC), before it became COS, i.e. while it was still a trust?


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## blin10

good point..


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## Sherlock

This has been one of my best performers but I sold it today. It's at an all time high and I'm not confident it's gonna go much higher soon. Need something else to replace its spot in my portfolio. I've been eyeing CPX.


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## blin10

it is pretty high up, but it's holding up amazing with the market in the toilet... who knows


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## Argonaut

Sherlock said:


> This has been one of my best performers but I sold it today. It's at an all time high and I'm not confident it's gonna go much higher soon. Need something else to replace its spot in my portfolio. I've been eyeing CPX.


Going from high quality to low quality; don't understand this move.


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## Sherlock

What makes CPX low quality? Its price target according to many analysts is much higher than what it costs now, whereas IPL is already trading around its price target. TD has a price target of $23 for IPL and I sold for 22.50.


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## Argonaut

Analyst price targets are not a barometer for quality. CPX: they dilute their shares, they don't grow their dividend, and the chart looks bad. Everything is the opposite with Inter Pipeline.


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## GoldStone

Re dilution:

IPL.UN common shares outstanding:

2012-09-30: 272,665,769
2012-06-30: 269,969,987
2012-03-31: 267,181,826
2011-12-31: 263,892,445
2011-09-30: 261,213,813

I'm too lazy to check why their share count is creeping up. Is it just DRIP?

OTOH, book value per share keeps increasing too.


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## Argonaut

Boy is that ever a nitpick. In the same time CPX's share count has increased 44%.


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## doctrine

^^


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## Sherlock

Well I haven't bought CPX yet, it's just one of several replacements for IPL I've been eyeing. What else would you suggest? Pembina or Veresen?


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## GoldStone

To be clear, my post about IPL share count wasn't meant to be a knock against IPL (or an argument in favour of CPX).


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## Canuck

I sold half my position on Friday as well, should have waited a day it was just too big a percentage of my portfolio


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## blin10

they need to do a split, wouldn't that be a nice new years present :>


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## protomok

I hate buying stocks at 52-week highs but I'm finding it hard to resist with IPL!


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## Gumball

with the recent increase in dividend by over 5% i dont see IPL retreating anytime soon... still love IPL and PPL, wont me selling my winners thats for sure. 
I find PBN an interesting play but I am struggling to determine if the higher yield is worth the added risk vs just adding to my position in PPL or IPL


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## Canuck

I took on some risk and added a bit of PGF, PBN, and BNP with my IPL profits.

fingers crossed....I'm thinking this might pan out well in a few years


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## AltaRed

Canuck said:


> I took on some risk and added a bit of PGF, PBN, and BNP with my IPL profits.
> 
> fingers crossed....I'm thinking this might pan out well in a few years


Operative words here are "....in a few years". Until new pipeline space is available to move oil and reduce the discount, these are likely going nowhere.


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## Greyhound86

AltaRed said:


> Operative words here are "....in a few years". Until new pipeline space is available to move oil and reduce the discount, these are likely going nowhere.


That is my worry as well. How long will it take to get enough oil moving out of Western Canada to markets so that the discount being received by Canadian producers goes away? It seems to take a long time to get pipelines approved and built.


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## Argonaut

More all time highs today. What about the replacement stocks that were mentioned as being bought? In that timeframe..

IPL.UN: +5%
BNP: -8%
PGF: -5%
PBN: -10%

You just can't sell this stock, you have to keep feeding it like the trophy horse that it is.

Signed,
Broken Record that is not being heard


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## Kaitlyn

Yea my BNP.. I was up so much, now I'm in the red


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## Sherlock

Argonaut said:


> More all time highs today. What about the replacement stocks that were mentioned as being bought? In that timeframe..
> 
> IPL.UN: +5%
> BNP: -8%
> PGF: -5%
> PBN: -10%
> 
> You just can't sell this stock, you have to keep feeding it like the trophy horse that it is.
> 
> Signed,
> Broken Record that is not being heard


Such a short timeframe is irrelevant, at least to those of us who invest for the long term. That's like comparing RIM and AAPL from september to now and claiming that RIM is the better stock because it went way up in that time frame while apple went down.


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## jamesbe

Shooting the lights today, this and d.un and i made a killing.


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## Sherlock

Kaitlyn said:


> Yea my BNP.. I was up so much, now I'm in the red


Tell me about it, I bought BNP way back when it was $22.

Averaged down at $15 so my ACB isn't so bad but still sad. 

But I don't need the money now so I can wait it out and meanwhile I'll collect those dividends.


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## Argonaut

Sherlock said:


> Such a short timeframe is irrelevant, at least to those of us who invest for the long term. That's like comparing RIM and AAPL from september to now and claiming that RIM is the better stock because it went way up in that time frame while apple went down.


It's not irrelevant at all. One should be set up to make money in their positions every week, every month, every year. I don't even need to check the long term chart comparisons of these stocks to know that it's alpine ski slopes versus a chairlift to heaven.

One who is riding a poor stock down and calling themselves a long term investor is making excuses for the money-losing decision.


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## thenegotiator

Sherlock said:


> Such a short timeframe is irrelevant, at least to those of us who invest for the long term. That's like comparing RIM and AAPL from september to now and claiming that RIM is the better stock because it went way up in that time frame while apple went down.


Rim from the lows had more than 100% profit as of today.
would i buy it now ? no.
did i think of buying it ?
yes.
to me it looks better than AAPL.
problem is that u had to have the Cojones to buy.
shoulda could woulda means nothing.
i know what u might telll me .
the stock was once upon a time a Star.....
AAPL is today's star is it not?


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## Sherlock

Argonaut said:


> It's not irrelevant at all. One should be set up to make money in their positions every week, every month, every year. I don't even need to check the long term chart comparisons of these stocks to know that it's alpine ski slopes versus a chairlift to heaven.
> 
> One who is riding a poor stock down and calling themselves a long term investor is making excuses for the money-losing decision.


I disagree! There will be some weeks, months, even years when you will lose money. And that's a-ok.


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## Sherlock

thenegotiator said:


> Rim from the lows had more than 100% profit as of today.
> would i buy it now ? no.
> did i think of buying it ?
> yes.
> to me it looks better than AAPL.
> problem is that u had to have the Cojones to buy.
> shoulda could woulda means nothing.
> i know what u might telll me .
> the stock was once upon a time a Star.....
> AAPL is today's star is it not?


argh... I bought RIM at 7.25 and sold for 8.80 or something... am I regretful? Yes. Does it keep me awake at night? No, you can't win em all.


----------



## webber22

Over $24 now, other than the new contract with Suncor, there's other talk of possible pipeline takeovers of IPL and others like PPL, pushing up the stock prices


----------



## LOST

webber22 said:


> Over $24 now, other than the new contract with Suncor, there's other talk of possible pipeline takeovers of IPL and others like PPL, pushing up the stock prices


I was watching stock today and noticed it went up to .60 first thing in the morning with no news that I could find. I sold some other shares of other stocks and to my delight, IPL.UN went down to the opening price. I bought my shares at this price and was again surprised when at the closing bell it went back up . It doesn't seem to have much liquidity and will probably act inversely proportinate on the downside but still love the stock.


----------



## zylon

webber22 said:


> ... there's other talk of possible pipeline takeovers of IPL and others like PPL, pushing up the stock prices


I sure hope that doesn't happen :smilet-digitalpoint

If IPL gets taken out, that will make 4 in my portfolio this year.

It isn't easy to replace a 5 star company.


----------



## My Own Advisor

On one hand, happy to see it rise. On the other hand, I really wish IPL.UN would go lower. Would love to buy more.


----------



## protomok

IPL.UN down 4.27% on Friday, Christmas came early for me  I'll load up some more on Monday if it doesn't bounce back too quick.


----------



## Nemo2

protomok said:


> IPL.UN down 4.27% on Friday, Christmas came early for me  I'll load up some more on Monday if it doesn't bounce back too quick.


Hmmm....we have 500....purchased Feb 05/2009 @ $7.23 (we're up 219.23%)....maybe we should consider grabbing a couple more.


----------



## zylon

Over the past 3 years, price touching or going through the 200 day average when coincident with RSI below 30, have been good places to buy.

If nothing has fundamentally changed with the company, another dip to 200 day average is where I will add more shares.










*- live chart (1year daily):* http://scharts.co/Xw8DS3


----------



## Argonaut

Also, fundamentally speaking the yield touched 5% with the recent dip. That was my own buy trigger. Topped up in my TFSA to 300 shares total.


----------



## Canuck

*Inter pipeline*

Did this really just fall almost $9 before being halted? or is this an exchange error?


----------



## webber22

Looks like there was some kind of oil spill, can't find any news other than a Pennwest major spill. It was halted pending company contact. Last price was 14.21, an almost 38% drop !!!


----------



## Canuck

webber22 said:


> Looks like there was some kind of oil spill, can't find any news other than a Pennwest major spill. It was halted pending company contact. Last price was 14.21, an almost 38% drop !!!


link please to the "some kind of oil spill"


----------



## blin10

nothing on their website... wtf


----------



## Canuck

ya insane that they've said nothing for 45 minutes


----------



## Synergy

There was a spill over the weekend of 5000 litres - Pennwest.

http://globalnews.ca/news/665576/pipeline-spills-more-than-5000-litres-of-oil-in-northern-alberta/

IPL.UN - I'm thinking / hoping it's an error but I can't seem to find any additional information.


----------



## OptsyEagle

All I could find. They say it was operated by Pennwest and they also say it was owned by Inter Pipeline.

http://globalnews.ca/news/665576/pipeline-spills-more-than-5000-litres-of-oil-in-northern-alberta/


----------



## webber22

Not sure if the two are related

http://globalnews.ca/news/665576/pipeline-spills-more-than-5000-litres-of-oil-in-northern-alberta/
http://www.theglobeandmail.com/repo...nd-spill-in-northern-alberta/article12769832/


----------



## blin10

hopefully that sharp drop it's on first 5 minutes, triggered a lot of stop losses


----------



## Canuck

blin10 said:


> hopefully that sharp drop it's on first 5 minutes, triggered a lot of stop losses


hopefully

did the drop happen immediately on opening? wondering if it was news on the weekend or brand new news


----------



## webber22

Looks like somebody f up when it was added to the tsx index on Friday. The funny part is it was added to the LOW VOLATILITY INDEX.
Lucky folks who bought in at 14.21


----------



## Canuck

having a pretty shitty day as it is, didn't help to see that when i woke up...yikers


----------



## supperfly17

webber22 said:


> Looks like somebody f up when it was added to the tsx index on Friday. The funny part is it was added to the LOW VOLATILITY INDEX.
> Lucky folks who bought in at 14.21


http://www.marketwire.com/press-rel...on-unit-price-movement-tsx-ipl.un-1805001.htm

"CALGARY, ALBERTA--(Marketwired - June 24, 2013) - Inter Pipeline Fund ("Inter Pipeline") (TSX:IPL.UN) announces that, on behalf of the Toronto Stock Exchange, Inter Pipeline is not aware of any material event or matters related to its business operations which would result in abnormal trading activity."

Wtf does this mean?


----------



## Homerhomer

it's in the 21+ range now, darn, was hoping for a steal, wonder if all trades in the 14 range will be cancelled.


----------



## blin10

it will not open below 21.15 100%

Last Bid/Size	21.15 / 999 
Last Ask/Size	21.15 / 999


----------



## FrugalTrader

Same here, I was hoping to pick some up for cheap.


----------



## james4beach

This really is curious. Usually when there's some problem brewing, there are advanced signs -- notably higher volume selling the preceding day (that happens as insiders with knowledge dump shares ahead of everyone else learning).

With IPL.UN though, I see totally normal (even low) trading volume in the preceding days.

Still, it's never a good sign when a share price crashes like this. My advice would be to start enacting your exit plans and flag the shares for disposal. How you do that is up to you... my strategy would generally be to let the shares rebound, and when you next see strength to dump into the strength.


----------



## blin10

dude you are clueless...



james4beach said:


> This really is curious. Usually when there's some problem brewing, there are advanced signs -- notably higher volume selling the preceding day (that happens as insiders with knowledge dump shares ahead of everyone else learning).
> 
> With IPL.UN though, I see totally normal (even low) trading volume in the preceding days.
> 
> Still, it's never a good sign when a share price crashes like this. My advice would be to start enacting your exit plans and flag the shares for disposal. How you do that is up to you... my strategy would generally be to let the shares rebound, and when you next see strength to dump into the strength.


----------



## james4beach

How so, dude? What part do you object to?


----------



## Canuck

blin10 said:


> dude you are clueless...


ya a bit, it was obviously a trading error, not exactly a reason to start "enacting an exit plan", if you're a long term holder


----------



## james4beach

How do you know for certain it was a trading error? If trading errors are so easy to come by, how come large caps aren't dropping 40% to 60% all over the place day to day?

It's not normal. It shouldn't happen in a liquid large cap stock.

It could be a sign of disappearing liquidity in markets. Sure it may be a trading error but if there was sufficient liquidity, drops like this shouldn't happen. Basically a decline like this should never happen in a large cap (this is a $6 billion market cap stock) in normal markets.

The fact that it happened either shows you that there is some company problem, OR, that liquidity is becoming poor in the TSX (or maybe just the energy area) and this stock is vulnerable. That would be my interpretation anyway.


----------



## blin10

i agree this def. shouldn't happen with a company 6bill market cap...


----------



## HaroldCrump

james4beach said:


> It could be a sign of disappearing liquidity in markets.
> The fact that it happened either shows you that there is some company problem, OR, that liquidity is becoming poor in the TSX (or maybe just the energy area) and this stock is vulnerable. That would be my interpretation anyway.


It is probably some HFT going crazy.
Some programmer had too much caffeine, perhaps.

This has happened a few times in the last 2 - 3 years even with some high volume stocks on the NYSE.


----------



## james4beach

On the NYSE it could be HFTs, but IPL doesn't have the volume or liquidity for HFTs.

With daily volume under a million shares, there couldn't be HFT activity in IPL.


----------



## Xoron

IIROC Stepped in an canceled all trades before the halt

*IPL.UN - INTER PIPELINE FUND - IIROC MARKET INTEGRITY RULING*
_ALL TRADES PRIOR TO 9:36AM TODAY BELOW $18.80 WILL BE ADJUSTED TO $18.80 OR CANCELLED AS PER IIROC. 

SHOULD YOU HAVE ANY QUESTIONS PLEASE CALL TSX TRADING SERVICES
_​


----------



## HaroldCrump

This is reminiscent of the May 2010 Flash Crash.
Many trades were similarly canceled on that day, incl. FTS down to $14 or so, TA down to $13, etc.


----------



## dubmac

HaroldCrump said:


> This is reminiscent of the May 2010 Flash Crash.
> Many trades were similarly canceled on that day, incl. FTS down to $14 or so, TA down to $13, etc.


 I put in a buy order, but the trading desk called me to inform me that things were messed up - the price was not 14.80 but rather 21.20. Oh well - I tried!


----------



## james4beach

Breaking trades at arbitrary prices is somewhat unfair ... how did they decide on this 18.80 threshold?

What if you were a smart enough buyer to put a limit order at 18.79, why should your trade be broken whereas the buyer at 18.80 gets his trade filled, for an amazingly good profit?


----------



## warp

I just saw all this fuss with InterPipe today. 
As I/we own lots of shares, I was interested in finding out more about what happened.

One of the places with the most and best info was right here on CMF, and so I want to take a moment to thank all the posters here.

I just called IRROC, and was told there was a "technical glitch"...where there were lots of sellers, and few buyers.
I told the gentleman it was near impossible that a stock like Interpipe could fall 30% in 10 seconds.....and he just hemmed and hawed.

Anyway, it is true that all trades below $18.80, done before 9:36 AM this morning, ( before the trading halt), will either be cancelled or re-set at $18.80.

IPL is trading around $22.35 as I write this.


----------



## james4beach

warp said:


> I just called IRROC, and was told there was a "technical glitch"...where there were lots of sellers, and few buyers.
> I told the gentleman it was near impossible that a stock like Interpipe could fall 30% in 10 seconds.....and he just hemmed and hawed.


Is that really what they told you?

If there are lots of people wanting to sell, and nobody wanting to buy, that's not called a technical glitch... it's called the market. That's a (natural) recipe for a crashing price.

Did the industry self-regulatory body simply not like today's trading, and thus cancel the trades? If this is what happened and if that's really what they told you, I think you should consider dumping your shares because it means there are very few buyers of IPL out there.


----------



## My Own Advisor

Agreed james, re: "If there are lots of people wanting to sell, and nobody wanting to buy, that's not called a technical glitch... it's called the market."

I'll be a buyer if prices continue to fall. All pipelines are getting hit.


----------



## gibor365

My Own Advisor said:


> I'll be a buyer if prices continue to fall. All pipelines are getting hit.


so, in what price you will be a buyer?!


----------



## My Own Advisor

I'd like to see IPL.UN go below $20. 

COS and CPG are dropping in price and I'd like to get more of those as well.


----------



## Eder

Another spot where using non limit trailing stops on thinly traded stocks is suicide...I am sad that I didn't get any at $18.


----------



## 6811

Yesterday's incident aside, does anyone have an opinion on what the impact to the stock price will be with the planned corporate conversion?

http://cawidgets.morningstar.ca/Art...IPL.UN&MaxCount=10&popup=true&_=1372151887632


----------



## Synergy

According to Peter Brieger on BNN last night - IPL.UN (Past Top Pick)

"By converting to a corp. they are eligible in a number of global hedge funds. The shares can move higher. 5.2% dividend at present.".


----------



## 6811

Synergy said:


> According to Peter Brieger on BNN last night - IPL.UN (Past Top Pick)
> 
> "By converting to a corp. they are eligible in a number of global hedge funds. The shares can move higher. 5.2% dividend at present.".


Like that!


----------



## Synergy

Here's the full post from the BNN Newsletter...

"Inter Pipeline Fund (IPL.UN-T) Last purchased May 30th at $23.64
Close 06/21: $22.90: One year price target: $26.50; Target gain: 15.5 percent; Yield: 4.9 percent; Target one year total return: 20.5 percent. The company recently announced its intention to convert from an LP to a corporation. This could have a major benefit to the company because there are a number of global index funds that to date haven’t been able to include it but now can. That should add some support to the share price. Since 2003 the company has had an enviable record of increasing distributions to unit holders - $8.44 to 12/31/12. Based on projected cash flow from its long-term contracts, from ’13 to ’18 it is forecasting further cumulative distributions of $7.55. In spite of the potential for higher interest rates, we think the forecast increases in the dividends will lead to higher prices."


----------



## blin10

many didn't like what happened yesterday, I bet that's why it's lagging today


----------



## My Own Advisor

Bought 100+ shares when it was under $20. I wish I had more cash (then) to buy more. Only so much you can do...

I suspect buying more sooner than later before more global index funds pick it up, is a good thing since that will drive up the price.


----------



## Argonaut

Started the day thinking I lost $3000 of my TFSA and ended the day with my team winning the Stanley Cup. Ran the gamut of emotions on that one.


----------



## My Own Advisor

The Hawks played well.


----------



## Nemo2

My Own Advisor said:


> The Hawks played well.


I used to love Rompin' Ronnie! :encouragement:


----------



## warp

I'm hardly Warren Buffet, but I still like Iinterpipe.

If me and my family didn't already own a lot of shares, I am tempted to buy more anywhere around $22.
We have owned it for about 5 years, and it has been an outstanding performer.

Great div yield...with plans to increase it going forward, and good chances for increasing their business into the future too.

Only caveat is the fear in the markets about interest rates rising. Then again I have seen all kinds of press about rising interest rates since 2010.......


----------



## My Own Advisor

No worries warp. I suggest we hold and hold and hold IPL.UN some more.


----------



## birdman

Bought some more yesterday, unfortunately not at 18.00!


----------



## blin10

"September 9, 2013: Inter Pipeline Ltd. ("Inter Pipeline") (TSX: IPL) announced today that its board of directors has approved a 13% increase to its monthly cash dividends from $0.095 to $0.1075 per share commencing with its September 2013 dividend payable in October 2013."

kicking myself not buying alot more of this jam... but can't complain  i have a feeling they will raise it again by new years


----------



## explorer416

This thing spiked today! $27.50?! Does anyone know the reason for the sudden jump in price?


----------



## blin10

explorer416 said:


> This thing spiked today! $27.50?! Does anyone know the reason for the sudden jump in price?


divi increase


----------



## Jungle

Yup 13% increase starting with the Oct payment. 

http://www.4-traders.com/news/Inter...nces-Increase-to-Monthly-Dividends--17252601/


----------



## Calgary_Girl

I love this stock so much I would marry it! :love-struck:


----------



## webber22

I think there was a leak about the dividend increase, since a trading halt is not normally used to announce increases. A quick google search listed two sources that posted the news, one at 09:00 ET the other at 1 pm ET, trading was halted around 3pm ET.


----------



## yyz

Makes sense since the stock was already up pretty good before the "official" announcement.


----------



## Jon_Snow

Yay!!! I own this stock!

Booo! I only own 300 shares. :neglected:


----------



## Eder

Ship It! BooYa


----------



## PuckiTwo

Just recvd TDW mail that as of Sep 5, 2013 Interpipeline Fund (IPL-Un.To) converts into a corporation (IPL.To). Interesting is that the dividend increase was announced after that date. Will the conversion impact the stock price?


----------



## yyz

The conversion has already happened.I would say the dividend increase at least temporarily affected the stock price.


----------



## My Own Advisor

Only 300 shares Jon?

Still pretty good 

I have just over 200 in TFSA.

BTW - did you see they hiked the dividend?


----------



## My Own Advisor

calgary_girl said:


> i love this stock so much i would marry it! :love-struck:


lol.


----------



## nirianto

Am I too late to buy into IPL now that it has risen from recent low of $22? Trend looked very stable over 5-yrs period.


----------



## AltaRed

A darling to be sure, but does its business vulnerabilities justify its P/E multiple? Not much oil sands pipeline expansion will happen if there is no additional takeaway capacity, and the NGL extraction business has limited growth (and highly vulnerable to decreasing margin when natural gas prices increase)


----------



## Calgary_Girl

Jon_Snow said:


> Yay!!! I own this stock!
> 
> Booo! I only own 300 shares. :neglected:


Hey, you gotta start somewhere right? Dripping has been good to us - we own slightly over 6,000 shares.


----------



## blin10

Calgary_Girl said:


> Hey, you gotta start somewhere right? Dripping has been good to us - we own slightly over 6,000 shares.


nice, if market doesn't tank i really think it'll double in the next 5 years


----------



## doctrine

IPL trades at a high multiple for sure, but so far they've been able to execute. The stock would fall hard if they missed but so far so good. I don't own any shares, but I'm always on the sidelines waiting for opportunity. Even though it's up, I'd still say it would have to be below $20 before I bought, but if I had shares I would see no real reason to sell especially if they're still giving 10% dividend increases.


----------



## Calgary_Girl

blin10 said:


> nice, if market doesn't tank i really think it'll double in the next 5 years


We've come close a couple of times to taking some profit but then the company does something (like increase the dividend :biggrin and we hold on for a bit longer.


----------



## Jungle

$150k in one stock= baller

Also I believe they have raised dividend 16% this year.


----------



## Jon_Snow

I have 50k in CPG... a bit nervous about it to be honest.

150k in one stock would interfere with my sleep quality. :tongue-new:


----------



## My Own Advisor

@CalgaryGirl, wow. I knew you held a bunch, but geez! 

Well played, you must be WAY up.

I think my biggest holding(s) are BMO and KO. Over 300 shares in each. 

@Jon-Snow, looking to buy more CPG actually, I like the price around $37 or lower and might get some soon. 

I see lots of upside for IPL over time.


----------



## Calgary_Girl

@MOA - Yeah, we've done well. We bought the bulk of IPL in 2008 @ $8.05 and have been dripping ever since. Our ave. cost per share is $10.00 :biggrin:


----------



## My Own Advisor

@CalgaryGirl - Wow.


----------



## Jungle

If I recall nemo was in around that price. But yea congrats on buying that many @ $8! Was it scary during those times market was crashing?


----------



## Calgary_Girl

@Jungle: Actually, not scary at all. We were gung-ho back then probably because we were mortgage-free and we were only 35 and 37 and knew we could afford to gamble a bit  Hubby works in the oil and gas industry and had always heard good things about IPL and the Management team. We're both risk-takers but with his work experience as a Power Trader he's more tempted to "go big or go home" than I am (although I'm glad I listened to him this one time) :biggrin:


----------



## Calgary_Girl

Did everyone else get their Sep. 16th dividend from IPL yesterday (based on the Aug. record date)? I didn't get my div!!!! Grrrrrr! My broker is giving me some song and dance about it being due to the conversion to a Corp. and that I should get the Oct. div. What about September's div? I can't find any news that IPL changed their minds about paying the Sept. div.


----------



## yyz

Got mine last night ,I'm with BMO Investorline


----------



## BlackThursday

Calgary_Girl said:


> Did everyone else get their Sep. 16th dividend from IPL yesterday (based on the Aug. record date)? I didn't get my div!!!! Grrrrrr! My broker is giving me some song and dance about it being due to the conversion to a Corp. and that I should get the Oct. div. What about September's div? I can't find any news that IPL changed their minds about paying the Sept. div.


Received as usual yesterday via BMO Investorline. Follow up with your broker. The delay/omission would seem to be on their end.


----------



## Calgary_Girl

Thanks for confirming that there was a Sep. div. payment. I'm with CIBC Investor's Edge (although not for long if they don't get their act together)!


----------



## liquidfinance

Yes also received here. (Questrade)


----------



## My Own Advisor

Didn't get it yet. Only see the changeover from trust to corporation for September 9.


----------



## 6811

Got mine (i*Trade)


----------



## Calgary_Girl

MOA - who do you use? Just talked to CIBC IE. I should get the div tonight or tomorrow at the latest.


----------



## blin10

royal bank gets divis the fastest, then td and bmo after... not sure why they all different but they are


----------



## Nemo2

Got ours...TDWH


----------



## Jungle

My Own Advisor said:


> Didn't get it yet. Only see the changeover from trust to corporation for September 9.


Same. This is with Questrade TFSA. 
I did live chat this morning and the guy told me to contact IPL investor relations.. lol


----------



## liquidfinance

Jungle said:


> Same. This is with Questrade TFSA.
> I did live chat this morning and the guy told me to contact IPL investor relations.. lol


That's strange seeing as my divi from Questrade were showing when I logged in on Monday morning.


----------



## londoncalling

Can anyone provide insight on tax implications of the conversion re: capital gains? This is my first conversion. I noticed my average price went from <$16.00 to $24.45. I hold this one in a registered account(LIRA). Does that matter? What about if it was held in a non registered. FWIW I also received my dividend on the day it was to be paid.

Cheers


----------



## My Own Advisor

You should be fine in a LIRA, very similar to RRSP, but locked-in until age 55 or whatever the rules are in your province.


----------



## FrugalTrader

Got mine from Investors Edge on Sept 16th.


----------



## Jungle

liquidfinance said:


> That's strange seeing as my divi from Questrade were showing when I logged in on Monday morning.


Yes I've never had a problem before. Now this morning, still no dividend and they are doing an investigation 3-5 busines days.


----------



## Calgary_Girl

Got my dividend last night as promised


----------



## My Own Advisor

Mine came through today, the September dividend payment. 

This wasn't a special dividend was it?


----------



## Synergy

Tax Election FORM - IPL. 
http://www.interpipeline.com/investor/conversioninformation/tax-election-form.cfm

I purchased some IPL within my non-registered account knowing that it was going to eventually be converted to a corp. Since my ACB is pretty close to the price of August 30th, 2013 ($24.35), I don't plan on completing the Tax Election Form. *Question*: I'm assuming that my new ACB will be based on the share price of August 30th, 2013, similar to if I would have sold all my shares at $24.35, and repurchased the same number of shares at the same price but without any transaction (sell/buy) fees. Does this sound correct....?

Most CMF members would likely be holding IPL in a registered account prior to the conversion to a Corp so won't have to bother with any of the above...


----------



## My Own Advisor

Correct Synergy (I've always held IPL in TFSA) but the new ACB sounds right to me, on a go-forward basis.


----------



## Synergy

My Own Advisor said:


> Correct Synergy (I've always held IPL in TFSA) but the new ACB sounds right to me, on a go-forward basis.


Thanks. I wish they'd increase the TFSA contribution limit up to 10K per year so I'd have more room to invest - sheltered from the tax man.


----------



## bettyboop

Is that it now for the conversion? I'm wondering if I can transfer it out of my TFSA and transfer something else in? Or would I have to wait till next year?
I've never transfered anything out of my TSFA only in.


----------



## My Own Advisor

Bettyboop, if you take money out of your TFSA this year (2013), and you're at your contribution limit, you must wait until 2014 to put the money back in.


----------



## bettyboop

My Own Advisor said:


> Bettyboop, if you take money out of your TFSA this year (2013), and you're at your contribution limit, you must wait until 2014 to put the money back in.


So stocks are the same as cash then when it comes to withdrawals, oh well. Thanks.


----------



## My Own Advisor

@Bettyboop, you can buy or sell your holdings inside the TFSA as much as you wish, but cannot withdraw cash from the account if you're at your contribution limit and try to put money back in, in the same calendar year:

http://www.tfsa.gc.ca/


----------



## Y3LLoWF3LLoW

Whats going on with IPL? I wanted to get in at 25$, I blinked and now its just climbing!


----------



## Jungle

It's been going in that range now over the last few weeks. But it seems there is a little rally lately in cad stocks everything is going up except the gold miners.


----------



## webber22

It's in a sweet spot, earnings come out Nov 7th - could be a blow-out quarter maybe. Month-end window dressing is being applied now also


----------



## Canadian

I started a small position not long ago - and I'm enjoying the capital gain - but I'm hoping there's a pullback so I can add!!


----------



## Canadian

The stock is experiencing a bit of a pullback lately. Anybody buying at these levels?


----------



## blin10

crazy, keeps popping up... bet they gonna increase divi very soon


----------



## LOST

*ipl long-term holder*

Bought @ $8.00. Sold @ Nah!! Not quite yet!


----------



## blin10

LOST said:


> Bought @ $8.00. Sold @ Nah!! Not quite yet!


nice, hopefully more then 500 shares :>


----------



## gibor365

blin10 said:


> crazy, keeps popping up... bet they gonna increase divi very soon


I just don't understand how it's poping up and increasing dividends with EPS	$-0.30 ???


----------



## Canadian

I don't see a dividend increase yet. Maybe later this year.


----------



## Synergy

blin10 said:


> crazy, keeps popping up... bet they gonna increase divi very soon[/QUOTE
> 
> It's trying to play catch up with PPL


----------



## blin10

52 week high again... man this and ppl are going crazy...


----------



## leeder

I don't know who said, but I remember couple years ago, someone called IPL a mini Enbridge...


----------



## Calgary_Girl

Thank you IPL and PPL! :love-struck:


----------



## My Own Advisor

They have been rockin'....just wish I had money to invest sooner!


----------



## Killer Z

leeder said:


> I don't know who said, but I remember couple years ago, someone called IPL a mini Enbridge...


I've been reading a lot of the older threads, and I believe the credit is to go to Argo ...... someone asked why IPL over ENB in his infamous 5-pack, and he responded more or less with the idea that IPL had much more room to grow ....... it appears he was right


----------



## Canadian

I have a small position in IPL. If there's a slight pullback I want to add to my position or initiate a position in PPL.


----------



## Canuck

ugh what to do, IPL and PPL are now my largest holdings, PPL is 8% of my portfolio and IPL is now close to 6%. Do i trim?

I trimmed IPL about 18 months ago because it was creeping up there, in retrospect I never should have done that.

Kinda feel like trimming and jumping in Baytex


----------



## PatInTheHat

Canuck said:


> ugh what to do, IPL and PPL are now my largest holdings, PPL is 8% of my portfolio and IPL is now close to 6%. Do i trim?
> 
> I trimmed IPL about 18 months ago because it was creeping up there, in retrospect I never should have done that.
> 
> Kinda feel like trimming and jumping in Baytex


I would have no problem trimming both of these a little to a 5% range. Such an insane run even through this market correction. Then again I sold both and am filled with regret. Such a tough call with these winners.


----------



## blin10

Canuck said:


> ugh what to do, IPL and PPL are now my largest holdings, PPL is 8% of my portfolio and IPL is now close to 6%. Do i trim?
> 
> I trimmed IPL about 18 months ago because it was creeping up there, in retrospect I never should have done that.
> 
> Kinda feel like trimming and jumping in Baytex


what's wrong with a quality stock to be 8% of your portfolio ? that 5% rule is complete BS

i got ipl at 11% and ppl at 13% of portfolio, even if they tank 30% i'll still be in green


----------



## Canuck

blin10 said:


> what's wrong with a quality stock to be 8% of your portfolio ? that 5% rule is complete BS
> 
> i got ipl at 11% and ppl at 13% of portfolio, even if they tank 30% i'll still be in green



well I guess that depends on how many shares you have. If you have $100,000 of one stock then losing 30% can be pretty painful, if you have $1000 worth then a $300 loss is no big deal


----------



## Synergy

Canuck said:


> well I guess that depends on how many shares you have. If you have $100,000 of one stock then losing 30% can be pretty painful, if you have $1000 worth then a $300 loss is no big deal


It's all relative to the individual, $300 bucks is a lot of money to some (painful to lose), while $300,000 is nothing to others (no big deal). Relative percentage is the way to go in my opinion.


----------



## Canuck

Synergy said:


> It's all relative to the individual, $300 bucks is a lot of money to some (painful to lose), while $300,000 is nothing to others (no big deal). Relative percentage is the way to go in my opinion.



ya truth to that i suppose..


----------



## LOST

I'm with Calgary girl. Thank you IPL and PPL. :love-struck::chuncky:


----------



## Calgary_Girl

LOST said:


> I'm with Calgary girl. Thank you IPL and PPL. :love-struck::chuncky:


I'm a long-term holder as well. Our average price for IPL is in the $10-range and for PPL it's in the $16-range. I don't think I have the guts (or if I'm crazy enough) to ever sell these two! :biggrin:


----------



## Canuck

Calgary_Girl said:


> I'm a long-term holder as well. Our average price for IPL is in the $10-range and for PPL it's in the $16-range. I don't think I have the guts (or if I'm crazy enough) to ever sell these two! :biggrin:


Do you mind me asking what percentage of your portfolio these 2 stocks are?


----------



## warp

We have lots of IPL, ( and PPL too) , in all types of accounts...cash accounts, registered accounts, Tfsa's, and Resp too. They have become our largest holdings.

Most were purchased years ago during the recession. Both have been wonderfull performers, and I would expect them to continue to be so, though perhaps at a slower pace.

I have always felt that one should let his winners run, unless you detect a specific reason to sell. With IPL, ( and PPL), I can see no reason to sell now. Both have growth ahead, both pay a nice dividend that is safe and secure...and both have a history of raising the dividend regularly.......a nice combination all round.


----------



## Kaitlyn

This is one that has been on my watchlist for too long. Never picked the good time to buy in, and as a result never did!

But now, here we are with it sitting near it's new all time high and I'm not sure I can buy at the top - even though I believe further growth!

Ugh.


----------



## Calgary_Girl

Canuck said:


> Do you mind me asking what percentage of your portfolio these 2 stocks are?


IPL is almost 12% of our total portfolio (Reg. and Taxable) and PPL is 10%. Like Warp said though we're letting our winners run and our ave. cost on these two are so low that I'm not too worried about the stock price going down. Actually, I would prefer it because the monthly DRIP would then allow us to get more shares!


----------



## LOST

I also have a high % of portfolio into IPL and PPL. Got in when it was cheap,$9 on IPL and $13 with PPL. I have made the mistake of selling off winners due to an overabundance and buying others for higher dividend yield, better diversification etc . What usually happens is new stock goes down and pipes do up. Then I end up selling off stock and repurchasing IPL,PPL back. It is not often you get a 3,4 or even 5 bagger in portfolio. And in your own domestic market to boot.


----------



## Killer Z

I feel like I am standing at the bottom of a fast travelling escalator afraid to step on ........there appears to be no end to the gains IPL continues to make.


----------



## Nemo2

Killer Z said:


> .......there appears to be no end to the gains IPL continues to make.


Ain't it great? (If I go by our 'current dividends based on purchase price' we're looking at 17.84% Yummy.)


----------



## My Own Advisor

Not that great as a buyer....can't buy more with run up....


----------



## webber22

There's a rumour it's being added to a world index, but so far it's just a rumour


----------



## Calgary_Girl

Another good day for IPL... :biggrin:


----------



## Jon_Snow

Truly the gift that keeps on giving... Just wish I had bought more, as usual.


----------



## My Own Advisor

Same. Calgary Girl wins as for getting in early and riding this wave I think!


----------



## blin10

My Own Advisor said:


> Same. Calgary Girl wins as for getting in early and riding this wave I think!


ya she does, 6000 shares that she has must be nice :> btw, we need another divi raise for ipl, it's been a while :>


----------



## My Own Advisor

For sure blin. 

What's your guess and when? 

I say it will be announced on Feb. 20th (next week) and the divi. will grow by 5%. 

Geez, 6000 shares...wild...


----------



## blin10

I think they'll raise in few months.... next week would be sweet :>



My Own Advisor said:


> For sure blin.
> 
> What's your guess and when?
> 
> I say it will be announced on Feb. 20th (next week) and the divi. will grow by 5%.
> 
> Geez, 6000 shares...wild...


----------



## Canadian

I'm with blin here. I'm anticipating the increase a bit later this year. I would love to be proven wrong, though!


----------



## Calgary_Girl

blin10 said:


> ya she does, 6000 shares that she has must be nice :> btw, we need another divi raise for ipl, it's been a while :>


Actually, 6,170 and not including the DRIP in the new few days which will push us close to 6,200 (but who's counting???!!!!!) :biggrin: 

I vote for another raise as well...this job is stressful! :rolleyes2:


----------



## My Own Advisor

Holy shares 

Seeing compounding in action every month!

I recall we have about 1/20th of that!


----------



## Synergy

All this positive energy is scaring me, perhaps time to sell my shares, or not :biggrin:

The growth prospects look good over the few yrs. If they keep growing it should help protect them against potential future interest rate risks.


----------



## doctrine

IPL looks so expensive. I thought they were expensive at $22 a year ago and here they are at nearly $29. The only good thing on their financial sheets is the 13% revenue growth year over year, which is lowered somewhat by 6.3% more shares outstanding. Shareholder equity per share is down year over year. Price/book is 5.5:1, which makes Enbridge look cheap at 3:1. Perhaps the growth will catch up in revenues/earnings. Good luck.


----------



## protomok

Is IPL expensive? Or is it cheap? The stock has had an awesome run but has had solid revenue growth and net income growth to back it up. I'm much more interested in revenue and net income than shareholder equity for a utility company...the shareholder equity is being paid out to stockholders in dividends.

IPL has long term contracts in place for their pipelines and clear expansion plans 95% of which are going into oil sands transportation projects which IMO is the way to go. This is a simple, predictable, boring company...about as low risk as it gets.

I think the biggest risk for this story is rising interest rates. IPL has turned into a bond alternative - safe, predictable dividend returns which I believe has helped fuel the stock price. But if interest rates rapidly rise, people will sell utilities, go back to bonds, AND IPL's 4 billion dollars of debt - half of which has variable interest rate exposure becomes a big problem.

I think the expensiveness of IPL is really determined by where interest rates are going.


----------



## Gumball

http://www.marketwired.com/press-re...ial-and-operating-results-tsx-ipl-1881173.htm 

IPL just announced record 2013 financial and operating results...

2013 Highlights

•Acquired Pipeline Assets Corp., the former owner of Inter Pipeline's general partner, and subsequently completed conversion from a limited partnership structure to a dividend paying corporation

•Generated funds from operations* of $473 million, a new annual record

•Low annual payout ratio* of 74 percent

•Increased dividend payments to shareholders by $0.18 per share, the largest annualized increase in Inter Pipeline's history

•Normalized net income of $302 million after excluding one-time non-cash internalization costs of $349 million

•Incurred record growth capital expenditures* of $1.7 billion during the year

•Oil sands and conventional oil pipeline volumes averaged 1,015,000 barrels per day (b/d), also a new annual record

•Executed long-term transportation agreements supporting a $2.9 billion integrated development program of the Cold Lake and Polaris pipeline systems

•Announced a $45 million expansion of the Polaris pipeline system to accommodate additional diluent deliveries to Imperial Oil's Kearl oil sands project

•Announced long-term transportation agreements with Canadian Natural Resources and Canexus Corporation on the Cold Lake pipeline system

•Entered into a new long-term ethane sales agreement with NOVA Chemicals

•Issued $500 million of senior medium-term notes at an attractive interest rate of 3.448 percent 
Fourth Quarter Highlights

•Generated funds from operations* of $135 million, a new quarterly record

•Raised $345 million in new equity through the highly successful issuance of Inter Pipeline Ltd. common shares

•Announced a long-term agreement to provide diluent transportation service to the Hangingstone oil sands project under development by Athabasca Oil Corporation

•Completed an $80 million pump station expansion on the Cold Lake system


----------



## yyz

Nice move in this one today.The stock has been on a bit of a run lately.Any news to spur todays action?


----------



## leeder

Happily holding this until the fundamentals change with this company or with pipeline & energy infrastructure as a whole.


----------



## webber22

webber22 said:


> There's a rumour it's being added to a world index, but so far it's just a rumour


Rumour was true, added to MSCI index
http://www.msci.com/eqb/pressreleases/archive/MSCI_Feb14_QIRPR.pdf
http://www.theprovince.com/business...February+2014+Index+Review/9500645/story.html


----------



## Jon_Snow

I bought this mostly as a safe, steady dividend play. Now I'm up 30% in a relatively short timeframe. Pretty sweet.


----------



## Nemo2

Up 314% since purchasing them in Feb/09. Yummy.


----------



## Calgary_Girl

Cha ching! I LOVE this stock! :love-struck:


----------



## Jungle

Sold this one, of course it flys high now, lol


----------



## 6811

I never did thank Webber22 for bringing this one to my attention, and Zylon's 200 day moving average charting, back in February 2013. I started a small position then, added a couple more buys during the year, and am currently up about 27.8%. 

Thank You Webber22 and Zylon! :biggrin:


----------



## LOST

I got my tips from Peter Brieger and David Burrows from BNN. I was attracted to the monthly income and in my mind , IPL was going to become the next ENB. I've added to it throughout the years, not caring to add on dips or any such thing. They are both 4 baggers and I have a lot of them. They are both interest sensitive, IPL more than PPL. I think that they will continue to go up as the older generation is seeking lost income from their bond portfolio's. Yes, they are pricey, but always were. I hope I haven't jinxed them.


----------



## My Own Advisor

I used to hold enough shares to DRIP it, now with price run up, might be out of luck. Oh well, it could always be worse!


----------



## Canuck

i always notice that when a stock is added to an index it jumps like crazy in the last minute of trading before the deadline, but then falls almost as much the next day, so don't get too excited about Fridays move although i could eat my words.


----------



## doctrine

Thats because traders bid up the price as the move into the index is known. Look at CPG - it hasn't been higher since it was added to the TSX 60, when traders gamed the indexers into paying the all time highest price. Same with IPL. Good for holders, bad for indexers.


----------



## GoldStone

doctrine said:


> Good for holders, bad for indexers.


Bad but irrelevant. It's a tiny part of an index.


----------



## Synergy

The good old "index effect".

This was an interesting article from quite a few years ago - The Shrinking Index Effect": http://www.standardandpoors.com/ser...lobwhere=1243628037820&blobheadervalue3=UTF-8


----------



## Killer Z

After watching this stock for almost 4 months, I finally jumped in on this morning's pullback. $28.76/share. Hopefully there is more run to come.


----------



## Nemo2

Killer Z said:


> After watching this stock for almost 4 months, I finally jumped in on this morning's pullback. $28.76/share. Hopefully there is more run to come.


Pulled back due to a new offering of common shares @ $28.90


----------



## AltaRed

P/B (over 4) seems way too high (twice that of TRP) for a pipeline although in the same nosebleed territory as ENB.


----------



## blin10

AltaRed said:


> P/B (over 4) seems way too high (twice that of TRP) for a pipeline although in the same nosebleed territory as ENB.


pipelines are always expensive in terms of valuation... when I bought ipl at 17 i thought it was expensive, when i bought at 19 I thought same thing, then I bought more at 23 and thought same thing...


----------



## AltaRed

blin10 said:


> pipelines are always expensive in terms of valuation... when I bought ipl at 17 i thought it was expensive, when i bought at 19 I thought same thing, then I bought more at 23 and thought same thing...


Yeah, but how much more growth can you see in this area? There is little promise in further major growth in dilbit takeaway capacity either to the Pacific, Gulf Coast or the St. Lawrence. Incremental growth for sure, e.g. a bit more rail, added pumping stations, maybe a TransMountain expansion, maybe an Eastern line (depending on the PQ). Lots of maybes 2-5 years out, but no near term double digit percentage growth rates. I see the likes of PPL and IPL pulling back to P/B of ~2-3 before possibly going higher. Also remember some of these companies including AltaGas have been making obscene money on their midstream business. Margins will be squeezed due to increases in the price of feedstock.

I won't be participating in the IPO of this new secondary offering. Looked at it first thing this morning at Scotia iTrade.


----------



## Time4earlyretirement

When IPL was at 26 I was waiting for it to go to 25 and missed that train. Now I think its a bit pricey; have switched my attention to Whitecap, which coincidentally had some good news released today. 

Still keeping an eye on this though, would consider going in at the 27ish range.


----------



## blin10

AltaRed said:


> *Yeah, but how much more growth can you see in this area? *There is little promise in further major growth in dilbit takeaway capacity either to the Pacific, Gulf Coast or the St. Lawrence. Incremental growth for sure, e.g. a bit more rail, added pumping stations, maybe a TransMountain expansion, maybe an Eastern line (depending on the PQ).* Lots of maybes 2-5 years out, but no near term double digit percentage growth rates*. I see the likes of PPL and IPL pulling back to P/B of ~2-3 before possibly going higher. Also remember some of these companies including AltaGas have been making obscene money on their midstream business. Margins will be squeezed due to increases in the price of feedstock.


I don't know how you invest (since you expect double digit growth near term) but a lot of people (including me) invest for 2years+... I'm not even counting on double growth in 5 years, if I can make 5%divi and 5% share price increase per year that's more then enough in terms of my goals and expectations (if it doubles then it's a bonus)...

you can say same thing how CP, CNR, ENB, all banks are expensive, there's a reason for it...


----------



## AltaRed

I meant, how much oil production growth can you see happening with all the bottlenecks leaving Alberta? Without meaningful percentage increases in export capacity growth in the next 2-5 years, IPL and others will not be building much in the way of new pipelines nor collecting new/incremental tolls shipping dilbit. Seems to me, current multiples in IPL suggest continued momentum in growth aka the past. The issue as I see it is IPL stock prices could easily stall in its current range for several years as EPS growth stalls and P/B ratios tighten, with the only return to investors being its dividend. 

Note how FTS has stalled in stock price growth over the last few years with the only near term upside being its US acquisition....assuming it is accretive to EPS.

Added: I think once the market realizes oil production/export growth decreases, P/B values will come down. If IPL had a P/B in the order of 2, I would like it. One cannot compare the crystal ball future of IPL with the railroads or banks that do not have ceilings* in growth likely to hold them back.

*Political ceilings such as First Nations, BC gov't, PQ gov't, the effectively neutered Obama administration hating pipelines these days.


----------



## doctrine

> P/B (over 4) seems way too high (twice that of TRP) for a pipeline although in the same nosebleed territory as ENB.


I had the P/B at 6, which is double that of Enbridge. If not for the last two equity issues, P/B would be even higher. IPL is set up for perfection; I don't see any opportunity for new investors (including myself). High valuations mean lower future returns - especially when people are buying in even though they admit it is expensive.


----------



## Calgary_Girl

Holy smokes! New high this morning! I bought the bulk of this stock between $8 and $9 and now I'm really tempted to finally take some profits this morning. So hard to pull the trigger though!


----------



## Killer Z

Calgary_Girl said:


> Holy smokes! New high this morning! I bought the bulk of this stock between $8 and $9 and now I'm really tempted to finally take some profits this morning. So hard to pull the trigger though!


I too am having a hard time taking profits with this one, especially as it is DRIPing .......


----------



## Calgary_Girl

Killer Z said:


> I too am having a hard time taking profits with this one, especially as it is DRIPing .......


Any news on what's causing the uptick? Can't find any news this morning. I'm DRIPing this one as well. Have 6300 shares.


----------



## blin10

man ipl,ppl,vsn rocking...  galgary girl is balling, that's a quarter of mill of ipl, damnnn


----------



## Synergy

Calgary_Girl said:


> Any news on what's causing the uptick? Can't find any news this morning


I couldn't seem to find any new news either. The latest news I'm aware of was on July 18th - "IPL announces completion of the first phase of the polaris pipeline".

http://www.interpipeline.com/news/news-releases.cfm?newsReleaseAction=view&releaseId=187


----------



## Canuck

blin10 said:


> man ipl,ppl,vsn rocking...  galgary girl is balling, that's a quarter of mill of ipl, damnnn


great day! 

add BCE, BA & ALA to that list. Plus ENB, ENF and TRP just blew past their all-time high


----------



## marina628

I sold half mine today as it was 10.4% of my RSP ,my average cost was $22.94 have the cheaper ones still in my TFSA from Argo 5 pack


----------



## blin10

i'm not sure if selling top pipelines is a good idea, maybe in the short term it'll pull back, but they got a ton of projects lined up, they dividend will keep going up... it's really hard to replace these monopolies


----------



## Jon_Snow

It's like Christmas in July. :biggrin:


----------



## yyz

Indeed Christmas in July! I did sell about 80% of my holdings but would buy some back on a pullback and I think we'll see one.IPL can be a volatile stock.


----------



## Eder

No reason to cheer unless you sell. It was not long ago IPL flash crashed to under $18...I was cheering then since I could buy more.


----------



## marina628

I try to keep one stock at 5% or less of the value of my RSP that is reason I sold it .


----------



## Sherlock

I sold my IPL way back and bought VSN in its stead. What do you guys think is a good point to buy IPL again?


----------



## My Own Advisor

Continue to hold IPL. Can't see any reason to sell.


----------



## Gumball

Long IPL... still have not heard any news as to why the spike in the stock yesterday? I dont think the announcement on the progress on the Polaris line was enough to do it...


----------



## My Own Advisor

marina628 said:


> I sold half mine today as it was 10.4% of my RSP ,my average cost was $22.94 have the cheaper ones still in my TFSA from Argo 5 pack


What will you buy instead marina? You don't let those winners run?


----------



## ashin1

holinding IPL for the long haul, that dividend growth is just too sexy


----------



## Calgary_Girl

Well, at the end of the day, I chickened out and only sold about 300 shares. Still have 6,008 shares left  Will probably throw the $10K towards the mortgage. Watching IPL yesterday was stressful!


----------



## My Own Advisor

6,008 shares??? :biggrin:

I think I have 6,000 shares across my entire stock portfolio


----------



## warp

I/we have held Interpipe for years, and like "advisor" I can't see any reason to sell.
Collectting these incresed divs over the years has been lovely.

We actually hold over 7000 shares, and have done very well with them, as we have with other pipelines like Pembina, Veresen, and TRP. Never did buy Enbridge , though, as it always seems overpriced, yet always seems to go up. That was a mistake.

So much for the old adage that pipelines are boring.

Another div increase from IPL would be nice.


----------



## warp

Just came across an interesting article on Interpipe, on the SeekingAlpha site. The authour seems to like IPL going forward.

For any interested parties here's the link.

http://seekingalpha.com/article/234...wth-company-is-on-a-tear-and-its-not-over-yet


----------



## Nemo2

warp said:


> Just came across an interesting article on Interpipe, on the SeekingAlpha site. The authour seems to like IPL going forward.
> 
> For any interested parties here's the link.
> 
> http://seekingalpha.com/article/234...wth-company-is-on-a-tear-and-its-not-over-yet


Read it this a.m. author sounds very positive.


----------



## fatcat

warp said:


> Just came across an interesting article on Interpipe, on the SeekingAlpha site. The authour seems to like IPL going forward.
> 
> For any interested parties here's the link.
> 
> http://seekingalpha.com/article/234...wth-company-is-on-a-tear-and-its-not-over-yet


i like seeking alpha quite a bit for usa stocks (and it also covers canadian stocks especially energy as we see here) but it does tend to have a bullish bias i think ... anyone at all can write an article for sa, no qualifications are required but i do think it is always worth a look

i have enb, trp and ppl but no ipl yet


----------



## Cents

Anybody selling or are you hanging on for the ride? I sold 300 at $34.40 and 300 at $35.00 on the last jump in the SP (felt I needed to take a bit off the table and also pay for the bathroom reno), but am sitting on the rest. SP is at $36. What SP will it take for you to give up the divy and future upside and take the CG? This is my biggest gainer, may need to spread it out over a couple of years. The gain's nothing like Calgary_Girl has, but its not small potatoes either.


----------



## londoncalling

I sold a 1/3 a few years ago for a nice profit(believe it is posted here somewhere). Won't do that again.


----------



## Killer Z

I am having a tough time taking profits on this one .........


----------



## Canadian

I have no plans to sell. The company has too many projects in the pipeline (pardon the pun) and I see a lot of future growth. I'm actually waiting for an opportunity to buy more...


----------



## My Own Advisor

I'm letting this one run....more dividends, more cash flow, more purchases going forward.


----------



## birdman

Bought it around 10.00 and just before it started its run. Was thinking selling at 20., then 30. and now its a long term hold and part of my core holdings.


----------



## blin10

unloaded 1/5 around these levels, but i think it'll keep going up


----------



## doctrine

As an outsider looking in (and of course envious of past returns), I wouldn't buy as it's so expensive, with a P/E on IPL at 35 and the yield down to 3.5% with slowing dividend growth. Hopefully, the oil growth continues. Of course, I said this back in March and it's gone up another 20% (with no dividend growth)


----------



## Synergy

Still holding, I'm not adding to my position but I have no plans on selling at this point. I just wish I could go back in time and buy more!


----------



## BlackThursday

doctrine said:


> As an outsider looking in (and of course envious of past returns), I wouldn't buy as it's so expensive, with a P/E on IPL at 35 and the yield down to 3.5% with slowing dividend growth. Hopefully, the oil growth continues. Of course, I said this back in March and it's gone up another 20% (with no dividend growth)


They increased the dividend 13% last September.
They increased it 6% the November before that.
I would expect the next annual increase, if any, to be announced in the September - December timeframe. Not between March and now.

What is the "slowing dividend growth" you perceive?


----------



## doctrine

Their three last increases were December 2012, Jun 2013 then Sep 2013 - three increases in 9 months, then no increases in 11 months. Perhaps they will increase it again this year, although their payout ratio is above 100% of net earnings - I have it calculated at about 120%.


----------



## BlackThursday

doctrine said:


> Their three last increases were December 2012, Jun 2013 then Sep 2013 - three increases in 9 months, then no increases in 11 months. Perhaps they will increase it again this year, although their payout ratio is above 100% of net earnings - I have it calculated at about 120%.


A 13% increase in a year would seem pretty impressive for any dividend payer.
So, would you rather they distributed a 13% increase over multiple announcements in a year? 
Does this make for better dividend growth in your (odd) way of considering these things?


----------



## ashin1

Holding this one for many years to come. Feelsgoodman.Jpg


----------



## doctrine

It is good, I'm just wondering if dividend growth will slow down (my theory is it will, which so far has been wrong). Although revenue and earnings are growing, it isn't really on a per share basis (20% growth in shares issued in the last 21 months). Yet IPL trades at 7.4 times revenue and 35 times earnings. They do have a good underlying business, so it will all be okay I'm sure.


----------



## Eder

I think their payout ratio is about .76 based on cash flow.They issued a lot of shares/debt but their capex was double this amount. Still pretty pricey stuff but like others here I'll continue to hold IPL hoping for further 35%/yr total returns.


----------



## Cents

Closed up $.12 to $36.10 today. Not everyone thinks that IPL will trend up though.
Here is a comment from Brian Acker (not one of my BNN favourites) on IPL: "There is a huge bubble brewing in the pipeline stocks. Closed at $35.98. His model price is $30.60, a negative 15%. Trading at a valuation of almost 4X Book. This is the highest valuation these companies have ever been in the last 20 years. Yield of 3.6%"
Anyone agree with him and so is selling at these levels?


----------



## yyz

I sold out about 80% of my positions in the last week.It was a good run but I think it's due for a pullback.I could easily be wrong though.


----------



## blin10

this thing is insane, i think they will raise divi in a month or two


----------



## leeder

Bought last year at about $25.10. At the time, everyone was saying it was expensive and some BNN guests said there's no more room to grow and will pull back. Fast forward to now.... trading at $36.77. Lesson learned: Buy quality companies and hold for the long term. It really doesn't hurt when this stock pays a solid and growing dividend.


----------



## Synergy

leeder said:


> everyone was saying it was expensive


Same goes for CNR when I purchased around $58 - "too expensive, wait for a pull back, etc.". I would have missed a great run. Similar to many other purchases I've make over the last year - CDN banks, ACQ, etc.


----------



## ashin1

blin10 said:


> this thing is insane, i think they will raise divi in a month or two


i hope so too, if they don't i'll have to buy more so i can continue to DRIP


----------



## bouquets

Synergy said:


> Same goes for CNR when I purchased around $58 - "too expensive, wait for a pull back, etc.". I would have missed a great run. Similar to many other purchases I've make over the last year - CDN banks, ACQ, etc.


That happens all too often. Sometimes, however, you jump in at the end of a long run only to be stalled.


----------



## Synergy

Another all time high today, it just keeps chugging along.


----------



## LOST

*Am I early or Am I late Who knows The stock will let you know*

Another long time holder ( from $9 ) I will continue to hold but I will buy less as price gets too high. My neighbor just heard about stock and was telling me all about how good it was. He just bought in and thought it was a good deal. I didn't say anything. I just wanted to get some feed back. He was excited it so I thought that was a good thing. Same with PPL. I've held since the $13 level and I thought it was pricey then. Sometimes, I don't why, but you are just a little bit early to the story. I always thought IPL would be another ENB ( pricewise ) That was a long time ago. I held IPL when since the finance minister did his Halloween thing. Same with PPL. Myself, I think with this Stagflation playing out, these dividend payers are just being recognized. I am glad, I just had some patience with these stocks. I've jumped the gun and dumped some way too early ( sold Visa at $78 when it dipped and what is it now)


----------



## Y3LLoWF3LLoW

I bought in at 23.3 and added at 26~ so that I could DRIP. then it blew up to over 30 and I couldnt drip anymore. I bought on the slight dip yesterday at 36.69 so that I could drip again. but if it goes over 39 then I got to add more again!

I guess I cant complain.


----------



## Gumball

SALE SALE SALE! IPL stock is now on sale, cant beleive the drop this week but tempted to buy more..


----------



## Homerhomer

Gumball said:


> SALE SALE SALE! IPL stock is now on sale, cant beleive the drop this week but tempted to buy more..


It's been "crashed" to the levels we haven't seen in 5 weeks ;-)


----------



## My Own Advisor

I WISH I got in at $9 like LOST did...wow, nice move.


----------



## feetfats

Yeehaw!

IPL Just gave us a 14% dividend raise today
$0.1225 per month, up from $0.1075.
http://web.tmxmoney.com/article.php?newsid=71465466&qm_symbol=IPL


----------



## My Own Advisor

WOW. 

Nice raise!


----------



## blin10

niceeee


----------



## Jon_Snow

Yeeeehaaaaaa!!!!!


----------



## warp

Thanks for that info.
Though I would have seen it sooner or later, I did not see it today!

As we own lots of IPL, this is a great rise in our div income. which is why we buy stocks like Interpipe in the first place.


----------



## Canuck

Sweet! I bought at $14.66 and my YOC is exactly 10% now.

Surprised it didn't move on the news though.


----------



## My Own Advisor

These things are always priced in... Folks that have a few thousand shares of IPL are dancing today I bet. I wish I had more.....all in good time I guess.


----------



## warp

Canuck said:


> Sweet! I bought at $14.66 and my YOC is exactly 10% now.
> 
> Surprised it didn't move on the news though.


YOC, ( yield on cost), is kind of a nothing number. Our YOC in now over 16% on IPL, but I look more at the yield Today.

Like you though, I was slightly surprised that IPL didn't move more with this nice news. Still we are more than happy to collect these raised dividends.

Interpipe has a wonderfull record of rewarding shareholders. If we didnt already own so many shares I would be tempted to buy more at these prices.


----------



## LOST

*Thanks IPL for the raise and what a raise!*

Long term holder of IPL that hasn't been in touch for a while. I didn't know why comp wasn't working well. It seems I deleted anti-virus software. I had almost 300 malicious files when I did a scan today. Yikes! Anyhow, thanks for the raise: $600/month or $7,000/ year. Now if only PPL would recover to where it was earlier on this year.


----------



## My Own Advisor

You just got a $7,000/year raise???? :star:

I was happy when I could almost DRIP it again!!!


----------



## yyz

If that is true then LOST must be holding approximately 38800 shares or $1.35M


----------



## Synergy

yyz said:


> If that is true then LOST must be holding approximately 38800 shares or $1.35M


I think you have a few too many 0's. He claims $7000 / year NOT per month. Closer to 130K:biggrin:

edit: or maybe you are correct. I was assuming the $7000 / year included the "raise". I could be mistaken here. That would be a lot of coin in one stock!


----------



## feetfats

LOST said:


> Anyhow, thanks for the raise: $600/month or $7,000/ year. Now if only PPL would recover to where it was earlier on this year.


Yikes, that is a ton of IPL.
You should be able to vote yourself in as CEO by now 
Oh heck, why not vote me in, I need a job anyways.


----------



## Vicjai

LOST said:


> Long term holder of IPL that hasn't been in touch for a while. I didn't know why comp wasn't working well. It seems I deleted anti-virus software. I had almost 300 malicious files when I did a scan today. Yikes! Anyhow, thanks for the raise: $600/month or $7,000/ year. Now if only PPL would recover to where it was earlier on this year.


LOST, What else are you long term in?


----------



## protomok

IPL not doing so well this year, stock is down 18% YTD. Anyone know why the stock's been hit so bad this year? According to IPLs investor presentation only 10% of their EBITDA has commodity price exposure so they really shouldn't be affected too much by low oil prices. TTM revenue for example is flat as compared to 2014, and ttm net income is actually up.

Maybe folks are trimming their pipeline exposure in anticipation of rate hikes later this year? TRP and PPL are also down YTD.


----------



## AltaRed

My take is valuations got out of control, well outside their traditional bounds. Some of the excessive valuation was due to hyped growth projections that are most likely no longer to occur. Oil production has no way to rise materially in a likely low(ish) oil price environment potentially lasting years.

I have a few pipelines on 'watch' but prices have yet to approach reasonable lows.


----------



## CPA Candidate

Last year pipelines at any price because of safety and yield was a consensus trade, a crowded trade. What gets bid up for safety ends up being risky at some price. I have never owned any pipelines for this reason. I feel all the midstreamers could fall much further.


----------



## AltaRed

CPA Candidate said:


> I feel all the midstreamers could fall much further.


IPL is not really a midstreamer, but point taken. We are seeing a drop from ALA which is the only midstreamer I follow fairly closely... more so than PPL or KEY, etc. The multiples need to come down to reflect the realism that 'current' earnings are likely about as good as it gets... perhaps with low single digit growth.


----------



## protomok

Just curious what kind of valuation you guys think is more reasonable for IPL? Forward P/E seems quite reasonable at 21.2. Given that we're dealing with a pipeline company in a low rate environment IMHO any P/E < 30 seems pretty fair to me.


----------



## AltaRed

protomok said:


> Just curious what kind of valuation you guys think is more reasonable for IPL? Forward P/E seems quite reasonable at 21.2. Given that we're dealing with a pipeline company in a low rate environment IMHO any P/E < 30 seems pretty fair to me.


Without taking more time to analyze it, I wouldn't pay more than circa P/E of 18 for a pipeline that has few growth prospects.....at least in the near term. New oil sands projects are dead in the water. Current projects will be completed circa 2017 and any associated pipeline projects needed to handle that incremental production are already underway or baked into stock prices. At current oil prices, we are in for a long period of relative stagnation (at least relative to the near past) and assumed interest rate increases won't help. At current oil prices, I could see this stock settling in at circa $25 (or even less) by the end of 2015.

Said another way, why pay more P/E than you would for a telecom or a similar utility with lowish growth prospects? Check BCE, T, CU, RCI as examples.


----------



## Arizona

Just sold this one today. Might jump back in if stock drops to 24$


----------



## My Own Advisor

Why not DRIP (if you have enough shares) and collect dividends at the same time?


----------



## AltaRed

My Own Advisor said:


> Why not DRIP (if you have enough shares) and collect dividends at the same time?


DRIPing is not collecting dividends. It is the same as buying incremental volumes of stock with cash, i.e. investing. FWIW, I am not knocking DRIPs as a 're-investment' strategy. I am only taking exception to how people think of DRIPs.


----------



## My Own Advisor

No, fair point AR!

Sorry, I meant to imply DRIP (if you have enough shares to invest via reinvesting) or collect dividends - at the same time - meaning while IPL is on the way down. 

Owning more shares via reinvestment or using cash from dividends for strategic purchases (while the price is on the way down) is a good thing I think.

I guess folks would rather trade IPL more? Seems that way since I see the words sold and valuation above.


----------



## Arizona

Many ways to skin a cat. Good chance stocks going to keep dropping. I'd sugest to take some off the table and buy back later. Just my opinion.


----------



## doctrine

IPL trades at 4 times price to book. You won't find very many fundamental/value strategies that would go anywhere near that. In the last year, book value per share has actually decreased - if not for the $300M in common shares issued in 2014, book value would have dropped over the preceding 12 month period, reflecting that dividends are higher than net earnings. 

That being said, it's definitely better at $30 than $40, but still too expensive for me. $20 would probably be fair value but unlikely to hit unless there is a crash.


----------



## Jungle

Anyone looking at this lately? Yield is almost approaching 7%, sign of a risk or is this ok?


----------



## Islenska

Have been purchasing around $24, they raised their div recently.

Luckily owned this way back in RSP, but it has come down with the oil purge............

So better pricing now but don't listen to me I was pushing Baytex a year ago!


----------



## daddybigbucks

I keep coming back to IPL as well. They did just raise their dividend but the payout does seem high. A lot of insider buying. But the stock just keeps downticking.

It doesn't make sense at all to me, so I'm hold back buying until something big happens.


----------



## Jungle

I ended picking some up at $25, added some more at $23.XX Lots of support for the dividend from cash flow but stock is pricing in grim outlook from future oil sands volumes. 
However I would rather pipelines than other oil stocks right now.


----------



## godblsmnymkr

Bigger the top bigger the drop. this one got really over heated last year. dont have to catch the whole move, just part of it to be successful at investing. chart looks really bearish and the sector outlook is dubious. 
a lot to like in IPL though. serial dividend raiser and reported terrific Q3 but I'm waiting for the price to stabilize.


----------



## My Own Advisor

I keep DRIPping it.


----------



## ashin1

^
DRIPing this bad boy as well in the RRSP.
anytime i have excess cash build up from money left over previous dividends that didn't make it into the DRIP get used towards purchasing more IPL.


----------



## daddybigbucks

IPL dropped 20% in one month. Sitting around ~$20.4
7.6 dividend yield
That was my buy-in price.

When the oil markets recover, IPL should grab back that 20% fairly quickly. I hope.


----------



## Holland

Anyone buying IPL at these prices? Seems like a good yield still and yearly dividend growth will increase the yield


----------



## yyz

http://www.interpipeline.com/news/news-releases.cfm?newsReleaseAction=view&releaseId=305


----------



## My Own Advisor

Thanks for sharing. I like it. Keep growing IPL.


----------



## doctrine

I could be wrong, but this seems like an expensive acquisition. $1.35B for $40M of EBITDA in 2015? A lot of it is tied to commodity prices, it seems, potentially making their revenues less "toll" based. It appears they are hoping that this looks better if oil/NGL type prices rise substantially in the future. That may be fine, but it seems a bit of a departure or perhaps just a higher weighting in an area that is not their core oil pipeline business. IPL's stock currency is pretty high valued at 17 times FFO but I don't see the accretion at first glance unless energy prices double up. Happy to hear any other analysis.


----------



## Eder

I agree this looks better if gas prices rise a bit but the opportunity may not be there at that point. I don't think energy needs to double up to make this a good deal though.


----------



## gardner

I can't find a newer thread on IPL. If I have the wrong one, please link the right one.

I have been considering initiating a position in IPL to diversify alongside existing TRP and ENB holdings in my dividend portfolio. IPL is trading new a 52 week low and seems priced reasonably. In an environment where most everything is overpriced, what's wrong with IPL?


----------



## thepitchedlinkagain

I bought more today....


----------



## Pluto

I get conflicting reports on the payout ratio. Last year it was reported at about 75%. More recently it has been reported at 112%. Not sure how that happened. Hopfully, if the payout is that high, it will get rectified by increased earnings.


----------



## gardner

Pluto said:


> I get conflicting reports on the payout ratio.


They are reporting a payout ratio of 60.6%, but I am confused as to how the "Funds from operations" they use does not agree with their "Net income attributable to shareholders" number which is 107M smaller. There is no offsetting 107M figure that I can see.

http://www.interpipeline.com/files/.../2017/Q1 2017 MD&A & Financial Statements.pdf

In their 2016 annual report they say



> Payout ratio is calculated by expressing
> dividends declared to shareholders for the
> period as a percentage of funds from
> operations attributable to shareholders


By this calculation the ratio for Q1/2017 is 106.9%, not the 60.6% that they say. Strange.


----------



## Eder

I can't figure out a reasonable payout ratio either...didn't stop me from buying another 500 shares though.


----------



## Pluto

^ ^That's interesting. It used to be fun cracking an annual report, but these days it makes my head hurt, and I got lazy just using google and reading some articles. Maybe there is a foresnic accountant on the forum who can explain this. In the meantime I'm hoping IPL's claims are reliable.


----------



## doctrine

I like IPL and will probably add a few shares here if it stays under $25. Not only is IPL's payout ratio around 60%, it has an all-in payout ratio including growth capital of around 80-90%. It only needs a very small portion of its cash for maintenance.


----------



## gardner

Their payout ratio is calculated using "funds from operations" (FFO) which excludes amortization, depreciation and so forth. After looking at their 2016 annual report and Q1 2017 report, I think I agree that their payout ratio has been in the 60%-70% range for the last year anyway, and isn't 110%+ they way that their EPS figure makes it look. The thing that confused me was the "attributable to shareholders" part, and the only figure in the reports given as "attributable to shareholders" was the net income, which does include amortization, depreciation and so forth. I had to talk to them to figure out which was the figure they meant to use for payout ratio calculation.


----------



## Pluto

^ That's a relief. Thanks for talking to them to clarify this.


----------



## Islenska

Have owned IPL since way back and been buying bits over the years, actually getting too large a percentage of the portfolio but sure has a decent payout.

With the recent share price drop off, not a bad time to get some more,


----------



## londoncalling

This was one of my first purchases as a DIY investors. I am tempted to add more but it is already my second holding. Only have one pipeline. Would consider ENB below $50. Haven't made a purchase in a while. Getting difficult to fight the urge.... :eagerness:


----------



## Puppito

I added to my position last week and now see it's continued its steady decline, looking oversold right now. I'm interested to see Q2 results later today. Anyone have thoughts on what to expect?


----------



## Pluto

don't know what to expect except it is unlikly to be a nasty surprise. 

(BTW, insiders have been buying IPL from time to time this year. the most recent buy being June 15 @ 25.60 Insiders were also buying in Feb and March so they didn't see this pullback coming. No insider sells this year as far as I know).


----------



## Eder

I own way too much pipeline but IPL is looking seriously juicy. With the bad haircut guy going nuts there's no rush to make a move yet I think.


----------



## gardner

Down again today. It is looking really tempting, but I'm not sure I have enough free cash at the mo.


----------



## AltaRed

I continue to see a slow grind downwards for awhile yet as valuations for pipelines in general come down. There is nothing material on the horizon to suggest significant growth. IPL can tinker around the edges on NGLs, mid-stream, petro-chemicals and maybe some minor volume growth on a few of its pipelines, but there is nothing major on today's horizon that would be a step change in their business. We'd have to see at least 2 of KML, Keystone XL and/or Line 3 in construction and a $10-20 improvement in crude oil price to result in a step change in oil transportation demand from new projects. Canada simply isn't providing a sufficiently encouraging business environment for companies to invest in this country.


----------



## Puppito

Yesterday's results decent. The company has shown modest growth the past few quarters. I don't expect to see a significant turnaround with the price but I think the 20% price decline over the last 6 months has put the stock into oversold territory. I don't think I'm ready to pull the trigger on adding to this yet though.


----------



## Eder

Boink...500 more IPL...I am weak


----------



## Pluto

Higher than average volume sell off. last 4 days increasing volume, and prices heading down. I don't get this, since the other piplines not getting hit so bad. Plus IPL p/e is reportedly about 15 x next years earnings.


----------



## AltaRed

Pluto said:


> Higher than average volume sell off. last 4 days increasing volume, and prices heading down. I don't get this, since the other piplines not getting hit so bad. Plus IPL p/e is reportedly about 15 x next years earnings.


It is a regional pipeline pretty much restricted to Canada (UK terminalling notwithstanding). My guess is companies that rely on Canada for their wellbeing are not going to do as well as those with Int'l operations. See the last sentence of post #380


----------



## Eder

Actually its a bit more than a pipeline company. Here's their presentation for anyone interested...I like the polypropylene plant idea and hope they proceed...1/2 cost will be at tax payers expense if they do lol.

https://seekingalpha.com/article/40...2970:1cos0sm:9f28e3536a806942897b6b9ceced4476


----------



## AltaRed

Eder said:


> Actually its a bit more than a pipeline company. Here's their presentation for anyone interested...I like the polypropylene plant idea and hope they proceed...1/2 cost will be at tax payers expense if they do lol.
> 
> https://seekingalpha.com/article/40...2970:1cos0sm:9f28e3536a806942897b6b9ceced4476


If the petrochemical business makes any money. I already mentioned petrochemicals in a prior post.

Added: IPL is well situated to increase throughput at minimal cost to bring their systems up to full capacity so those incremental projects should have healthy economics. The real issue I think is there is no step change development that will materially change financials. The $3B petrochemcial venture will not be overly accretive since it is virtually impossible for Canadian petrochemical plants to match the economics of the giant beasts along the Eastern seaboard and the Gulf Coast. Even then, when I worked for a multi-national, margins were mere cents and ROCE was typically single digit. A big thanks to the Alberta taxpayer potentially stepping up to the plate to buy some value added jobs in the sector.


----------



## james4beach

Various pipeline stocks all getting hit very hard in the last week. 5 day change in stock price:

ENB -4.61%
IPL -6.75%
TRP -2.84%

This is quite a bit worse than the energy index XEG -0.36% in the same period


----------



## doctrine

IPL revealed quite nice results:

http://www.interpipeline.com/news/news-releases.cfm?newsReleaseAction=view&releaseId=340

Growth in FFO was 16% per share. Their payout ratio is the lowest it has been in a long time at 56%, and 90% all-in including significant growth capital. They increased the dividend, but only 3.7%. I believe this is because they are going to announce the construction of a major NGL facility at a price tag of $3B, but backed by take or pay agreements. IPL has really been outperforming all pipelines in the last 2-3 months or so.


----------



## Eder

It's a go....Inter Pipeline to Build Canada’s First Integrated Propane Dehydrogenation and Polypropylene Complex

http://www.interpipeline.com/news/news-releases.cfm?newsReleaseAction=view&releaseId=343

They have stated they don't expect to issue new shares to fund construction so looks pretty good.


----------



## AltaRed

WADR, and not to pick on Eder, but I hate it when folks use G&M links.... all behind the paywall. I have to then seek out the company's website.


----------



## Eder

Understood...I'll clean it up


----------



## My Own Advisor

"Upon completion, the project is estimated to generate approximately $450 million to $500 million of long-term annual average EBITDA and be accretive to future funds from operations per share"

Meaning, future, long-term cash cow.


----------



## doctrine

Eder said:


> It's a go....Inter Pipeline to Build Canada’s First Integrated Propane Dehydrogenation and Polypropylene Complex
> 
> http://www.interpipeline.com/news/news-releases.cfm?newsReleaseAction=view&releaseId=343
> 
> They have stated they don't expect to issue new shares to fund construction so looks pretty good.


They estimate 450-500M of EBITDA. By comparison, the entire business in 2017 will make about $1.1-1.2M EBITDA. My rough calculations confirm this is definitely accretive (probably 20-25%) and can be done very profitably well below their cost of capital. Add this to organic growth of the business, and IPL looks like a pretty good growth story for the next 5 years. It's nice they don't have to issue shares, although I wouldn't be surprised to see another ~$500M issue come out sometime in the next year, to pursue other growth within their business lines.


----------



## Eder

They are looking at 75% take or pay contracts as well so propane futures won't affect the cash flow. I think there's lots of time to buy though as its over 2 years before production starts...might be a lot of selling as the construction may threaten the lofty payout. I do wish I had bought more when we were at $24 though.


----------



## AltaRed

You have to wonder just how much surplus propane there really is and what pricing will eventually be. AltaGas appears to be proceeding with their Ridley Island propane export terminal. 
https://www.altagas.ca/infrastructure/projects/ridley-island-propane-export-terminal#updates
https://gasliquids.com/portfolio-item/altagas-ridley-island-lpg-export-terminal/

And isn't PPL doing something along this line too with their foreign partners? http://www.pembina.com/media-centre/news-releases/news-details/?nid=135383

Something tells me propane feedstock prices are going to increase significantly.


----------



## Eder

If propane goes up IPL may benefit http://www.interpipeline.com/news/news-releases.cfm?newsReleaseAction=view&releaseId=305 Inter Pipeline Announces $1.35 Billion Acquisition of Canadian NGL Midstream Business.

http://www.interpipeline.com/files/pdf/fact-sheets/Fact Sheet - NGL Processing.pdf

They produce about 35k bpd equivalent of propane plus right now , their poly project requires 22k bpd to start. Not sure how much propane they can get out of propane plus . Right now they ship a lot of it to the US for processing.

I think investing now is like investing in a new mine...lots of things can happen. Propane prices have already doubled from last year, and helped to boost IPL last quarter. At any rate this is a different company than it was last week.

(I own a **** ton of this so I am clearly biased)


----------



## AltaRed

I am not close enough to understand the proportionate off gas streams that come from oil sands upgraders but there likely wouldn't be much propane. Regardless, the NGL business is good when the spreads are wide and is a bit of a natural hedge against propane prices hurting petrochemical margins AND maybe more importantly, IPL's bankers probably have gone rigorously through their due diligence.


----------



## Eder

I think their oilsand offgas plants produce mostly ethane. The propane is coming from their straddle plants processing nat gas from other sources.


----------



## AltaRed

Eder said:


> I think their oilsand offgas plants produce mostly ethane. The propane is coming from their straddle plants processing nat gas from other sources.


I would have thought the inverse...bwtfdik. I think the main point is that there are multiple projects looking to tap into cheap, trapped light NGLs.


----------



## peterk

In for another 100 shares!


----------



## My Own Advisor

I would be more than happy to buy more and own this thing for another few decades. As long as they continue to increase their dividend, I like what I see....


----------



## Dilbert

I picked up 190 today, it’s on sale!:chuncky:


----------



## john.cray

Dilbert said:


> I picked up 190 today, it’s on sale!:chuncky:


Why do you think it is on sale last couple of days?

I was about to initiate a position on ENB as part of my 5-pack, now I am tempted to split it into ENB+IPL.

Note: I am building a dividend-growers Canadian stocks portfolio, so not really a 5-pack, it could be an N-pack as long as I keep the sectors balanced.


----------



## AltaRed

Dilbert said:


> I picked up 190 today, it’s on sale!:chuncky:


Even I might bite if this falls back another $2 or so. I've got it on my Watchlist now.

To John: The market doesn't like this new multi-billion commitment. Fraught with some uncertainty notwithstanding the nature of the COS/take-or-pay contracts. I am assuming a portion of those contracts are from shaky producers in cash flow crisis...which become useless if the producer goes into receivership. Hard to know because IPL has usually been pretty conservative in its investment strategy....and yet, they would have noticed how shareholders have bid up PPL despite PPL running up debt and making risky bets as well. There does not appear, to me anyway, much rational explanation about market response.


----------



## Dilbert

john.cray said:


> Why do you think it is on sale last couple of days?
> 
> I was about to initiate a position on ENB as part of my 5-pack, now I am tempted to split it into ENB+IPL.
> 
> Note: I am building a dividend-growers Canadian stocks portfolio, so not really a 5-pack, it could be an N-pack as long as I keep the sectors balanced.


I’ll defer to AR as far as an explanation goes. I just think it’s is a solid longterm buy and hold with a great divvy. ENB and ENF would be good too, IMHO.


----------



## doctrine

Reasons for decrease:

-investor uncertainty over the project (perhaps unfounded, but this is a big project - add in some execution risk)
-capital raises to come - although they *can* do it without equity, that means basiclly zero growth capital anywhere in their system
-a final tax loss selling, lots of people sitting on 20-30% losses

Given that all of the good news is out for the year, not surprised to see this. Expect management to get the story out early in the new year as I think there is plenty of good news to sell here.


----------



## AltaRed

The investor presentation http://www.interpipeline.com/files/...tions/IPL Heartland Petrochemical Complex.pdf is worth going through in some detail for those seriously considering a new investment in IPL. They will have to borrow (debt) and they may need some equity issuance (thought not material....they say.... for now). Slide 8 is informative as well to assess economic risk (exposure).


----------



## OptsyEagle

It said it was accretive to "future" cash flow. Wonder what it will do to CF over the next 4 years. Also, you can probably cut that free cash flow number they predict in half, if this project goes the way most large, long term projects tend to go. They may get to those numbers someday but it won't be in 2022. They will probably never actually get there and they may get close in perhaps 2024/2025. 

All this just my prediction. Since it will be wrong, just use it to know that this type of project has many inherent risks. Few companies ever pull them off as predicted.


----------



## AltaRed

Cash flow will almost certainly be entirely eaten up by project capex and dividend payments, and don't expect dividend increases until after the project is up and running. I agree it will be 2024 or beyond before we know how accretive, if any, this thing will be. Many shareholders are likely to put new money elsewhere until this project nears completion. Likely just clipping coupons until then. That said, a 6+% yield is not a bad thing.


----------



## Eder

This company is changing from a income stock into a growth stock...too much risk for a lot of conservative portfolios. I doubt we'll see any dividend growth in the near future and that makes it a sell for many.


----------



## londoncalling

I doubt we will see the dividend increases that have happen over the past number of years. However, I think the company will raise annually just to keep the streak going. There is a lot of hype(a fair portion justified if the increases are sustainable and of some significance) around the Dividende Kings/Aristocrats mantra. I think the company has been well run and should continue to be so. With prices on oil low now is the time to explore affordable capex. So many companies start projects when commodity prices are at peak. By the time they are completed the cycle is headed back down. It is hard to have the free cash flow when the commodity prices are lower but for those that can it is great business sense to expand either through acquisition or new projects.

Cheers


----------



## Dilbert

IPL. Long term play? Any thoughts, folks?
I think so and a good time to pick more up.


----------



## AltaRed

Perhaps. I've had IPL on my Watch list for awhile but I won't consider biting until I know that their petro-chemical project is on track, i.e. on budget and schedule, and propane prices have not risen to the point of squeezing margins. A few curve balls and it will hurt this company in my opinion. Too many moving parts for me yet. I prefer not to gamble at 70 years of age.

P.S. I should qualify my thoughts to say that since I am in withdrawal, IPL has to be better than something else in my portfolio to do a 'swap'. That is the first and foremost important criteria.


----------



## Dilbert

Thanks for your insight, AR. When I do a comparison of where it has gone over the past five years against others I watch, it is very compelling to buy at this point, if I only look at the price.

I’m 61 and looking for some growth still before I ultimately consolidate, simplify and lower risk.


----------



## AltaRed

Dilbert said:


> Thanks for your insight, AR. When I do a comparison of where it gone over the past five years against others I watch, it is very compelling to buy at this point, if I only look at the price.


Look at earnings/share growth and where that might go in the next 5 years. Per Morningstar, EPS was negative in 2013 but that was obviously an anomaly. EPS was $1.02 in 2014 rising steadily to $1.41 in 2017 with a current TTM of $1.54 for the last 4 quarters. Those are encouraging numbers (up 50% in 5 years) so the stall in price is likely due to the fact: 1) current P/E of ~14 has been 'rightfully' contracting to come back in line with the likes of TRP*, 2) current P/B of ~2.3 has been 'rightfully' contracting for similar reasons, 3) certainty of the petro-chemical project, 4) uncertainty in growth which is really dependent on additional takeaway capacity from TMEP, Keystone XL and/or Line 3 replacement.

*I use TRP because ENB's metrics are still f*cked up and likely need another year to sort out. PPL is not comparable because its EPS has grown 240% in the past 5 years and warrants higher multiples if it continues at least part of that momentum.

My current view is IPL is priced where it should be currently and there is promise of continued EPS growth with the petro-chemical project and more transportation capacity if Canada can ever get another 1-2 pipeline projects built. With its current dividend yield, one is getting paid to wait but I am not keen on buying high dividend yields. Think I'd seriously bite though if it got circa $20.

Added: Upon reflection, you've given me pause to consider looking harder at this to replace my PWF which has done f*ck all for quite some time. Do I gamble on the variables of the petro-chemical project?


----------



## doctrine

IPL looks better than it ever has. The payout ratio has been decreasing from the 80%+ range 5 years ago down to 55%. This very low payout ratio is significantly reducing new capital requirements for the petrochemical facility, which will result in 40% growth in EBITDA when it starts in 3 years. So far the facility is on time and budget and they also offloaded $800M in utility/infrastructure costs and actually got $56M back in cash. In the next 18 months, investors will start pricing in the facility's EBITDA and the stock could start rising significantly as will dividends at that time. On a 5 year basis, IPL looks great.


----------



## john.cray

Somewhat related -- I am curious if any of you do / will hold IPL in a taxable account. If so then you might be interested in taking a look at this thread that I started regarding IPL's "Premium Dividend": https://www.canadianmoneyforum.com/showthread.php/136150-Premium-Dividend-by-Inter-Pipeline-(IPL-TO)

From a taxation point I am still wondering what kind of spaghetti my accountant and I will be in, in a few months.
Just something you might want to consider regarding this security.

JC


----------



## OptsyEagle

I assume the premium dividend has something to do with their dividend reinvestment plan. I also assume that if one does not reinvest dividends automatically under this plan, it is of no concern to the shareholder, whether the stock is held in a registered or non registered account.

Let me know if my assumptions are correct.


----------



## john.cray

OptsyEagle said:


> I assume the premium dividend has something to do with their dividend reinvestment plan. I also assume that if one does not reinvest dividends automatically under this plan, it is of no concern to the shareholder, whether the stock is held in a registered or non registered account.
> 
> Let me know if my assumptions are correct.


Unfortunately that does not seem to be the case. The DRIP is separate as you can see in the links provided in the other thread. The Premium Dividend shows up as a separate payment, along the regular one, equal to 1% of the main dividend. I am with Scotia iTrade and did *not* opt-in to participate in this at all. It must be enabled by default for iTrade stockholders, since I started receiving it along with the first payment.

Take a look at http://www.interpipeline.com/investor/sharepricedividends/shdrip/drip-qa.cfm and in particular:



> If you are an eligible Shareholder and are enrolled in the Premium Dividend™ Component, then your Dividends will be reinvested in new Shares under the Plan at a 3% discount to the Average Market Price, and such Shares will, without further action required from you, be disposed of through the Plan Broker in exchange for the Premium Dividend™, being a cash payment equal to 101% of the reinvested amount. The Plan Agent will in turn remit payment of the Premium Dividend™ to participants in the Premium Dividend™ Component in the same manner that regular Dividends are paid by Inter Pipeline.


And furthermore the tax implications:



> Participation in the Premium Dividend™ Component involves three transactions:
> 
> (i) first, you will receive a Dividend from Inter Pipeline;
> (ii) second, you will use the cash from the Dividend to purchase new Shares at a 3% discount to the Average Market Price; and
> (iii) third, you will sell the new Shares purchased in exchange for the Premium Dividend™, being for a cash amount equal to 101% of the reinvested Dividend.
> The first transaction under each component will result in the receipt of a taxable dividend on your existing Shares equal to the amount of the Dividend, and the new Shares purchased under the second transaction will have an initial cost for tax purposes equal to the amount of the Dividend used to purchase such Shares.
> 
> Generally, Investors can hold any new shares as inventory or as capital property for tax purposes. Assuming that you hold your Shares (including the new Shares purchased under the Plan with the cash from the Dividend) as capital property, you should generally realize a capital gain or loss on the sale of the new Shares under the third transaction under the Premium Dividend™ Component equal to the amount by which the proceeds of disposition are greater (or less) than your average adjusted cost base of the Shares sold. In this case, the average adjusted cost base of the Shares sold at any time that are held as capital property will be the average cost of all Shares owned by you at that time, including those purchased with the cash from Dividends under the Plan. Conversely, where you acquire and hold any such new Shares as inventory, you will generally be required to include in income the profit or net gain arising from the acquisition and disposition of such Shares under the third transaction under the Premium Dividend™ Component, such that you will generally be required to include in income the amount by which the Premium Dividend™ exceeds the reinvested Dividends.


----------



## AltaRed

doctrine said:


> IPL looks better than it ever has. The payout ratio has been decreasing from the 80%+ range 5 years ago down to 55%. This very low payout ratio is significantly reducing new capital requirements for the petrochemical facility, which will result in 40% growth in EBITDA when it starts in 3 years. So far the facility is on time and budget and they also offloaded $800M in utility/infrastructure costs and actually got $56M back in cash. In the next 18 months, investors will start pricing in the facility's EBITDA and the stock could start rising significantly as will dividends at that time. On a 5 year basis, IPL looks great.


Good information but 2 questions. Why do you consider 55% payout ratio 'very low'? I'd call it 'middle of the pack' meaning appropriate. Does the 40% growth in EBITDA translate into earnings per share, i.e. 40% is meaningless if there will be a significant equity issue to supplement development costs.


----------



## doctrine

40% EBITDA growth is not per share, no; given the dividend reinvestment, I would expect that to drop to 25-30% per share after a couple years of premium DRIP that is scheduled to end next year. A rough estimate would see the payout ratio is trending to the 40-45% range for 2022 minus any big dividend increases, which leaves plenty of room to return money to shareholders in the 5 year plan.

I consider 55% to be low given where it has trended over the last 5 years, and given that the vast majority of the 55% is growth capital and not sustaining capital. It is also lower than other pipelines like ENB which is still above 60%. Keyera, a NGL processor, is at 60% as well. PPL is comparable at 55% but trades at a premium. TRP has the lowest at close to 40% but also comes with a big premium (I own IPL, TRP and ENB). ALA, unfortunately, had a nice 60-70% payout but that spiked above 100% after paying too much for the WGL acquisition and will probably see a 60-70% dividend cut in a few weeks. Let's hope IPL avoids that path and keeps sticking with what it knows.


----------



## AltaRed

doctrine said:


> 40% EBITDA growth is not per share, no; given the dividend reinvestment, I would expect that to drop to 25-30% per share after a couple years of premium DRIP that is scheduled to end next year. A rough estimate would see the payout ratio is trending to the 40-45% range for 2022 minus any big dividend increases, which leaves plenty of room to return money to shareholders in the 5 year plan.


That is closer to what I would have thought without doing the analysis. Any metric that is not based on a 'per share' basis doesn't mean much overall. I wish all publicly traded companies were 'forced' to report growth prospects on a per share basis.


----------



## doctrine

Per share growth is critical. For the record, IPL's shares outstanding has grown about 3.5% year over year as of Q3, which is mostly through the premium DRIP. In the 12 months prior, shares outstanding increased by 11% but this was almost all for two acquisitions - Williams NGL and CNQ's interest in the cold lake pipeline, both of which came with new revenues (FFO was up +21% in that period - very accretive). Outside of that, there was about 2.5% share growth from the DRIP. Overall, IPL has been reasonable with share growth, which is why the payout ratio has been declining.


----------



## OptsyEagle

I would say the 55% payout ratio is interesting when looked at with respect to the amount of dividend being yielded. IPL yields over 7.8%. Simple math tells me that if 7.8% is paid from only 55% of the free cash flow then one can see that the company itself actually generates a yield, or rate of return, of over 14%.

Obviously IPL is taking that return and paying some out and reinvesting the remainder in growth projects.

That is my simplistic way of looking at payout ratios. They need to be analysed with respect to the dividend yield amount to derive what they are saying. Of course they also measure the sustainability of that dividend, which is what most people use them for.


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## OptsyEagle

john.cray said:


> Somewhat related -- I am curious if any of you do / will hold IPL in a taxable account. If so then you might be interested in taking a look at this thread that I started regarding IPL's "Premium Dividend": https://www.canadianmoneyforum.com/showthread.php/136150-Premium-Dividend-by-Inter-Pipeline-(IPL-TO)
> 
> From a taxation point I am still wondering what kind of spaghetti my accountant and I will be in, in a few months.
> Just something you might want to consider regarding this security.
> 
> JC


Makes me kind of glad I hold mine in my TFSA. That was just luck not because of this program.

Restating it in English I think what they are saying is that everyone gets at least 101% of the dividend. Not sure why. Probably to even things out a little with the ones who DRIP and get a 3% discount on the purchase of those shares. I have noticed this little extra but never really gave it much consideration.

Anyway, if they just paid everyone 101% of the dividend then all that money would come out of cash flow. For some reason they prefer to have the extra 1% come out of stock issue, as would the 3% discount for those who DRIP.

So what I think they are saying (just not in good English) is that you will be taxed on:

101% Dividend = Eligible Canadian Dividend
1% will be a capital transaction of buying stock and then selling it. This will create a disposition transaction but should not generate any taxation since the stock is being bought and sold at the exact same price.

So, for example, if you bought shares of ABC corp at $10 and sold them at $10, you would not have to pay any capital gains taxes but CRA would like you to itemize it as a disposition of capital property, most likely on Schedule 3.

What would I do. Not a darn thing. If somehow your broker magically accounts for this on a T5008 then great. If not I would completely ignore it. Even if CRA came back later to ask about it, you will not owe them any taxes, so let them figure it out or attempt to deal with it then. That would be my way of dealing with it.

By the way, I have seen this extra 1% on other stocks that I have owned in my taxable accounts and never really understood what it was. Since it was more then I expected, as opposed to less, I didn't worry much about it and it was a very small amount. Now I know what that is so thanks for that. Obviously I ignored it and have not been taken off to jail yet. I think I will be OK, so if I were you I would not give it another moments thought. I will let you know if the RCMP knock at my door. lol.


----------



## Eclectic12

john.cray said:


> Unfortunately that does not seem to be the case. The DRIP is separate as you can see in the links provided in the other thread. The Premium Dividend shows up as a separate payment, along the regular one, equal to 1% of the main dividend. I am with Scotia iTrade and did *not* opt-in to participate in this at all. It must be enabled by default for iTrade stockholders, since I started receiving it along with the first payment ...


Interesting as the Q&A link seemed to have a part that said the premium dividend (tm) part only applied to those who were in the DRIP program. Some other brokers allow one to set the DRIP at the account level ... any chance the taxable account was set this way?

I'd have to go back to check the details but what I recall reading was no DRIP = only the regular dividend paid with no premium dividend. Being in the DRIP made the premium dividend an option.


Maybe someone who does not have the DRIP turned on in a taxable account can confirm what they are receiving?
Cheers


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## Eclectic12

OptsyEagle said:


> ... Restating it in English I think what they are saying is that everyone gets at least 101% of the dividend ...


The "What does the plan offer" question says it is a DRIP and DRIP Super (aka premium dividend) so I suspect that anyone receiving cash dividends with no DRIP involvement will only receive the regular dividends.

I don't own it so I can't confirm.


Cheers


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## OptsyEagle

I own it in a TFSA and I am receiving 101% of the declared dividend.

As I said, I have seen this with other stocks as well and never really understood it. Some brokers just pay the 101% dividend in one entry (TDDI) and others separate the two (Sc. itrade). When separated, it is difficult not to notice it, but as I said, I had no idea what it was until today.

I think the wording that IPL uses is wrong since I also thought they were saying it only pertained to investors opting into the DRIP, but it seems to pertain to all investors.


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## Gumball

Just increased my position, the value was too tempting to pass up...


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## agent99

I have some in TFSA and some in unregistered account. No dripping. Never did know why I received that 1% in interest as a separate payment. Can't recall, but I am sure the T-slips we get have the difference figured out.


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## john.cray

agent99 said:


> I have some in TFSA and some in unregistered account. No dripping. Never did know why I received that 1% in interest as a separate payment. Can't recall, but I am sure the T-slips we get have the difference figured out.


I guess, I'll find out in a few months myself when iTrade sends me the forms, but I am really curious to know what forms you have been given and what your brokerage is. I like the security itself but due to its 12 payments a year and this potential tax complication I am considering shifting into an alternative.

I'd appreciate if you share this information with us if it's not too much trouble.

Regards,
JC


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## AltaRed

As I understand it, the 1% 'interest' payment will likely show as Box 14 (Other Income) on a T5. It shows that way on the 1% interest I receive on another security I have in BMO IL.


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## john.cray

AltaRed said:


> As I understand it, the 1% 'interest' payment will likely show as Box 14 (Other Income) on a T5. It shows that way on the 1% interest I receive on another security I have in BMO IL.


If that's the case then it would be really easy.

My concerns was that according to my understanding of their FAQs it sounds like every time there's a Premium Dividend paid, behind the scenes each investor effectively buys and then sells additional shares of IPL. If that's the case then with that purchase there's a new ACB for *all* my shares, that equals my own/previous ACB + the new shares. Thus the average ACB changes and then with the immediate sell a capital gain/loss even occurs. If that's what I am supposed to do for every dividend payment I am out of this security.

I was thinking of adding to this position but now standing by until I get to the bottom of this tax question.

Thanks for the additional information.
JC


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## AltaRed

I was responding to the 1% interest payment accompanying the dividend payment. I know nothing about an IPL Premium Dividend if those are "one off" specials


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## agent99

AltaRed said:


> I was responding to the 1% interest payment accompanying the dividend payment. I know nothing about an IPL Premium Dividend if those are "one off" specials


I just had a quick read of the IPL site. I guess I chose the cash option rather than the drip option. For that, I get a 1% premium. BMOIL show the 1% as Other Income on my T-slip. So dividends would be taxed as such and the extra 1% as interest or other income. So no problem there. And that is why I chose the cash option. It does seem more complex than that, because it seems you still get shares but they are immediately sold and then you receive the cash value. But it seems that the buy/sell does not have to go into acb. But maybe I am wrong?

Dripping allows you buy shares at a discount. Then you simply add the new shares received to acb at whatever discount price you paid for them each month.


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## john.cray

AltaRed said:


> I was responding to the 1% interest payment accompanying the dividend payment. I know nothing about an IPL Premium Dividend if those are "one off" specials


I believe we are talking about the same thing. In the case of IPL terminology Premium Dividends are not one off payments. They are received alongside every regular dividend payment if you do not participate in the DRIP. I have received 10 of those so far.


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## john.cray

agent99 said:


> I just had a quick read of the IPL site. I guess I chose the cash option rather than the drip option. For that, I get a 1% premium. BMOIL show the 1% as Other Income on my T-slip. So dividends would be taxed as such and the extra 1% as interest or other income. So no problem there. And that is why I chose the cash option. It does seem more complex than that, because it seems you still get shares but they are immediately sold and then you receive the cash value. But it seems that the buy/sell does not have to go into acb. But maybe I am wrong?
> 
> Dripping allows you buy shares at a discount. Then you simply add the new shares received to acb at whatever discount price you paid for them each month.


Thanks for confirming that!

Now it begs the question: if you get a T5 reporting this extra 1% as other income and you include it in your taxes as such without digging any deeper are you all cleared from any responsibility of messing up? I would assume so. I mean it was reported to you as such in an official T5 after all, no?

Cheers,
JC


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## agent99

john.cray said:


> Thanks for confirming that!
> 
> Now it begs the question: if you get a T5 reporting this extra 1% as other income and you include it in your taxes as such without digging any deeper are you all cleared from any responsibility of messing up? I would assume so. I mean it was reported to you as such in an official T5 after all, no?
> 
> Cheers,
> JC


That's the way I see it. I mean, it wasn't us that did the buy-sell - it was them. Not much money involved anyway.


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## AltaRed

I agree. There is nothing amiss in just reporting what is on the T5. After all, a copy was sent to CRA anyway.


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## john.cray

Cool. I hope iTrade reports it the same way as BMO - other income.

Cheers folks,
JC


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## Dilbert

Gumball said:


> Just increased my position, the value was too tempting to pass up...


Me too, it was impossible to resist!


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## john.cray

Anyone buying IPL today during the selloff? Almost down to the 52 weeks low.


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## My Own Advisor

Reinvesting all dividends paid, that's about it right now. Doing that, earning a handful of new shares every month. Yield is getting wild on this one.


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## OptsyEagle

You wouldn't think pipelines were in short supply in Canada when you look at the prices that investors are selling them at.

Anyway, the way I look at these bargains is this way. I may be right about IPL trading at a price below what it is worth or I may be wrong. But if I buy many stocks, just like IPL, I will most likely be right on average. Being right is being right. So don't back up the boat but a nibble or two cannot hurt.

A 55% payout ratio on an 8% dividend is a return on investment of 14.5%. Some of it will be paid to you as a dividend and some reinvested into growth projects in order to raise that dividend over time. If this was a REIT or just about any other type of company, what would investors think about a 14.5% cap rate. It certainly discounts a heck of a lot of risk, if you put it into a diversified portfolio. I think REIT investors would kill to get a 14.5% cap rate and in the case of a REIT, I think it would be easier to find a place to build a 10 story building on the corner of Yonge and Bloor (Toronto) then it would be to build a pipeline in Canada.

I think Warren Buffet calls that a "moat".


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## AltaRed

May have already been provided in this thread, but just in case the most recent investor presentation http://www.interpipeline.com/files/...ns/Corporate Presentation - December 2018.pdf

On Page 42, dividend payout ratio currently ~63% and could be ~80% for full year 2018, but fully covered by cost of service, etc contracts. 

The biggest vulnerabilities (beyond the petro-chemical complex cost/schedule overruns) would be:

1) decreasing volumes in both their oil sands and conventional oil pipeline systems. An investment in IPL is a bet on AB crude production being increased over time, or at the very least sustained. Good reasons to believe growth is possible but IS highly dependent on increased takeaway capacity. If there is growth, their pipeline systems can be easily upgraded in capacity at low cost for increased EBITDA.

2) decreasing NGL spreads. Slides 19 and 20 show how NGL has been a boon in recent years and were a significant part of Q3 financials*, i.e. $135M out of $300M. Those spreads will decline substantially on either, or both of, crude price declines and natural gas price increases. No one has been talking about that.

*from Q3


> NGL processing generated record funds from operations of $134.8 million, a $56.7 million increase over the third quarter of 2017. This result was driven by increased frac-spread pricing and strong production volumes in both our natural gas and offgas processing operations. Average propane-plus realized frac-spread pricing at the Cochrane straddle plant was $0.98 USD per US gallon, a 36 percent increase over the third quarter of 2017. Offgas olefinic and paraffinic frac-spreads, after benchmark adjustments, also strengthened during the quarter averaging $1.43 USD per USG and $0.43 USD per US gallon, respectively. Natural gas flows to the Cochrane and Empress straddle plants during the quarter increased 20 percent compared to the third quarter a year ago. In aggregate, 3.1 billion cubic feet per day of natural gas was processed, extracting 97,700 b/d of ethane and propane-plus. Average sales volumes from the Redwater Olefinic Fractionator remained consistent with the same period a year ago averaging 32,300 b/d during the quarter.


These 'big questions' may be the primary cause of current pressure in IPL's stock, but the biggest one in my opinion, now having looked more closely at their numbers is the NGL frac spreads. These WILL go down, but it is anyone's guess whether they will retreat by ~50% or more over time or not.

Still, as has been pointed out, the numbers could still be compelling even with a substantial haircut in NGL frac spreads. I'd still do more modeling on the NGL question (perhaps historical comparisons) before committing personally.


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## OptsyEagle

I was using the most recent quarter, Q3 for payout ratio but will admit a full year would be a better look.

https://mma.prnewswire.com/media/78..._Announces_Record_Quarterly_Fi.pdf?p=original

Won't comment on frac spreads. Above my pay grade.


----------



## AltaRed

OptsyEagle said:


> Won't comment on frac spreads. Above my pay grade.


Think it is beyond anyone's ability to forecast with any certainty, but if/when our natural gas prices 'take off', and they could with some certainty at least when the West Coast LNG project gets operational, that is one whammy. Hard to know what NG will do on its own without LNG exports but there seems to be no lack of NG supply stateside. Of course, there will be more NG demand for electrical generation when all those coal plants retire as well.

I think the main 'thought' is NGL frac spreads could well be at, or almost close to, their maximum and I wouldn't count on $135M per quarter in FFO in NGL processing as a 'norm' for the long term That said, IPL stock is pretty beat up and there is likely a margin of safety in owning it at these levels. I am close to seriously swapping out another stock for IPL in the $20 range.


----------



## john.cray

Added to position at $20.50


----------



## Dilbert

Snagged some IPL stock at $20.35. I just couldn’t resist!


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## AltaRed

I capitulated as well and bought* IPL @ $20.30. Close enough to $20 to just do it and get focused on Xmas. There is commodity spread risk on this one as I mentioned above but it IS beaten up pretty good with some margin of safety.

* Sold my ITP holding for the funds to buy this one.


----------



## Ag Driver

Deleted


----------



## AMABILE

added IPL to my existing position @ $19.28


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## john.cray

The drop on this one continues with yield close to 9%.


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## AltaRed

I bought more yesterday well under $20 to fill out my position on the premise it is now undersold, dividend is safe, and the balance sheet is decent (all clues I've taken from their Q3 results and their last investor presentation). http://www.interpipeline.com/files/...ns/Corporate Presentation - December 2018.pdf 

If people continue to be fearful of markets for the next several months, it could drop another $1+, because there is nothing in 2019 that says IPL can grow its income and cash flow, at least not until year end 2019 when they might get more oil volumes through their system with Line 3 replacement and Notley's trains. Until then, there is more downside risk (than upside) in income/cash flow for 2 reasons: 1) curtailments by Notley to reduce crude oil throughputs, and 2) NGL processing income would seem to have nowhere but to go down (3Q was an exceptionally high number). Investors are more likely to buy higher prospects for growth in cash flow (ENB, PPL, TRP) in these 'troubled' times.

Added: Another good fact sheet http://www.interpipeline.com/files/pdf/fact-sheets/Fact Sheet - Q3 2018.pdf Note the reliance on commodity based EBITDA by contract type? Mostly frac spread on NGL processing. Also note NGL on next chart on EBITDA by Business Segment.


----------



## john.cray

AltaRed said:


> I bought more yesterday well under $20 to fill out my position on the premise it is now undersold, dividend is safe, and the balance sheet is decent (all clues I've taken from their Q3 results and their last investor presentation). http://www.interpipeline.com/files/...ns/Corporate Presentation - December 2018.pdf
> 
> If people continue to be fearful of markets for the next several months, it could drop another $1+, because there is nothing in 2019 that says IPL can grow its income and cash flow, at least not until year end 2019 when they might get more oil volumes through their system with Line 3 replacement and Notley's trains. Until then, there is more downside risk (than upside) in income/cash flow for 2 reasons: 1) curtailments by Notley to reduce crude oil throughputs, and 2) NGL processing income would seem to have nowhere but to go down (3Q was an exceptionally high number). Investors are more likely to buy higher prospects for growth in cash flow (ENB, PPL, TRP) in these 'troubled' times.


So buy when others are fearful ?

I wanted to know your opinion on this observation of mine: it seems to me that the drop in IPL and other pipelines lately is mainly due to the drop in oil prices (WTI not just Canadian), but at the same time I wonder why a company like IPL which only transports the commodity would be affected by the price of it? Don't they get paid the same regardless of the price, and don't we face shortage of pipeline capacity?


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## AltaRed

People should buy on confidence of stable or increasing EBITDA. That is threatened when oil prices are so low that production increases may vanish into thin air.
- TRP has faltered due to failed pipeline expansions that investors were expecting and thus valuation multiples compressed. 
- ENB faltered partly due to lack of Line 3 coming on as soon as expected and its huge debt problem (on its way to resolution) so valuation multiples compressed. 
- I have not followed PPL well but it's EBITDA growth and projects underway and on the horizon has keep its P/E multiple a bit higher. It has more near term EBITDA growth across more businesses than IPL.

IPL has a LOT more commodity based EBITDA as a percentage of their income/cash flow as I said in my previous post that has significant variability in results. 2019 could be a troubling year. EBITDA could be down 10% or more in 2019 given certain conditions. NGL processing income is also a significant part of the expected funding of their petro-chemical project. If that falters enough, they will have to incur more debt, or float an equity issue, or cut dividend.

I bought IPL on the premise that: 1) crude throughput volumes will increase in 2020 when takeaway capacity increases, 2) the petro-chemical project will be accretive when it comes on stream, 3) an 8+% dividend is likely to hold (no cut) and I am paid to wait for a share price increase in a year or two. 8% is a good return while waiting (famous last words).


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## l1quidfinance

I had to sell. 

The finiancials just do not look appealing to me. I'm sure you will all see a nice up tick in price now I'm out.


----------



## gibor365

Actually I am planning to initiate position with new TFSA contribution when it's below $20, but I'm not sure that dividend is stable


----------



## spdr1812

I want to add as well , was going to on the dip in Dec , then looking at and setting alerts again now .. just not sure about that polypropelene plant . Great if there is no hiccups , but if there is .. ?


----------



## l1quidfinance

For those looking to add, what is the reasoning? 

I'm curious to understand the appeal other than it is currently at a lower price and has previously performed well. Maybe i'm missing something obvious. For me the intent was that this was going to be a complete buy and forget stock. 



> I bought IPL on the premise that: 1) crude throughput volumes will increase in 2020 when takeaway capacity increases, 2) the petro-chemical project will be accretive when it comes on stream, 3) an 8+% dividend is likely to hold (no cut) and I am paid to wait for a share price increase in a year or two. 8% is a good return while waiting (famous last words).


Even the above from AltaRed makes it seem like more of a speculative play.


----------



## doctrine

I bought on the dip in Dec at $18.91. So far so good on the plant. Most of the big pieces will be in situ in the next few months. Some of the pieces are just spectacular.


----------



## gibor365

spdr1812 said:


> I want to add as well , was going to on the dip in Dec , then looking at and setting alerts again now .. just not sure about that polypropelene plant . Great if there is no hiccups , but if there is .. ?


Yeap, hell knows how this plant would affect stock


----------



## agent99

gibor365 said:


> Yeap, hell knows how this plant would affect stock


Chemical/Petrochemical projects never make a lot of money. 

This a large project and will eat up a lot of capital. It is also not the business they know. At same time Pembina is building a similar plant. Together they will produce a large amount of propylene and polypropylene. Where do those products come from now? USA? And where will they be sold? USA? China? 

I would be more concerned about market prices once excess capacity comes on line and maybe tariffs. I worked in Petrochemical industry and saw some plants get shut down early. Not the greatest of businesses to be in. BTW, I own both IPL and Pembina as well as Methanex (who have built and shut down several plants along the way!)

What I would like to see, is an analysis that shows the effect on IPL and Pembina if these plants are not successful.

This article discusses the Pembina project, but mentions and is likely also applicable to the IPL project. 

https://seekingalpha.com/article/4233661-pembina-verge-becoming-petrochemical-player


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## Eder

Theres about 30 billion of petro chemical investment proposed for Fort Saskatchewan of which IPL is a small piece. Players in the industry like DOW are proposing doubling their ethylene foot print. 
IPL has enough processing to supply its own propane requirements. The market is there for the product & demand is expected to grow...the question is does IPL have the expertise to get this plant running profitably quickly or will the be years of losses as process is sorted out...I guess we'll find out. I'm still holding ,here's hoping IPL has a clue.


----------



## gibor365

> the question is does IPL have the expertise to get this plant running profitably quickly or will the be years of losses as process is sorted out...I guess we'll find out. I'm still holding ,here's hoping IPL has a clue.


 This is the major reason why I'm reluctant to initiate position


----------



## Italicum

Not meant to antagonize: after selling CPG, SU, part of ENF/ENB and TRP, this stock is on the chopping block as i continue to decarbonize my portfolio.


----------



## agent99

gibor365 said:


> This is the major reason why I'm reluctant to initiate position


Running a $4 billion petrochemical complex is hardly a way to get into the chemicals/plastics business. You can't go and hire people with the experience and know-how to run and maintain such a facility. As mentioned, I worked for many years in this industry, for a long established major company. I expect IPL and Pembina to have problems for several years. 

What I don't know and need to research, is how the worst case scenario will affect IPL. Let's say, they try for 2 or 3 years to get the facility running smoothly. Then they sell it off at a fire sale price and go back to doing what they know how to do. Lets say they lose $3billion. How will that affect the company?


----------



## Eder

They already have close to 85% average 9 year term take or pay contracts for their output. Should add 450 million/year to earnings. They say theres no need to issue more equity to get the plant built.
Sounds like a no brainer as they have their own feed stock.
I hope Fluor provides an instruction book on how to run the place.


----------



## gibor365

> What I don't know and need to research, is how the worst case scenario will affect IPL.


 Agreed! Please share if you come with any ideas!


----------



## agent99

Eder said:


> I hope Fluor provides an instruction book on how to run the place.


They wont! Fluor is just an engineering job shop. They don't have process know-how. They hire engineers and designers to prepare the detailed engineering drawings, manage procurement and then help manage the construction that will be done by others. Technology is licensed from a Honeywell subsidiary for the Propane Dehydrogenation and from W.R.Grace for polypropylene . Hopefully IPL will get training at facilities associated with the licencors. I suspect there will be a long learning process after the initial startup. A well established petrochemical company would have it's own engineers closely monitoring the engineering firm's designs. But I doubt IPL have those resources.

Key for IPL will be to actually produce the product that they have contracted to sell in a timely way. I own IPL shares, so I hope they are successful. But maybe should take some profit while going is good.

ADDED: Seems the 3.5Billion for this project is a very large amount compared with capitalization of the company as a whole:

Market Capitalization $9.2 Billion
Debt(September 30, 2018) $5.3 Billion
Enterprise Value $14.5 Billion

I don't understand this too well, but doesn't making a $3.5+Billion investment in a business they are not familiar with, add a lot of risk to this company?


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## AltaRed

IPL will hire some experienced employees away from established companies and have them put together an O&M team. Even retired grey hairs for perhaps a 2 year contract to get the organization staffed and trained. The key mistake IPL can make is to go cheap on staffing and training. There will be glitches for sure but they won't be catastrophic.


----------



## OptsyEagle

AltaRed said:


> IPL will hire some experienced employees away from established companies


That is usually how it is done in most expansions like this. Doesn't always work perfectly but there are really no other ways to do it. Well, it usually works out perfectly for that particular employee or employees, but sometimes they think they know more then they actually do. The leather usually hits the pavement when they take on this type of responsibility, but either way, whether it works out well or not, they get rich.

I have seen this quite a few times. Some do actually work out. On time, on budget, revenue comes in as expected. Just not many. It all depends on the employee they steel and it is always easier to steel a sub par employee then a really, really useful one.


----------



## agent99

AltaRed said:


> IPL will hire some experienced employees away from established companies and have them put together an O&M team. Even retired grey hairs for perhaps a 2 year contract to get the organization staffed and trained. The key mistake IPL can make is to go cheap on staffing and training. There will be glitches for sure but they won't be catastrophic.


They won't find personnel experienced in those processes in Canada. Perhaps they may have arranged as part of the process licenses to have experienced teams supplied by licensors during start up period? That is not uncommon. Hopefully IPL's key people would also have training at existing plants.

My experience - Even at one of the largest and most competent chemical companies in the world, the teams they put together couldn't get new plants running properly. They then had to bring in teams from similar global plants to sort out the problems. Sometimes took several years. Being new in this industry, IPL won't be able to do that. 

Another concern would be over-runs on the project. That $3.5Billion could end up being higher just to get the project completed. Then if they run into problems, there could be additional capital required. Still sounds like a very big number considering size of company. Pembina have a partner with deep pockets. Does IPL?

Anyway, I just hope they know what they are getting into and have made sensible plans. Personally, I think I might reduce my holdings in IPL as we get closer to project completion.


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## Eder

Well there's no shortage of process engineers in Alberta right now. I think timing is pretty good on this project and so far it is on time & budget. 

Exciting times to see stuff getting built , Alberta doing it on its own as usual.


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## gibor365

> They won't find personnel experienced in those processes in Canada.


 I agree! Maybe I need to wait when problem with this plant gonna start (and they will). There will be usual market overreaction and maybe good time to buy ....


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## john.cray

An update about the premium dividend taxation from IPL:

Just received my T5 statement from Scotia iTrade for income from Canadian Sources. The extra 1% distributions from IPL are shown as a separate line items from the main dividend. The main dividend is marked as eligible and the extra stuff is "OTHER INCOME FROM CANADIAN SOURCES". So it's all in there and I will report it as such. No other calculations seem to be needed.


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## gardner

Perhaps the completion of this project was the driver for yesterday's bump.



> Inter Pipeline Ltd. announced today that it successfully placed into service a diluent and bitumen blend pipeline connection to Canadian Natural's Kirby North oil sands project.


https://finance.yahoo.com/news/inter-pipeline-completes-kirby-north-155500711.html


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## AltaRed

For you construction types... June drone flyover of construction site of petrochemical complex https://twitter.com/inter_pipeline/status/1144694481750388736 No indication of whether it is on budget or schedule.


----------



## Dilbert

^Interesting, thanks for that AR.


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## doctrine

AltaRed said:


> No indication of whether it is on budget or schedule.


"We are pleased to provide transportation services to this high-quality oil sands project, having completed construction six months ahead of schedule and under budget," said Christian Bayle, President and Chief Executive Officer of Inter Pipeline

Read more at https://stockhouse.com/news/press-r...-north-connection-project#bg4IPWHf85BfwoZJ.99


----------



## AltaRed

I mean the petro-chemical project. The just finished pipeline piece is just a ripple in IPL's business.


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## MrMatt

AltaRed said:


> I mean the petro-chemical project. The just finished pipeline piece is just a ripple in IPL's business.


I wonder how bad the anti-plastic movement will hurt the PP market.


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## AltaRed

Polystyrene in its various forms is the typical single use plastic made from styrene (which starts with benzene and ethylene) that is not really recycled. IPL is not making that. It will be Polypropylene which is used in a wide range of mostly recyclable products. I don't see much of an impact, if anything at all.

Added: looked up styrene plant capacity. Looks like production and demand continues to grow with new plants almost exclusively in China. Could be a rude awakening.


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## MrMatt

AltaRed said:


> Polystyrene in its various forms is the typical single use plastic made from styrene (which starts with benzene and ethylene) that is not really recycled.
> 
> IPL is not making that. It will be Polypropylene which is used in a wide range of mostly recyclable products. I don't see much of an impact, if anything at all.


I think straws are PP.


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## agent99

AltaRed said:


> IPL is not making that. It will be Polypropylene which is used in a wide range of mostly recyclable products. I don't see much of an impact, if anything at all.


It may be that proposed legislation on single use plastics may not affect IPL and PPL. Have they even determined yet which plastic products will be banned? I thought there was to be a science review. Probably not before an election!

From what I recall, polypropylene is second only to polyethylene in terms of total global plastic waste produced. Hard to see that it would not be targeted.


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## AltaRed

I only know PP is used in everything from car seats to rugs to fabrics to tens of thousands of other things, including those nasty 6 pack can rings. It is the most versatile plastic building block out there, and is the most easily recyclable of the plastics. I don't think anyone is very worried. FWIW, I think it has been decades since the last styrene based plant has been built (too lazy to look it up), with the market knowing the days were numbered for essentially non-recyclable rigid plastic.


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## MrMatt

agent99 said:


> It may be that proposed legislation on single use plastics may not affect IPL and PPL. Have they even determined yet which plastic products will be banned? I thought there was to be a science review. Probably not before an election!
> 
> From what I recall, polypropylene is second only to polyethylene in terms of total global plastic waste produced. Hard to see what it would not be targeted.


Yes, Trudeau promised "science based" policy, but those are just words to sound cool.

There was no science behind their Marijuanna policy.

When they say "science based", they mean electoral science. If it will help them win seats, they'll go for it.


Yes Marinjuanna is my favourite punching bag. The science was pretty clear, the data coming from US jurisdictions is pretty clear. 
It's a bad policy that is very popular. The science of elections wins.

I have zero faith in a Liberal government to ever implement a good policy in favour of the politically beneficial option.


----------



## john.cray

Interesting move for IPL today - up 9.30% as I write this. 
Read about speculations of sales of assets to finance Heartland and a turned-down bidder for $30/share. None of those confirmed by IPL. 
Earnings are coming in the afternoon too.


----------



## agent99

john.cray said:


> Interesting move for IPL today - up 9.30% as I write this.
> Read about speculations of sales of assets to finance Heartland and a turned-down bidder for $30/share. None of those confirmed by IPL.
> Earnings are coming in the afternoon too.


They just received 'commercial support' for a new pipeline project. Maybe that affected the price? 



> CALGARY, Aug. 7, 2019 /CNW/ - Inter Pipeline Ltd. ("Inter Pipeline") (TSX: IPL) announced today that it has received commercial support for the construction of a $100 million pipeline connection between its Bow River and Central Alberta pipeline systems. The new pipeline, called the Viking Connector, will link various grades of light crude oil from the Viking and Mannville formations in east-central Alberta to the Edmonton market hub.


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## peterk

Excellent. Was loading up on IPL below $20.

What does "commercial support" mean? Agreement from the bank to make a loan? Buyers committing to pipeline space?


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## AltaRed

I would read contracted support from shippers, which then should automatically get bank financing if the majority of shippers have bank credit worthiness. Banks do look at the financial strength behind the underlying conracts.


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## doctrine

IPL is a big holding of mine and I last added shares back in Dec at $18.91 (noted in post #462). 

They have enough financing to complete the Heartland project. They reported it on time and on budget. They don't have to sell the European tank business, although it is a big of an outside asset in my opinion for an Alberta pipeline. 

IPL is definitely a takeover candidate, it's the smallest investment-grade publicly-traded pipeline company in Canada. Even Pembina is 2.5 times the size now. I think $30 a share is closer to fair value. Happy to hold for a while in any case. It is pretty high on my 'add' list below $22.


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## AltaRed

I am of the same view as regards IPL and its likely fair value. I don't do any rigor in fundamental analysis, but I do review valuations, etc.


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## agent99

I have quite a bit of IPL bought back when price was much lower (<$10.00). As discussed earlier, I have my doubts about the PP plant coming on line smoothly and without over-runs. Just don't think IPL have enough expertise in petrochemicals & plastics to pull it off. Seems I am not alone in this thinking. As a result, I sold off some of my shares in non-taxable accounts before prices dropped to current levels.


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## Dilbert

IPL trading halted as of now. The company executives are refusing to confirm or deny a takeover offer discussed in the G&M article.


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## john.cray

Dilbert said:


> IPL trading halted as of now. The company executives are refusing to confirm or deny a takeover offer discussed in the G&M article.


Yes, news pending. Additionally I found this:


> The executives did provide detail about a separate announcement Thursday after markets closed that the company is putting its European bulk petroleum storage business on the block -- it has operations in the U.K., Denmark, Sweden, Germany, Netherlands and Ireland with about 37 million barrels of storage capacity.


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## john.cray

http://www.interpipeline.com/news/news-releases.cfm?newsReleaseAction=view&releaseId=1328



> CALGARY, Aug. 9, 2019 /CNW/ - Inter Pipeline Ltd. ("Inter Pipeline") (TSX: IPL) is responding to a request received this afternoon from the Investment Industry Regulatory Organization of Canada to comment on recent media reports related to the receipt of an unsolicited proposal to purchase Inter Pipeline. While it is the company's policy not to comment on market speculation or rumours, Inter Pipeline confirms that it received an unsolicited, non-binding, conditional and indicative proposal to purchase the company but it is not in negotiations with any third party, nor is there any agreement, understanding or arrangement with respect to any such transaction.


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## Dilbert

it was nice to see it close well above $24.00. I have a significant holding across my RSP, TFSA and non registered accounts.


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## hycm53

Every month I receive IPL.TO $0.1425 per share dividend and $0.0014 interest per share. But there's no information about interest income in IPL website except dividend income. Does anyone know why?


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## AltaRed

It is the 1% given to those who do not re-invest as part of the enhanced DRIP. 

http://www.interpipeline.com/investor/sharepricedividends/shdrip/drip.cfm

Added: I believe IPL recently said if/when they sell their European storage business, they will halt this enhanced/premium plan. I agree they should since this plan is nothing more than an incentive to take non-cash dividends and simply increase float. Window dressing at its best.


----------



## hycm53

AltaRed said:


> It is the 1% given to those who do not re-invest as part of the enhanced DRIP.
> 
> Added: I believe IPL recently said if/when they sell their European storage business, they will halt this enhanced/premium plan. I agree they should since this plan is nothing more than an incentive to take non-cash dividends and simply increase float. Window dressing at its best.


Thank you!


----------



## agent99

Noticed that only one of my stocks in one account that was down today was IPL. May have been caused by this "News": PPL going up and down. Not much effect yet.

I have posted before about not being comfortable about these two companies getting into a product that neither knows much about and in such a big way. Have concerns about implementation of the projects in cost effective way as well as whether their expected markets will exist by the time the plants eventually come on line. 

By the way, I have worked for two of the largest chemical/petrochemical/plastics companies in the world. Even they would be hard pressed to pull these projects off without glitches. And they know their business.

We still have a little invested in these pipelines, but not much. I wish they had stayed as pipeline companies. 



> *Credit Suisse on Inter Pipeline And Pembina After China's Plans to Phase Out Single Use Plastics*
> 21 Jan 2020 14:24 ET
> 02:24 PM EST, 01/21/2020 (MT Newswires) -- China's National Development & Reform Commission (NDRC) and the Ministry of Ecology and Environment issued a new policy targeting a gradual ban on single use plastics between 2020 and 2025. Credit Suisse notes that by the end of 2020, China's restaurant industry will face a ban for certain single use packaging in major cities. In addition, the policy sets firm targets for reducing the consumption of single-use plastics by 2025. Credit Suisse finds this development interesting in terms of two different PP projects by Inter Pipeline Ltd. (IPL) and Pembina Pipeline Corporation (PPL).
> 
> IPL expects the Heartland Petrochemical complex to cost ~C$3.5 billion and to be online by the end of 2021. Similarly, by using a recent presentation, PPL's net investment expected investment in the CKPC PDH/PP facility is expected to be C$2.7 billion with an H2 2023 online date. Clearly, Alberta is positioned with an excess of propane that helps support return economics. The PP market was projected to have a significant amount of growth. Yet, Credit Suisse notes that shifts in China's policies may have a pronounced impact on the global market.
> 
> "In the future, a key area to watch will be the substitution of PP (and other chemicals) into other markets."


----------



## AltaRed

I find it difficult to worry about the PPL and IPL projects of which the products, as I understand it, will have nothing to do with single use plastics. I suppose the worry is the spillover effect on plastics generally but I certainly don't know enough about the petro-chemical/plastics business to have a clear understanding. Perhaps it is time to educate myself. I have a partial position in IPL on the basis the yield is high enough for me to be paid to wait for one, or both of: 1) more throughput through their oil sands pipelines when Line 3 and TMX come online, and 2) the petro-chemical plant comes onlilne. Either one should be a major cash flow boost, the former being more certain than the latter.

Maybe Agent99 could provide a Coles notes view of plastics and petro-chemicals?

Added: When I read stuff like https://www.fortunebusinessinsights.com/industry-reports/polypropylene-pp-market-101583 and https://www.prnewswire.com/news-rel...-packaging-in-industries---tmr-300796486.html I don't see a real problem. Granted there will also be plenty of supply, but since PPL and IPL will have cheap propane feedstock, it seems to me they should be able to compete. I suppose that is really the billion dollar question.


----------



## OptsyEagle

What I think is weird is that it seems the stock market agrees with you that IPL is going to have a large amount of trouble building this new plant, but seems to assume PPL will have no problem at all.

Quite bizarre. I agree. It is a mistake waiting to be realized, in my opinion. They did great in the pipeline monopoly business, so why should the capital intensive cyclical commodity business be any different, right? Isn't it all the same?


----------



## agent99

OptsyEagle said:


> They did great in the pipeline monopoly business, so why should the capital intensive cyclical commodity business be any different, right? Isn't it all the same?


No, it's really quite different. Pipelines don't rely on complex technology to manufacture a product. They just move a product that is owned by others. They may skim off some byproducts using fairly simple processes that are well known in their industry. None of that is like building and operating a multi-billion dollar petrochemical complex. Or marketing the final product globally.

I hope they both pull this off, but for our retirement portfolio, this is a bigger risk than some of the others that people on these forums worry about. I have kept a small amount of each, because I am interested to see how they make out.


----------



## OptsyEagle

I was being sarcastic. I agree with every point you made. 

My guess, these mistakes come from the inability to grow the business, which has been curtailed in Canada's pipeline area The only way Management can justify bigger salary and bonuses, is to run a bigger company, so they feel it makes sense to risk shareholder money on a Hail Mary pass, that might make them richer. 

Heads they win, tails we lose.


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## agent99

OptsyEagle said:


> I was being sarcastic. I agree with every point you made.


Looks like we made need forum to add the Sarcasm Font!

https://thenextweb.com/dd/2011/12/12/finally-sarcasm-has-a-voice-in-print-with-its-own-font/


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## Eder

Thats not really the case....IPL owns the feed stock so no commodity price fluctuations or supply restrictions to deal with. 70% product is take or pay and the plant is (so far) on time & a bit below budget. 

Execution risk is huge but hopefully they'll get an owners manual or something from Fluor.


----------



## AltaRed

This is mostly a cost of service project. See this for Coles notes version http://www.interpipeline.com/files/pdf/IPL - Heartland Complex - Fact Sheet - Q3 2019 - FINAL.pdf

See slides 11-23 of the Jan 2020 Investor Presentation for more gory detail than one needs to know. http://www.interpipeline.com/files/pdf/IPL Investor Presentation January 2020 FINAL2.pdf


----------



## agent99

Eder said:


> Thats not really the case....IPL owns the feed stock so no commodity price fluctuations or supply restrictions to deal with. 70% product is take or pay and the plant is (so far) on time & a bit below budget.
> 
> Execution risk is huge but hopefully they'll get an owners manual or something from Fluor.


Fluor have no clue how to operate plants. They are a design-construct-project management firm. By the way, I worked for them too! (on contract in early retirement) Technology would have been purchased from Licencees. Training and start up troubleshooting would have to come from them. 



> Honeywell International Inc. subsidiary Honeywell UOP LLC will license its proprietary C3 Oleflex technology for production of propylene at the PDH portion of HPC, while W.R. Grace & Co. will provide its proprietary Unipol process technology for the complex’s PP unit


I certainly hope that IPL and PPL have all their ducks in a row and pull off these projects. They will, but there may be delays and cost overruns. Demand may be the stumbling block. The world is moving away from packaging and in fact any limited use plastic products. Even when they they can be recycled, they mostly still end up in landfills. 

That reminds me, I have to go pick up our now empty (plastic) recycling box!


----------



## AltaRed

It really is too bad EPC firms cannot learn from the 50 other such PP plants operating around the world, if not at least the Gulf Coast. They should almost be cookie cutter in design these days but alas, it seems wheels seem to get re-invented.

Just like Imperial's Kearl oil sands plant had significant operating issues when all the learnings should have come from oil sands plants before them. It defies logic.

As I mentioned, I have a half position in IPL and maybe should consider a half position in PPL later this year. Hedge my bets across both of them.


----------



## Eder

agent99 said:


> Fluor have no clue how to operate plants. They are a design-construct-project management firm.


IC...My business was design build construction/managment as well but we did provide owners manuals and operating seminars...I would have thought Flour's engineers would know how their plant works?


----------



## AltaRed

EPC firms do in order to write the manuals BUT at the same time, only the operating company really knows how to operate, develop and fine tune operating procedures. That is why about a year before commissioning, the operating team starts to assemble an operating team, putting several of the members into the EPC offices. Their responsibilities include O&M procedures and training of operators. Often, the operating company will make a deal with someone (if they don't have like operations of their own) to insert operators into an operating facility to learn hands on. We did that all the time in our multi-national operations. Agent99 is being a bit flippant but has a valid point.

From the investor presentation, IPL is already forming an operating team and the plant is still almost 2 years away from commissioning/operations. They already know how to operate fractionation and straddle plants, but will need some petro-chemical experience. Perhaps a deal to insert some members into the Joffre facility or one of the Sarnia plants.


----------



## agent99

Eder said:


> IC...My business was design build construction/managment as well but we did provide owners manuals and operating seminars...I would have thought Flour's engineers would know how their plant works?


It is not their technology or plant. Fluor's job is to convert the process specifications, provided by others, into detailed engineering, then manage procurement and construction. They handle construction directly, but would let contracts to others and manage overall schedules and hopefully costs.


----------



## agent99

Saw this on Marketbeat. Don't those Payout Ratios look kinda high?? 

INTER PIPELINE (TSE:IPL) DIVIDEND INFORMATION
Inter Pipeline pays an annual dividend of C$1.71 per share, with a dividend yield of 7.66%. IPL's next monthly dividend payment will be made to shareholders of record on Friday, February 14. Inter Pipeline pays out 119.32% of its earnings out as a dividend.
Next Dividend:	2/14/2020
Annual Dividend:	$1.71
Dividend Yield:	7.66%
Payout Ratio(s):* 119.32% (Trailing 12 Months of Earnings)*
*169.06% (Based on This Year's Estimates)*
*1,642.23% (Based on Cash Flow)*
Most-Recent Increase:	$0.0005 increase on 1/21/2020


----------



## AltaRed

There has been no increase in dividend since the last 'stupid' one in late 2018. It is strictly rounding differences in certain months.

Take a look at the first several pages of http://www.interpipeline.com/files/pdf/IPL Investor Presentation January 2020 FINAL2.pdf The dividend is covered by FFO but is way too high at ~80%. 

A better view is from page 5 of Q319 MD&A http://www.interpipeline.com/files/pdf/investor-relations/2019/2019 Q3 MD&A.pdf where in the 9 months ending Sept 2019
- dividend of $527M is covered by $656M of FFO, but not $438M of earnings. 
- I don't worry about the earning number in the short term since D&A is not a cash item, but over the long term it is fundamentally critical
- I do worry about their D/E being as high as about 1.5 and their ability to complete funding of the petro-chemical project. 2019 was the year of highest capex, but 2020 is still substantial.

I avoid sites like Marketbeat which cannot present a full picture. Go straight to the MD&A of actual reports.

I would not own a company with metrics such as this, except I do have a partial position in IPL on the premise the dividend is paying me to wait until large increases in cash flow will come in 2022 when: 1) pipeline takeaway capacity with TMX and Line 3 will increase IPL's oilsands volumes and tolls substantially, and 2) the petro-chemical complex goes into operation. IOW, I am making somewhat of a speculative bet that IPL share price will go up ~50% or more when these things come to pass. My ACB is ~$20.


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## agent99

On this forum, we have endless discussions about a few point differences in HISAs or GICs and then same people (including myself) own a high risk stock like IPL!


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## like_to_retire

agent99 said:


> On this forum, we have endless discussions about a few point differences in HISAs or GICs and then same people (including myself) own a high risk stock like IPL!


Yes, because we want minimal risk with the fixed income, so a single point is very important to maintain that precious capital.

With equities, we've assigned the risk to that category and are willing to lose probably half that capital on a bad day.

ltr


----------



## agent99

like_to_retire said:


> Yes, because we want minimal risk with the fixed income, so a single point is very important to maintain that precious capital.
> 
> With equities, we've assigned the risk to that category and are willing to lose probably half that capital on a bad day.
> 
> ltr


We can put our investments into boxes and look at them that way. But really, it's all money. Why go to lengths to save or make a few pennies in the FI box when we are prepared to take big losses (or make big gains) in the equity box? 

I would rather look at portfolio holistically. Why try an eliminate risk on FI by accepting almost no return, and take unnecessary risk on equity (like owning IPL at present). Maybe own more secure equities like dividend aristocrats and take a little more risk on FI by owning Corporates or replacing some FI with pfds?

Anyway, that's what I have always tried to do. Mind you, I have also owned some risky equities along the way


----------



## like_to_retire

agent99 said:


> Why try an eliminate risk on FI by accepting almost no return, and take unnecessary risk on equity


Because the no-risk Fixed Income _guarantees _protection of your capital that you require to live in case of a market crash. Owning dividend aristocrats for equity and preferreds for fixed income could result in a large loss of capital in the right circumstance. 

Alternatively, a bunch of GIC's or AAA bonds for fixed income combined with some risky equities for equity will protect the capital and give you a chance to make some money.

ltr


----------



## agent99

like_to_retire said:


> Because the no-risk Fixed Income _guarantees _protection of your capital that you require to live in case of a market crash. Owning dividend aristocrats for equity and preferreds for fixed income could result in a large loss of capital in the right circumstance.
> 
> Alternatively, a bunch of GIC's or AAA bonds for fixed income combined with some risky equities for equity will protect the capital and give you a chance to make some money.
> 
> ltr


I can't bring myself to buy GICs at current rates. To use Fireseeker's term - just treading water. I have a few GICs but all but one 1yr bought recently, have yields over 3%. (21/22/23/24). Now back to adding corporates to ladder when funds are available. Also about 3% yield. At same time ridding portfolio of high yield equities that have become too risky. Overall portfolio risk likely won't change much. That's my approach. We each do what we think is right for us.


----------



## AltaRed

People like LTR and myself, to a varying degree, look at the FI bucket as property insurance in case the big one destroys it all. You don't expect a real return on your insurance premiums so why would you expect that much more from your FI? 

We have enough, like money in a mattress, to supplement annuity and investment income for X years when D-Day happens. It's a muti-year emergency fund and you can only do that with robust FI pickings. That gives us permission to do what we want with the rest of the portfolio. Just a different way of looking at it in one's retirement years. There is no right or wrong answer.


----------



## like_to_retire

agent99 said:


> I can't bring myself to buy GICs at current rates.


If rates drop to zero for the next 5 years, you'll be kicking your butt you didn't get on board.



agent99 said:


> To use Fireseeker's term - just treading water.


What's wrong with that? That's my go-to rate for fixed income. 

0% net is gold when everything goes south.

ltr


----------



## humble_pie

like_to_retire said:


> Because the no-risk Fixed Income _guarantees _protection of your capital that you require to live in case of a market crash. Owning dividend aristocrats for equity and preferreds for fixed income could result in a large loss of capital in the right circumstance.
> 
> Alternatively, a bunch of GIC's or AAA bonds for fixed income combined with some risky equities for equity will protect the capital and give you a chance to make some money.




totally


----------



## agent99

like_to_retire said:


> 0% net is gold when everything goes south.
> ltr


Not sure I would call it gold, but if it feels that way for you, that is fine and what you should do. 

1.5 % real feels better to me.  

During the 08/09 recession our FI holdings actually went up in value. Looking back, we had no GICs at that time. Mind you, we had no need for them. Our bonds just stayed where they were in registered accounts earning interest and there were no defaults.

Dividends from taxable accounts kept flowing in. I am sure you had same experience. Maybe we could have a worse recession? Who knows, but I am not planning for it.

The only thing that FI did for us in 08/09 was psychological. It prevented the bottom line from dropping 30%, like the equity side did, and we probably felt better about that. 

However, enough - This is the IPL thread!


----------



## Borat

I probably own too much as a % of my portfolio of IPL and I'm always conflicted trying to decide whether to trim or to hold and wait for pipelines to be built and the PP to come online.


----------



## agent99

I sold off all the ipl in our registered accounts. Still have 1300 shares in taxable account with a fair size CG. Have sell order on for about 1/2 because I can offset with loss on crescent point. If ipl were to cut div, imagine what that would do share price. This used to be one of my favourites 😞


----------



## like_to_retire

agent99 said:


> I sold off all the ipl in our registered accounts. Still have 1300 shares in taxable account with a fair size CG. Have sell order on for about 1/2 because I can offset with loss on crescent point. If ipl were to cut div, imagine what that would do share price. This used to be one of my favourites 


Yeah, today with its 7.6% dividend, it would be pretty scary to own. Yikes.

ltr


----------



## doctrine

IPL is looking good. The stock should start moving up but maybe towards the end of the year. Note that other major pipeline companies are outperforming and all of them are hitting 52 week highs. PPL and TC are at all time highs and ENB is pushing up towards its 3 year high. IPL is the smallest independent pipeline company in an industry where there is little growth and extreme regulatory risk against expansion. A good company to own and may see takeover action. Less than 24 months until Heartland is online.


----------



## agent99

Luckily, there are always buyers and sellers. Hope I find a buyer at my stop price on Monday


----------



## OptsyEagle

doctrine said:


> IPL is looking good. The stock should start moving up but maybe towards the end of the year. Note that other major pipeline companies are outperforming and all of them are hitting 52 week highs. PPL and TC are at all time highs and ENB is pushing up towards its 3 year high. IPL is the smallest independent pipeline company in an industry where there is little growth and extreme regulatory risk against expansion. A good company to own and may see takeover action. Less than 24 months until Heartland is online.


I would like the $30 per share that management decided was not in my best interest. It is so nice to have them looking out for me. lol.


----------



## AltaRed

OptsyEagle said:


> I would like the $30 per share that management decided was not in my best interest. It is so nice to have them looking out for me. lol.


IPL management was right to reject the bid if, when TMX and Heartland is in operation, discounted cash flow back to today exceeds $30. Institutional investors obviously thought this was the right move too given the nature of the buyer and their own assessment of IPL on forward earnings projections. While there may be over-optimism on how quickly this cash flow will show up, e.g. another year delay in TMX or it taking a year to debug Heartland to get to full production, the sentiment is for a share price well in excess of $30 in 2-3 years. I hold a partial position in a similar belief and getting paid over 8% YOC to wait. I am willing to take that bet for perhaps 2 more years.


----------



## Eder

I hold a largish position in IPL but have soured on the company after management didn't put the buy out offer to the share holders. In this case I feel management ignored the needs of its shareholders....and that ain't right .


----------



## AltaRed

Eder said:


> I hold a largish position in IPL but have soured on the company after management didn't put the buy out offer to the share holders. In this case I feel management ignored the needs of its shareholders....and that ain't right .


You are welcome to vote with your feet and get out. I generally dislike managements that do that sort of thing too, but I think the decision was appropriate here for two reasons: 1) the offer was clearly opportunistic on a beat up stock, and 2) any such deal might have eventually been blocked for national strategic reasons, i.e. chinese control of critical infrastructure notwithstanding there is some supposedly AER regulatory oversight. 

I might have made a different decision by now if a PPL or a similar entity had made the offer. Then it would have been mostly management self-preservation that would have been at play.


----------



## Eder

AltaRed said:


> You are welcome to vote with your feet and get out.


I would have at $30, hopefully I will get the opportunity again. $22 is too cheap.


----------



## agent99

Eder said:


> I would have at $30, hopefully I will get the opportunity again. $22 is too cheap.


$15 or less won't be good either. I luckily have forgotten the sordid details, but I do recall hanging on to Transalta for too long. It traded in same range as IPL does, 
https://www.theglobeandmail.com/investing/markets/stocks/TA-T/full-chart/ Click on 20yrs.
The other stock that I have sold is Vermilion. That and IPL are part of my effort to simplify portfolio while at same time reducing risk.


----------



## OptsyEagle

It's not a big holding for me and although I suspect a mis-step on Heartland will see the share price drop further, I feel that $22 per share pretty much writes off the entire benefit that Heartland would provide. In other words, it has already been discounted in the share price. 

So, although I expect a mis-step or two, and although I expect the stock market to punish the stock accordingly when that happens, I also believe that as investors work their calculators over these developments, they will probably bid the stock back up again. This is barring a mis-step like them coming out and telling us they might need a few Billion more to build the darn thing, which I doubt will be the case.

Anyway, I am watching it. I have my opinion, but I have seen that opinion turn out to be wrong enough that I am always cautious about trading on it.


----------



## Eder

Rumor is that the project actually is on budget but time line is being strained...at any rate all the proprietary junk is on site & in place so the rest is pretty standard build a box construction.


----------



## AltaRed

With a lot of fixed contract pricing as I understand it from the Investor Presentation. As long as IPL's pre-op team which is just getting started doesn't tinker too much with Change Orders, I suspect the cost is pretty solid.


----------



## like_to_retire

I'm always looking at the fundamentals of stocks and whenever I have looked at IPL, it never looks too good. The dividend is ridiculous.

They seem to continually pay out more than they make, and the share price has dropped steadily since 2014 when it was around $38.

I read things such that there are production cuts by the Alberta government, and lots of competition, along with problems experienced by the NGL processing segment, and so as a result the market has priced it accordingly.

But several people here seem to think it is a decent investment that will pay off. I always listen to what Alta says about oil and gas, but with respect, what can he know that the entire market doesn't already know that they have baked into the price? 

Do we believe in market efficiency whereby share prices reflect all information? If there's such a great chance that this Heartland Petrochemical Complex will pay off, then why doesn't the market agree and raise the price?

ltr


----------



## AltaRed

It's a question of who is willing to wait, and who is not willing to wait. The market is not willing to wait, at least not 2 more years and has discounted the price.

What some people may be missing is the dividend is more than fully covered from COS, and fee based fixed income so there is no exposure there on the dividend. The capital program is essentially a combination of debt AND the commodity based (variable) NGL processing income. I've written on concerns of NGL variable processing income before. It was a big component of 2018 results and IF the dividend was NOT covered by COS and fee based cash flow, I would have been gone from this name (maybe never in it) to begin with. I look for that number with each quarterly result. As long as the number is positive, I go another quarter. I also watch their D/E ratio. It is still in the ballpark with some other pipelines interestingly enough, so I am not concerned about that.....yet. 

2020 is really the year that makes or breaks this. Their capex program will be winding down and if NGL processing revenue holds through 2020 without a major haircut, this could be a 2 bagger by 2022 when it becomes a cash flow machine. There is a lot of price upside post 2021 if the current plan works out. Anyway, that is how I am looking at it. Right now, I don't have another better opportunity sitting on the Buy list I am willing to bite on in this 'high' equity market, so am staying the course....one quarter at a time.


----------



## agent99

like_to_retire said:


> Do we believe in market efficiency whereby share prices reflect all information? If there's such a great chance that this Heartland Petrochemical Complex will pay off, then why doesn't the market agree and raise the price?
> 
> ltr


Exactly. 

I like many others fell in love with the company and it's dividend. But the company's existing business is faltering and the new one is one that they are pouring a HUGE amount of money into, and have no experience in. For me, time to move on. Are those hanging on hoping for a big capital gain? I would rather move money to a much lower risk blue chip that pays a slightly lower dividend. Names like CM, BCE and others have yields over 5%. Maybe ZDV at about 4.3% might work for me.


----------



## AltaRed

FWIW, from Morningstar, BCE's 3 and 5 year CAGR is less than IPL's dividend yield, and 15 year CAGR is barely above it. That would suggest there is nothing special about BCE at all, even though I have owned it for a long time. We need to be careful of our own perceptions.


----------



## agent99

Using rear view mirror to judge the future can be dangerous. 
BCE and IPL are quite different animals. Apples and Oranges. 
Quite different risk.

Anyway, that's enough of IPL for me. Each of us should make our own decisions.


----------



## Eder

Well I've owned IPL since 2010, each 10k block of cash I put into it has grown to almost 38k blowing away other stalwarts like BCE & CIBC and more than double the return of the index.. I did sell a bunch when it was over $30 so it has been a stellar investment for me so far. 

Still I'd like to kick Christian Bayle in the nuts for that $30 offer fiasco.


----------



## AltaRed

I would have taken it too and deployed the capital elsewhere. Better received today than circa 2 years from now.


----------



## doctrine

like_to_retire said:


> I'm always looking at the fundamentals of stocks and whenever I have looked at IPL, it never looks too good. The dividend is ridiculous.
> 
> They seem to continually pay out more than they make, and the share price has dropped steadily since 2014 when it was around $38.
> 
> I read things such that there are production cuts by the Alberta government, and lots of competition, along with problems experienced by the NGL processing segment, and so as a result the market has priced it accordingly.
> 
> But several people here seem to think it is a decent investment that will pay off. I always listen to what Alta says about oil and gas, but with respect, what can he know that the entire market doesn't already know that they have baked into the price?
> 
> Do we believe in market efficiency whereby share prices reflect all information? If there's such a great chance that this Heartland Petrochemical Complex will pay off, then why doesn't the market agree and raise the price?
> 
> ltr


-2014 was a peak for oil and gas. Also my assessment in 2014 was IPL was overpriced. I became more interested in 2017-18 when the valuation began to catch up and free cash flow increased significantly.
-Heartland is still 2 years away which is significant. Markets usually don't price these things in until 6-9 months. You also never know where markets will price it - IPL could be still $23 a share in 2022. The difference will be the payout ratio will drop to 50-60% and then it remains to be seen what management does and how the market reacts. 
-Given the takeover was from a Chinese company and likely to be scrutinized and very likely rejected, it makes sense it was not pursued. I would rather keep my 7% yield in any case for a few more years. There are too few good companies like this and I plan on enjoying it as long as it lasts.


----------



## like_to_retire

AltaRed said:


> It's a question of who is willing to wait, and who is not willing to wait. The market is not willing to wait, at least not 2 more years and has discounted the price.


Since January, I have had Inter Pipeline Ltd. IPL.UN on my watchlist ever since AltaRed schooled me on my novice assessment of this stock and its dividend, assuring me that its _"dividend is more than fully covered from COS, and fee based fixed income so there is no exposure there on the dividend"_.. 

At the time, the market on IPL was $22.30, and the overall consensus was that it was a decent price if you were willing to wait. Others chimed in that they were willing to wait, including member Eder who offered a YouTube video of the band Flying Lizards singing, "Money, that's what I want"..................... he obviously enjoyed the dividend while waiting.

Today the price is $19.86. Morningstar Quant reports puts this as 4 stars, "below fair value" - (fair value being $22.06). They seem to like it. The 5 star, slam dunk price is $19.57. Not far to go. 

The dividend today is paying about 8.6% and 131% payout ratio. To me, this is still crazy town as the industry average today is 5.8% and 104%. But, I suspect I would be out-voted. "Money, that's what I want".................

ltr


----------



## MrMatt

like_to_retire said:


> Since January, I have had Inter Pipeline Ltd. IPL.UN on my watchlist ever since AltaRed schooled me on my novice assessment of this stock and its dividend, assuring me that its _"dividend is more than fully covered from COS, and fee based fixed income so there is no exposure there on the dividend"_..
> 
> At the time, the market on IPL was $22.30, and the overall consensus was that it was a decent price if you were willing to wait. Others chimed in that they were willing to wait, including member Eder who offered a YouTube video of the band Flying Lizards singing, "Money, that's what I want"..................... he obviously enjoyed the dividend while waiting.
> 
> Today the price is $19.86. Morningstar Quant reports puts this as 4 stars, "below fair value" - (fair value being $22.06). They seem to like it. The 5 star, slam dunk price is $19.57. Not far to go.
> 
> The dividend today is paying about 8.6% and 131% payout ratio. To me, this is still crazy town as the industry average today is 5.8% and 104%. But, I suspect I would be out-voted. "Money, that's what I want".................
> 
> ltr


Their new PP plant should be coming online relatively soon.


----------



## agent99

The pp plant is scheduled to be brought on line at the end of 2021. Almost 2 years from now.
Expect at least 6 months of troubleshooting after that. Maybe more because they have no experience in this business.
I had a LOT of IPL but sold all but 500 before the current crash. Loved the dividend, but too risky for me with all the debt they carrying. There is good reason for the high yield.


----------



## AltaRed

MrMatt said:


> Their new PP plant should be coming online relatively soon.


Late 2021 per Slide 11 of http://www.interpipeline.com/files/...ntation_-_February_2020_-_Q4_2019_-_FINAL.pdf

LTR - Look at slides 8 and 26 for dividend coverage. Slide 29 visualizes one of the concerns I had back in 2018, e.g. the proportion of NGL processing revenue. As suspected, 2018 happened to be a record year for NGL processing revenue with 2019 slipping from that (as expected) to a more normal margin.

I have no crystal ball. There is some risk if plant startup does not go well in late 2021, but the upside potential is huge in 2022 and beyond. By late 2022, there should also be more revenue from oil sands transportation with TMX coming online. That long waiting period keeps IPL stock prices stuck where they are.

Added: Seeing Agent99's post, I don't have the same degree of angst about start up issues. There will be issues....there always is, but IPL has plenty of Redwater and straddle plant (Empress and Cochrane) experience and their best operators will be charged with putting together the operating team. I agree this plant is NOT a liquids plant, but they are not neophytes in processing. Time will tell. I hold IPL and while it does not have the usual metrics I generally look for in a stock, in this case I am paid to wait, and thus to take what I believe is a calculated bet.


----------



## peterk

agent99 said:


> The pp plant is scheduled to be brought on line at the end of 2021. Almost 2 years from now.
> Expect at least 6 months of troubleshooting after that. Maybe more because they have no experience in this business.
> I had a LOT of IPL but sold all but 500 before the current crash. Loved the dividend, but too risky for me *with all the debt they carrying.* There is good reason for the high yield.


Who here has looked at their debt? Are they at risk of being prevented from accessing more funds if the heartland costs get overrun significantly? Or will they be able to take on more debt if needed and the project will just be less profitable than first expected...


----------



## Synergy

I haven't followed IPL for the past 4-5yrs but the 5yr chart compared to PPL looks pretty ugly. No pipeline exposure for me at the moment, other then inside a few index funds / ETF's. The yield is trying to tell us something.

I have been keeping an eye on ENB as a potential future buy.


----------



## OptsyEagle

peterk said:


> Who here has looked at their debt? Are they at risk of being prevented from accessing more funds if the heartland costs get overrun significantly? Or will they be able to take on more debt if needed and the project will just be less profitable than first expected...


The debt is not overly pretty. Debt to Equity ratios don't work all that well for pipelines because these companies depreciate these pipelines for tax purposes, which reduces their book value, but I am not sure they lose their value very much, in reality. They probably work a lot more like a house, that is properly maintained, and go up in value, but I can't say for sure. That said, they do currently have a fair amount of debt on their books

Can't say what a recession or any corporate worry in the bond market, might do to their demand for financing. The last hybrid offering was at 6.875%, which was a couple percentage points higher then most of their other issued bonds. Still cheaper then using stock, if only from the after tax dividend savings alone. They probably will need at least another $billion more in debt for 2020, to keep up the ongoing capital projects.

Most of their operating cash flow would go to dividends if it was not for their premium dividend/DRIP program that saves them about 1/2 that amount ($350 million) of dividends. Unfortuneately it also ends up in them issuing $350 million in new shares at current prices, each year, maybe even more if I knew how the premium dividend and/or DRIP program worked.

Anyway, by looking at the stock price, it appears the stock market is probably aware of this debt situation and has discounted it accordingly. If the bond market gets more discerning I think this company will have a few issues to deal with, but as long as the money flows freely, close to how it has in the past, financing and supporting all of it, should be manageable for them.

Just my opinion of course.


----------



## AltaRed

The last time I looked, IPL's D/E ratio of about 1.6 was not out of line relative to other pipelines. By nature, pipelines have large debt as part of their regulated tariffs, albeit the petro-chemical plant won't be regulated....but it will be based on a COS or fee based service with limited commodity exposure. Still, that ratio is going to go higher until the petro-chemical plant is finished. Perhaps as high as 2??? which is getting uncomfortable.

As noted, the 2 remaining key risks are capital overruns and startup issues. The former is pretty much 'in hand' given well over half of the capex is now spent and much of the remaining capex is fixed contract based, and as of February, IPL maintains the project is on budget and schedule. The key remaining risk is commission and start up issues some 20-22 months from now.

As to debt levels, I think IPL is counting on selling their European terminal business to close the gap on funding the project. Why they got into the business to begin with is a mystery but that is water under the bridge. Take a look at the investor presentation I linked up thread to look at their funding 'scheme'. Time will tell.


----------



## cainvest

IPL took a 23% loss today so I might have to look into it this. It'll be a small position for me anyways, I don't want to become too heavy in the energy sector.


----------



## Synergy

cainvest said:


> IPL took a 23% loss today so I might have to look into it this. It'll be a small position for me anyways, I don't want to become too heavy in the energy sector.


Tempting. I had been considering ENB but decided on XEG. I have no individual names in the energy sector at this point and very light in energy / oil overall. I predict a little more pain before things get better so I wouldn't be in any rush. Or ease into a position over a few weeks. I invest every 2 wks regardless of the market so I have to put the funds somewhere.


----------



## MrMatt

I like the PP plant but a lot of their EBITDA is oil sands related, not sure how much of that is an impact.


----------



## AltaRed

IPL, PPL, GEI and KEY continue to free fall, most likely due to the commodity side of their businesses (my guess at the moment). Their processing margins could disappear, i.e. their feed stock prices have not changed, but the prices of their liquid products will take a hit due to relationships with crude oil pricing.


----------



## john.cray

AltaRed said:


> IPL, PPL, GEI and KEY continue to free fall, most likely due to the commodity side of their businesses (my guess at the moment). Their processing margins could disappear, i.e. their feed stock prices have not changed, but the prices of their liquid products will take a hit due to relationships with crude oil pricing.


Are you thinking of adding some more to your position?


----------



## AltaRed

No because I have no cash I am willing to deploy anyway. I am full invested, except for the fixed income/cash reserve I maintain to get me through equity bear markets and I won't compromise that plan regardless of the equity opportunities that might arise.


----------



## agent99

$12.xx now. I sold most of ours quite recently at about $22 . Now down 45% from there. 

Wish I had sold ALL instead of just enough to balance a loss.  Mind you, our ACB is only about $9.xx, so still time to sell the remaining 600.


----------



## AltaRed

agent99 said:


> $12.xx now. I sold most of ours quite recently at about $22 . Now down 45% from there.
> 
> Wish I had sold ALL instead of just enough to balance a loss.  Mind you, our ACB is only about $9.xx, so still time to sell the remaining 600.


This too will pass. Too much fretting about not much at all.


----------



## Eder

john.cray said:


> Are you thinking of adding some more to your position?



I will wet my beak next week at the earliest.

I just wanted to add that IPL oil storage may get a better price & be easier to sell after the drop in oil prices....everyone will want to store at todays prices most likely.


----------



## agent99

AltaRed said:


> This too will pass. Too much fretting about not much at all.


You seem very sure about that? This is no stock to hold in a retirement portfolio. I have done very well out of it. But now I am done with it (mostly!)


----------



## robfordlives

Eder said:


> I will wet my beak next week at the earliest.
> 
> I just wanted to add that IPL oil storage may get a better price & be easier to sell after the drop in oil prices....everyone will want to store at todays prices most likely.


But I think their storage capabilities are maxed out....in any event they are actively looking to sell their Euro storage business to finance their plastics plant.....right before the Federal gov't will cripple that market with ban on single use plastics. then add on top of that management rejecting a buyout offer in the thirties and their CEO certainly shout no longer be employed


----------



## Eder

It's fine that you don't like IPL even at $12 and likely it will get cheaper, but since you posted in an IPL thread you should at least find out what polypropylene production is used for.


----------



## agent99

Here we go: https://totebagfactory.com/blogs/news/common-uses-of-polypropylene

Quite a few single or minimal use products.


----------



## AltaRed

Eder said:


> It's fine that you don't like IPL even at $12 and likely it will get cheaper, but since you posted in an IPL thread you should at least find out what their polypropylene production will be used for.


Ah well, it goes to show what shooting from the hip does to the credibility of the overall post.

@Agent99: There is no question that IPL is somewhat of a speculative stock, one that I would not normally hold. But with the dividend paying me to wait for the 2 bagger that could occur with the completion of TMX (higher oilsands transportation and Bow River transportation) systems and the cash flow from the Heartland complex, it has been a calculated risk I am prepared to take. It may not pay off if IPL runs into funding problems and there is risk of a double whammy in that regard, i.e. failure to sell their European storage business and a steep decline in NGL processing revenue. 

The biggest risk to existing shareholders would be the need for a secondary equity offering diluting existing shareholders but they insist they have more than enough credit capacity to pull it off. Given their current D/E ratio of around 1.6 is no worse than the big pipes, it is hard to argue against their thesis. Still, if a $30 offer came along before the end of 2021, I'd take it.

Your graphic is highly misleading. Almost none of the single use plastics are PP. The link itself does appropriate justice to the common uses of PP.


----------



## Eder

agent99 said:


> Here we go: https://totebagfactory.com/blogs/news/common-uses-of-polypropylene
> 
> Quite a few single or minimal use products.


Are you seriously using a site called "the tote bag factory" to evaluate a business?
Are you aware of the characteristic of polypropylene that make it environmentally friendly unlike most other forms of plastic?

OK I'm out ....beginning to sound like a Trump thread lol.


----------



## AltaRed

Eder said:


> Are you seriously using a site called "the tote bag factory" to evaluate a business?
> Are you aware of the characteristic of polypropylene that make it environmentally friendly unlike most other forms of plastic?
> 
> OK I'm out ....beginning to sound like a Trump thread lol.


It is poster bias happening again. I worked for a company with a major petro-chemical division. PP is where the action is at and will remain. That is why PPL and IPL are actually doing what they are doing. There is plenty of analysis out there on the PP market specifically.


----------



## agent99

> Are you seriously using a site called "the tote bag factory" to evaluate a business?
> Are you aware of the characteristic of polypropylene that make it environmentally friendly unlike most other forms of plastic?


After a lifetime in the petrochemical/plastics business, I may not be up to date, but I do know a little. 
Which parts of the link did you find inaccurate? I thought it illustrated that polypropylene was used for many single or minimum use products.
Some here like alta seem to have fallen in love with ipl
I consider it a fallen angel. But dont listen to me, listen to alta - he is never wrong 😉


----------



## AltaRed

I simply indicated the graphic did nothing to properly represent use of PP while the contents of the link you posted painted a more appropriate picture. You simply chose to show bias with the useless graphic.

P.S. I am well aware you have posted in the past about your career in the petro-chemical business. So it would be more responsible to present more balanced facts

Added: Here is a report example worth reading. https://www.fortunebusinessinsights.com/industry-reports/polypropylene-pp-market-101583


----------



## doctrine

IPL isn't fully funded yet for their new plant. They either need to raise capital, or sell those storage assets. Without a plan, the stock price may sell just because investors may feel they will be issuing shares to make it happen. And potentially declining oil volumes and/or crashing NGL spreads will not make it any easier. So, the risk is potentially justified, and a lower share price only makes it more difficult. They just need a firm plan to get them through the next 2-3 years based on the new reality and if it looks good, investors will get back in.


----------



## AltaRed

As I understand it, they do have credit facility coverage assuming the storage business can be sold, but I otherwise agree. COVID-19 going through Europe and reduced demand for hydrocarbons is not going to make the storage business easy to sell.


----------



## OptsyEagle

AltaRed said:


> I simply indicated the graphic did nothing to properly represent use of PP while the contents of the link you posted painted a more appropriate picture. You simply chose to show bias with the useless graphic.
> 
> P.S. I am well aware you have posted in the past about your career in the petro-chemical business. So it would be more responsible to present more balanced facts
> 
> Added: Here is a report example worth reading. https://www.fortunebusinessinsights.com/industry-reports/polypropylene-pp-market-101583


In that link, about 40% down, they show Global PP Market Share for 2018. Packaging appears to make up almost 40%. Not that I think it is all going to go away but if it did, it does seem to me that it could disrupt the industry quite a bit. Obviously the higher cost producers would feel it first and eventually disappear but while the disruption was going on, it would not be all that fun for any of the participants. 

Assuming the disruption of those products becomes higher then the growth of all the rest, which I do not actually believe.


----------



## agent99

AltaRed said:


> I simply indicated the graphic did nothing to properly represent use of PP while the contents of the link you posted painted a more appropriate picture. You simply chose to show bias with the useless graphic.


You must have chosen to not read the link first and jumped on the graphic which was apropos because it showed an example of one single use of PP.


----------



## AltaRed

agent99 said:


> You must have chosen to not read the link first and jumped on the graphic which was apropos because it showed an example of one single use of PP.


As you intended the graphic to be front and center. You know better.


----------



## Eder

The use of polypropylene for packaging should increase replacing PP and PVC due to its ability to be easily recycled. Packaging is actually good for the environment when it comes to the global supply chain. Less total shipping packaging, less CO2, less energy used, food lasts longer so less waste...etc etc.

At any rate these facts do not make IPL a buy or a sell...


----------



## AltaRed

Think you mean PP replacing PE but I agree that is not overly relevant to IPL with multiple revenue streams. Products made from both PE and PP are well understood.


----------



## cainvest

Wonder if it will drop below $10 ... dividend yield is already over 12%, yikes!


----------



## robfordlives

cainvest said:


> Wonder if it will drop below $10 ... dividend yield is already over 12%, yikes!


There is no way it won't be cut - some of the cuts from companies so far have simply cited "uncertainty in global markets due to COVID-19". These guys desperately need cash


----------



## cainvest

I don't doubt it'll be cut, traded as low as 8.69 today ...


----------



## AltaRed

My 'new' view is there will be a cut as well. While they were covering their dividend with COS and fee based revenues, primarily via their oil transportation systems, some of their shippers are no doubt going to default on paying their tolls and may well cease production altogether. I've always seen the commodity side of IPL's and PPL's business as the soft underbelly, but clearly their pipeline business will now have some vulnerabilities if the likes of BTE, etc. cease to produce or go insolvent.


----------



## cainvest

Even if (unlikely) the Saudi's stopped the price war tomorrow I think the damage has been done. Probably some tough times ahead for all oil related stocks, especially those without deep pockets.


----------



## fireseeker

AltaRed said:


> My 'new' view is there will be a cut as well. While they were covering their dividend with COS and fee based revenues, primarily via their oil transportation systems, some of their shippers are no doubt going to default on paying their tolls and may well cease production altogether. I've always seen the commodity side of IPL's and PPL's business as the soft underbelly, but clearly their pipeline business will now have some vulnerabilities if the likes of BTE, etc. cease to produce or go insolvent.


AR, in this scenario would other shippers step up to absorb the extra capacity -- and pay for it?


----------



## AltaRed

Pipelines generally are open access so anyone can contract for available space. The question is whether there is (was) enough oil production backed up when there was no surplus capacity pre-crisis, to now fill what will become available capacity. I tend to doubt it since I have not heard of any shipping limitations on the IPL an PPL systems....only limitations on takeaway capacity ex-Alberta. My take is toll revenue will decrease on both IPL and PPL as producers let production fall, or have negative margin on some of their volumes. No idea how much this might be.


----------



## sags

cainvest said:


> Even if (unlikely) the Saudi's stopped the price war tomorrow I think the damage has been done. Probably some tough times ahead for all oil related stocks, especially those without deep pockets.


The Saudis are renting super tankers to send to Texas and Louisiana. They are opening the taps even more to crush the US shale producers.

With friends like the Saudis, the Americans don't need any enemies.

https://www.ft.com/content/a9bc92b2-639b-11ea-a6cd-df28cc3c6a68


----------



## robfordlives

Disastrous for IPL....perhaps part of why it's tanked. Wonder if Li Ka Shing is still interested lol. Oh well another company destroyed by the Liberals

https://www.theglobeandmail.com/can.../+Media&utm_campaign=Shared+Web+Article+Links


----------



## Eder

I didn't know IPL made single use plastics...can you elaborate?


----------



## robfordlives

They don't and will not with the new plant but the Federal gov't has just labelled their future products as toxic. It's OK I'm a nobody, but this was obviously concerning for the Chemical Producers Association and companies therein which IPL is trying to transform into (very unsuccesfully at this point if it's not obvious)


----------



## Eder

So IPL's future products will be single use plastic? They have misled investors from the start. Particularly where they stated 70% of production will be take or pay recyclable polypropylene pellets exported to the USA , not turned into water bottles in Canada...could be class action upcoming.


----------



## doctrine

Don't get carried away here. The demand for their products is real. That's not the problem, even if it may be labelled as toxic or not. The problem is they may need to issue shares or stop the dividend to complete production. You have to get to the finish line. And that means the share price is going to drop on that risk. Share drop has nothing to do with the government.


----------



## agent99

Eder said:


> So IPL's future products will be single use plastic? They have misled investors from the start. Particularly where they stated 70% of production will be take or pay recyclable polypropylene pellets exported to the USA , not turned into water bottles in Canada...could be class action upcoming.


We have already had this discussion. 

PP IS used for single use plastic products. Sure, they _could_ be recycled IF separated, but will they be? 
Things like food containers, plastic cups etc etc. 
Especially in USA, this is unlikely to happen, and IPL have no control over that.
Where we are in USA, NOTHING gets recycled. Everything goes in the garbage. 

Before current crash, I had little confidence that IPL could pull off the Heartland project in a way that will benefit shareholders. Now, the chance of that happening are even lower. 

I hope people listen to you and others here who think IPL might still be successful. I would love to see stock price recover so I can sell my remaining shares  I may do that anyway.


----------



## Eder

I'm no cheer leader...just like to point out any BS I see in case others get misled. I own some shares and may add or sell in the future.


----------



## AltaRed

I am not worried about IPL's PP plant from a plastics market perspective. IPL will be a process provider under contract for those supplying the propane as feedstock. They don't have direct exposure to the commodity itself. It is entirely possible utilization may ultimately fall below 100% due to falling prices in the PP market, but there is a lot of margin to play with given the surplus of propane in the AB market, supposedly even after IPL's and PPL's petro-chemical facilities and the Ripley propane export terminal.

The main risk I see on the petro-chemical side is a botched/complicated commissioning and start up phase taking longer than it should to get cash flow going. That said, IPL said in February there is apparently little to no cost or schedule risk given current status of the project and nature of the EPC contracts.

A bigger risk is completion of the financing amid declining NGL processing revenue, and now a potential decrease in oil pipeline shipping tolls due to shipper (producer) corporate defaults. I suspect the dividend may well get cut if both of those things decline enough.


----------



## doctrine

I would suspect a 50% dividend cut is in the works, and that it is not likely to get back to that level for a very long time.


----------



## protomok

IPL currently sub $10, incredible.


----------



## AltaRed

doctrine said:


> I would suspect a 50% dividend cut is in the works, and that it is not likely to get back to that level for a very long time.


I came to the same conclusion and did a swap for PPL to remain in that general space.


----------



## OptsyEagle

Just out. Inter Pipeline Reiterates Confidence in Their Underlying Business

https://finance.yahoo.com/news/inter-pipeline-reiterates-confidence-underlying-130000903.html


----------



## londoncalling

I didn't take the time to read the link but hope to get round to it when I have a moment. This type of news release used to give me comfort when I was a novice(still am so perhaps new is a better word) investor. In recent years it gives me concern as most often it's just a matter of time before we hear more bad news.

Edit: disclosure, been a long term holder of IPL. (along with many others that years ago seemed to have their stuff together. CHE as an example) that recently stumbled. When I say stumbled I am not talking about coronavirus. I am referring to taking misteps as a company.

Cheers


----------



## AltaRed

I read it, given my very recent exit from the stock, and it serves to re-assure, much like PPL's news release too. The part I am not convinced about is the strength of the counterparties, letters of credit, etc. I fully expect some of IPL's shippers to cut back on production due to negative cash flow margins and/or to go insolvent. At some level, some of those counterparties, letters of credit, etc are likely going to fail. If it is only a 10% hit, IPL can probably still, but barely, cover the dividend. A considerably larger loss in their COS and fee based revenue....and they will have no choice but to cut the dividend. 

I have no idea where that crossover point is and decided not to stick around to find out.


----------



## cainvest

AltaRed said:


> I read it, given my very recent exit from the stock, and it serves to re-assure, much like PPL's news release too. The part I am not convinced about is the strength of the counterparties, letters of credit, etc. I fully expect some of IPL's shippers to cut back on production due to negative cash flow margins and/or to go insolvent. At some level, some of those counterparties, letters of credit, etc are likely going to fail. If it is only a 10% hit, IPL can probably still, but barely, cover the dividend. A considerably larger loss in their COS and fee based revenue....and they will have no choice but to cut the dividend.
> 
> I have no idea where that crossover point is and decided not to stick around to find out.


An interesting position for them right now, I'm still watching from the sidelines. If they cut the dividend it'll likely cause a sell off but if they don't and revenues decrease ....

The big play right now is the price war with oil so if that resolves soon it'll certainly help them.


----------



## agent99

I tried to sell my remaining ipl at 9.50, but no buyers. Now down another $3.00? 25% yield?
Mind you, PPL isn't doing any better is it? Haven't looked today. Have a small amount in wife's TSA. Whole space is not good to be in.


----------



## OptsyEagle

agent99 said:


> I tried to sell my remaining ipl at 9.50, but no buyers. Now down another $3.00? 25% yield?
> Mind you, PPL isn't doing any better is it? Haven't looked today. Have a small amount in wife's TSA. Whole space is not good to be in.


At these prices I would imagine the company has pretty much discounted a dividend cut, a write off of the plastics plant, the entire 20% non contracted business gone, 3 First Nations boycotts, a fire in 2 to 3 processing plants and perhaps an accounting scandal or at least sexual misconduct by the CEO.


----------



## PabloPenguino

I'm sure a dividend cut is already priced into the share price.

At this point I'm not selling. I'm not buying more either - too many other good names on sale. I'll just hold and keep DRIPing and see where things go.


----------



## peterk

PabloPenguino said:


> I'm sure a dividend cut is already priced into the share price.


There's a good chance you're right. However those _are_ pretty famous last words...


----------



## doctrine

IPL should be priced like the PPL plant will be delayed for a year, and that pipeline volumes will drop significantly and potentially even under a curtailment order, and that many of their customers will go bankrupt. 

It also has to be priced on enterprise value, not just share capital. They have a pile of debt that hasn't disappeared; enterprise value does not drop like market capitalization.


----------



## protomok

^ Regarding the assumption that many customers will go bankrupt I'm not quite convinced.

If we consider the Oil Sands Transportation buisness the revenue is 100% Cost Of Service with 20+ year contracts with 12 customers.

9/12 counterparties are listed here: http://www.interpipeline.com/files/...sportation_-_Fact_Sheet_-_Q4_2019_-_FINAL.pdf -

CNQ, BP, Imperial, Chevron, CNOOQ, Shell, Cenovus, Husky, Exxon

Do these seem like the kind of companies that will go bankrupt? Even if the 3 unknown counterparties are at risk of bankruptcy it seems far more likely they'll be taken over.

No doubt IPL has some commodity and volume risk but unless I'm missing something their COS revenue seems pretty solid despite the dire WCS and WTI pricing.


----------



## AltaRed

The likes of PPL and IPL have potentially hundreds on shippers on their systems, albeit the major part of their business are the big oil sands players. I doubt many on the Bow River system are stellar. Similarly on PPL's Peace Pipe system. I am not suggesting there is a major impact, but a 10% impact might be theoretically plausible on COS revenue. The tighter the dividend stream depends on COS and fee based revenue, the higher the risk of a dividend cut. They will see a cut in NGL processing revenue too. Lower demand for diluent as well as lower prices. IOW, there are some revenue risks beyond that stated in press releases, but rightfully speculative at the current time

I don't think shareholders were putting much share value on any of the more distant projects from either company even pre-crash.


----------



## OptsyEagle

You have to keep in mind that when IPL was priced at $22, there was a tremendous amount of pessimism priced into its share price. At $7 it is simply indiscriminate selling.

Since it is not alone in this regard, I would not expect a quick rebound but when it does it should be quite lucrative.


----------



## AltaRed

OptsyEagle said:


> You have to keep in mind that when IPL was priced at $22, there was a tremendous amount of pessimism priced into its share price. At $7 it is simply indiscriminate selling.
> 
> Since it is not alone in this regard, I would not expect a quick rebound but when it does it should be quite lucrative.


FWIW, I agree. $22 pricing was still attractively priced. All of IPL, PPL, KEY and GEI will see significant rebounds since the crash has been indiscriminate across companies and sectors. It is just going to take awhile, perhaps through the end of the year before the economy overall really starts to rebound.


----------



## nobleea

Up 100% in 6 days. Crazy.


----------



## agent99

I am just happy to be totally out of IPL and Pembina. Too risky for the times we are in. So far, I have used part of the proceeds to buy 4 GICs . (1,3,4,5yrs) ! 1,2,3,4,5 yr all have about same yield on BMOIL 2.4-2.5%! Overall, I made some money selling those (based on purchase prices), so OK to just collect interest. Rest in cash for now.


----------



## doctrine

Going to be tough to be in a pipeline if the tanks are full everywhere and there is no where left to pump anything, and some of your customers start claiming either bankruptcy or at best force majure. May be short lived but I would rather see IPL in survival mode; cancel dividend, secure liquidity, etc. It can be reinstated when everything improved. They aren't getting credit for the 18% yield in any case.


----------



## peterk

Bought a bit more @ $7.70. We'll see...


----------



## Eder

Their tank business most likely is full and perhaps worth more today than last month. They shouldn't have a hard time selling it. Will be an interesting quarterly report coming up lol.


----------



## AltaRed

Not sure it makes any difference to their revenue stream. Don't know for sure how their tariff is set up but I'd think tankage is part of it. In any event, it obviously is an important component of trying to moderate receipts of oil from production with lower shipping volumes due to decreased demand. The oil doesn't belong to them anyway.


----------



## agent99

> Western Canada Select, BMO noted, fell below $7 to a record low once again today. And there were reports that Canadian production will be cut back as storage rapidly approaches capacity.


----------



## protomok

This is truly a horrible situation for oil producers right now. I was looking at the Flanagan South tolls to send heavy oil from Edmonton to Texas, it's $6 - $10 USD / barrel which is > WCS - currently $6.45 USD / barrel!

Source:
https://www.enbridge.com/~/media/Enb/Documents/Tariffs/2019/CDMN%20CER%20462%20FERC%203200%20FSP%20LKH.pdf - see page 5.


----------



## AltaRed

As one would expect. The pipelines will not be full in a week or so. Hence why I speculated that COS and fee revenue to cover the dividend may not be as secure as I thought just.a month ago. Some of those 'firm' shipping contracts won't be paying their bills if they go insolvent.


----------



## cainvest

They just cut their dividend by 72% and suspended DRIP.


----------



## PabloPenguino

I'm not surprised by the dividend cut but I'm wondering why they suspended DRIP. Continuing with the DRIP program would allow the company to preserve more cash.


----------



## agent99

PPL doing just as badly, if not worse. Down about 1/3 in 3 days. Not a good time for AB pipelines


----------



## gardner

They also divulged that they have been seeking to sell off a share of the chemical business. They don't say to whom or what proportion. On the plus side, they are NOT moving forward with flogging off their storage business, at least for now. And storage is a big revenue centre this season.

Inter Pipeline Announces Reduction to Monthly Cash Dividend, Suspension of Dividend Reinvestment Plan and Business Update - Inter Pipeline


----------



## AMABILE

should i sell - replace it with ENB ?


----------



## Synergy

Sure glad I stuck with XEG. Very tempting here, especially now with the dividend cut.


----------



## dmehus

PabloPenguino said:


> I'm not surprised by the dividend cut but I'm wondering why they suspended DRIP. Continuing with the DRIP program would allow the company to preserve more cash.


This is my first post on here, and I hope to post on here more often and am comforted that @AltaRed is fairly active on here. I am also loving the new forum software. Nothing beats open source software for forum software.

Anyway, to answer your question, @PabloPenguino, yes paying the dividends out in shares conserves cash; however, I suspect there are two reasons why they suspended the DRIP. DRIPs are typically accompanied by a discount to the prevailing market value, for which the shares are already heavily discounted. At the same time, if they're issuing the shares, either from treasury that they've yet to cancel or which they've printed through an expansion of the share count, they're doing so at depressed values. So, what I do when companies cancel their DRIPs, or don't offer DRIPs, is just to enroll the shares in a broker-sponsored DPP. The shares are bought on the secondary market and, if more people did this, this would provide a natural cushion of support, particularly around dividend payment dates.

Cheers,
Doug


----------



## AltaRed

Your second point is not one I see discussed very often, indeed, hardly ever discussed in stock forums. Doling out under-valued shares in a DRIP is really no different than going to the market with a secondary offering at depressed share prices, diluting existing shareholders. Personally, I am wary of any DRIP program that is NOT funded by share buybacks to avoid share creep, unless of course stock price is way over-bought. Death by a thousand cuts.


----------



## dmehus

AltaRed said:


> Your second point is not one I see discussed very often, indeed, hardly ever discussed in stock forums. Doling out under-valued shares in a DRIP is really no different than going to the market with a secondary offering at depressed share prices, diluting existing shareholders. Personally, I am wary of any DRIP program that is NOT funded by share buybacks to avoid share creep, unless of course stock price is way over-bought. Death by a thousand cuts.


Thanks for the reply, @AltaRed. Interesting perspective. I actually don't like normal course issuer bids that merely back shares that are little more than those granted as part of executive and employee stock-based compensation schemes, as they mask the true cost of management by masking the dilutive effect of the share issuances. I do, however, like significant issuer bids, as Home Capital Group (HCG.TO) did in recent years, buying up 28 million of their previous 80 million shares. They've now bought up about 10% more shares than the extra shares they issued to Berkshire Hathaway's Columbia Insurance Company, which has now completely exited the company. I also like Mainstreet Equity (MEQ) a lot, but am waiting to see if I can grab them below < $40.00.

Cheers,
Doug


----------



## P_I

dmehus said:


> This is my first post on here, and I hope to post on here more often and am comforted that @AltaRed is fairly active on here. I am also loving the new forum software. Nothing beats open source software for forum software.


Welcome to the CMF community. Not to take the discussion off-topic, but the forum software, Buy XenForo, isn't open source.


----------



## dmehus

P_I said:


> Welcome to the CMF community. Not to take the discussion off-topic, but the forum software, Buy XenForo, isn't open source.


@P_I Oh, sorry, I thought this was Discourse. It's a nice forum software nonetheless, much better than Simple:ress, which I loathe.


----------



## dmehus

"This message is awaiting moderator approval, and is invisible to normal visitors."

Well, that's weird. Before my posts weren't moderated, but now they are. Please change this.

Cheers,
Doug


----------



## MrMatt

I don't get the point on DRIPs, how are they in the best interest of the company or shareholders.
1.. If discounted, they're literally selling my company at a discount, not cool.
2. If the company has an ongoing need for capital, but they also have good steady earnings they can get both types of investors.
3. If they buyback, I kind of don't get the point, it's a lot of paperwork for no net gain. At least it's consolidating the holding.


----------



## AltaRed

Buying back shares does make sense when the shares are considerably undervalued because they disproportionately increase shareholder value per share of remaining shares for a variety of metrics including EPS, P/E, etc.. It can be an excellent use of capital in the absence of the risked IRR of an investment opportunity. It makes no sense when share prices reflect intrinsic value of the company..

As a shareholder, I love it when float is reduced at a very cheap price, especially if they would otherwise blow it on some marginal growth opportunity.


----------



## dmehus

AltaRed said:


> Buying back shares does make sense when the shares are considerably undervalued because they disproportionately increase shareholder value per share of remaining shares for a variety of metrics including EPS, P/E, etc.. It can be an excellent use of capital in the absence of the risked IRR of an investment opportunity. It makes no sense when share prices reflect intrinsic value of the company..
> 
> As a shareholder, I love it when float is reduced at a very cheap price, especially if they would otherwise blow it on some marginal growth opportunity.


But that _rarely_ happens, @AltaRed. NCIBs often just barely cover the shares issued for tuck-in acquisitions or executive and employee compensation schemes. Mainstreet Equity (MEQ.TO) is one of those exceptions where the cumulative effect of their NCIBs has been to reduce the outstanding share count.


----------



## agent99

Just so glad I got out of this one early. As posted several times earlier in this thread, I felt IPL was headed for trouble before Covid made things even worse. Seems like the analysts are just catching on. In summary - Higher than expected cost overruns on PP. Start up date extended and uncertain. No partner yet for equity funding.

*



TPH Downgrades Inter Pipeline to Sell Following Q1 Earnings Release

Click to expand...

*


> TPH Downgrades Inter Pipeline to Sell Following Q1 Earnings Release
> 
> 05/08/2020 (MT Newswires) -- Tudor, Pickering & Holt on Friday downgraded its rating on the share of Inter Pipeline (IPL.TO) to sell from hold and cut its target price to C$9.00 from C$10.00 after the midstream energy company reported first-quarter earning that met expectations but included a 14% rise in the cost of a new Alberta petrochemical plant.
> Negative. Inter Pipeline underperformed by 6% (vs AMNA) yesterday despite printing in-line Q1 EBITDA of C$255M due to steady Oil Sands contributions and higher Bulk Liquids utilization offsetting weaker NGL processing margins," the investment bank said in a note. " ... Announced PDH/PP capex inflation of 14% to C$4.0B exceeded our estimate (5-10%) with C$150M earmarked for COVID-19 related impacts. In-service was delayed until early 2022, though no certainty provided as mitigation plans are underway to address the pandemic-related impacts. Remaining 2020 capex (growth + sustaining) now C$825M pushing total to $1,142M, which sits just below company's C$60-120M estimated reduction from $1,195M. No incremental updates provided on equity funding levers with the process to secure a partner ongoing and the divestiture of Bulk Liquids still postponed with no certainty of restart. Remaining preferred funding options include rebounding commodity-exposed margins and utilizing available revolve r capacity ... With significant funding concerns being addressed by uncertain initiatives (petchem partner, Bulk Liquids sale) we believe alternative balance sheet actions may be required (further dividend reduction or asset sales). Given macro, funding and in-service uncertainties we are downgrading the stock to Sell with a C$9 PT."


----------



## dubmac

Andrew Willis suggests that IPL is a takeover target
"Calgary-based Inter Pipeline is now a $4.7-billion company, after its stock sold off sharply in March on the downturn in the energy industry and concerns over the $3.5-billion price tag on a planned petrochemical refinery. On Friday, Inter Pipeline’s stock price jumped by 4 per cent on an otherwise lacklustre trading session on the Toronto Stock Exchange. Cue the _Jaws_ theme music. Sharks are circling."


----------



## Money172375

Out of curiosity, what are the tax implications in a non-reg account for companies that are bought out? I assume if cash is paid, you stock is deemed sold. What happens if
you just receive shares in the acquiring company? Re-calculate ACB or are you still deemed to have sold the acquired company?


----------



## AltaRed

Money172375 said:


> Out of curiosity, what are the tax implications in a non-reg account for companies that are bought out? I assume if cash is paid, you stock is deemed sold. What happens if
> you just receive shares in the acquiring company? Re-calculate ACB or are you still deemed to have sold the acquired company?


If you receive cash, the postion has been sold and you have a cap gain/loss based on the cash received as selling price. In a stock acquisition, it is usually done so that one's current ACB rolls over into the new stock. It gets a bit more complicated when it is a combination cash and stock deal.


----------



## gardner

AltaRed said:


> In a stock acquisition, it is usually done so that one's current ACB rolls over into the new stock.


Sometimes you can elect whether to make the rollover a taxable event or not. Depending on the corporate structure of the buyer and seller (eg a corp buys a partnership) it may have to be a taxable CG event.


----------



## Eclectic12

Money172375 said:


> Out of curiosity, what are the tax implications in a non-reg account for companies that are bought out? I assume if cash is paid, you stock is deemed sold.
> 
> What happens if you just receive shares in the acquiring company? Re-calculate ACB or are you still deemed to have sold the acquired company?


YMMV where the buyout papers usually outline the options.

Where it was a swap of old company stock for new company stock at some ratio, what I have had has been:
1) everything is deemed to be sold with a pre-determined ACB for the new stock.

2) my choice by a deadline with everything either deemed sold or a tax deferred rollover, where the new stock assumed the ACB from the old stock.

3) cash and stock were paid where the percentage cash was deemed sold and my choice for stock portion.

4) everything was a tax deferred rollover.


There maybe some other flavour at a future time but that's what has happened for me.


Cheers


----------



## Eclectic12

gardner said:


> Sometimes you can elect whether to make the rollover a taxable event or not. Depending on the corporate structure of the buyer and seller (eg a corp buys a partnership) it may have to be a taxable CG event.


That's where I have been burned in the past, not staying on top of the letters sent. By the time I read the letter to know I had a choice, the deadline had passed where the default action was a deemed disposition. 

I've learned to pay more attention and where there is a proposed or in progress buyout, look for notices more proactively.


Cheers


----------



## londoncalling

'An absolute boom' for Alberta: Is plastic fantastic again in the age of coronavirus?



Although we have seen decreased emissions due to the pandemic the increased use of plastics is not good for the environment. A sustained long term increase on plastics would be welcome news for IPL but will the demand be there when IPL commissions it's project?


----------



## Eder

I'm more worried they get taken over before we can find out.


----------



## londoncalling

That would definitely be a more immediate concern. I have resigned myself to the fact that a takeover of IPL is probable. I will likely see a loss should that happen. My hope is that there is a significant premium over current (but that may not happen) or the acquirer can execute medium to long term.


----------



## agent99

londoncalling said:


> 'An absolute boom' for Alberta: Is plastic fantastic again in the age of coronavirus?
> 
> 
> 
> Although we have seen decreased emissions due to the pandemic the increased use of plastics is not good for the environment. A sustained long term increase on plastics would be welcome news for IPL but will the demand be there when IPL commissions it's project?


The low cost packaging plastics the article referred to at beginning were polyethylene as made by Nova and Dow. Polypropylene finds different uses. Only some of them packaging. IPL likely has bigger problems than markets for plastics. Don't know about PPL.


----------



## AltaRed

agent99 said:


> The low cost packaging plastics the article referred to at beginning were polyethylene as made by Nova and Dow. Polypropylene finds different uses. Only some of them packaging. IPL likely has bigger problems than markets for plastics. Don't know about PPL.


Pembina's plant is also polypropylene which is where the growth market is. Dow and Nova got into polyethylene partly because of the abundance of ethane in AB at the time. Now it is propane that is in abundance and that fits nicely with the growth market in polypropylene. Propane has had distressed pricing for some time due to the excessive surplus and this makes the cost of supply so cheap for these new plants. 

Propane is so much in surplus that it made sense for AltaGas to build a propane export terminal on Ridley Island at Prince Rupert, now in operation. Pembina is building one too, albeit slightly smaller in scope.


----------



## Dilbert

Looks like they have found a buyer for most of the European storage facilities.


----------



## robfordlives

Didn't they just buy those assets a couple of years ago?


----------



## AltaRed

Yes, but they need the capital to fund their petro-chemical project. That is the problem when models showing ever increasing cash flows into the future flame out. I always thought their cash flow models were at risk optimistic (both pipeline throughput growth and NGL margins). Neither has worked out as planned since the 2018? acquisition.


----------



## Eder

I never did like the idea of IPL buying assets off of the continent...pretty happy they were able to dump some of it without losing too much. They need to stick to Canada.


----------



## doctrine

I believe they sold these assets at a slight premium at 10 times EBITDA - they bought at least a portion of them at 7-9 times EBITDA so it must have been close to or maybe a little higher than book value. I am also not sure it makes sense for them to own these assets. That cash will go a long way to ensuring they can self-fund the construction. I would not be surprised to see them eventually sell a chunk of Heartland to a partner as well.


----------



## Eder

Apparently the sale proceeds will meet IPL's cash requirements till end of 2021...lets hope they come out the other end of this lol...I hate hanging onto a company that is struggling...not sure if IPL is yet.


----------



## OptsyEagle

Just keep reminding yourself that when it comes to pipelines, they are not making anymore of them, and just as importantly, they never build a competitive one side by side an existing one.


----------



## londoncalling

the stock is down 5% today. It should be noted that many stocks were down.


----------



## Afp

Own it for over 10 years, way before it became IPL (was IPL.UN), added more several times, never sold a single share, at one point it was a x4 baggers position but now sitting on a huge loss.

You can't win all the time. I hope my next 10 years of holding IPL will be better than previous one.


----------



## dubmac

We are in the process of "changing" financial advisers - the adviser managed the account of a close relative (>90 yrs) financial account. She collects a significant amount of income from dividends. 
The adviser purchased a large amount of IPL last year. After the big drop in March, she lost upwards of 80% of the investment - at this point in time, she is still down 45% or so. She lost well over 5 figures on IPL.


----------



## AltaRed

dubmac said:


> We are in the process of "changing" financial advisers - the adviser managed the account of a close relative (>90 yrs) financial account. She collects a significant amount of income from dividends.
> The adviser purchased a large amount of IPL last year. After the big drop in March, she lost upwards of 80% of the investment - at this point in time, she is still down 45% or so. She lost well over 5 figures on IPL.


That advisor clearly had not done the analysis to see that IPL was threading the needle on cash flow with respect to capital funding AND paying the dividend, nor that sources of cash flow such as NGL processing income had some risk to it. Professionals, or at least the professional's team, should have been able to see that and not get smitten by yield. The reach for yield clouds judgement.


----------



## dubmac

He didn't make one error in the management of her assets. He made several. 
He tried to set and forget the account - and collect his fee. He assembled a "lazy, high yield portfolio" of risky high yield stocks, and preferreds where he would buy and let the dividend and distributions arrive & as long as there was no drop, then there would be no complaints...but then March 2020 came. In retrospect his judgment and analysis were abysmal. I was aware and registered concerns 2 then 1 year ago - but I was not in a position to change the relationship. 
This was one of the bigger screw-ups.
anyhoo...he's out. 
(Given the guy's age, I don;t think he really cares anymore. He's a salesman and when held to account for the performance and reflect on his performance, he flips the conversation to sales..rather than due diligence. Classic scam artist)


----------



## AltaRed

Too many of those clowns around for sure. They get fat, dumb and lazy if they are not also sharpening their teeth to extract even more fees out of a portfolio. Way too many stories of that kind of FA which gives the industry a bad name. 

Still, it is a lesson for everyone, including DIYers. High yield portfolios are NOT buy and hold because at least some of the holdings will implode over time.


----------



## Eder

These things will happen again the next time the TSX drops 35%...its like building on a flood plain...sooner or later you'll get wet. My current holdings in IPL are still a bit underwater not including dividends but I did manage to sell half my holding in the 30's before the crisis so not complaining.


----------



## londoncalling

Afp said:


> Own it for over 10 years, way before it became IPL (was IPL.UN), added more several times, never sold a single share, at one point it was a x4 baggers position but now sitting on a huge loss.
> 
> You can't win all the time. I hope my next 10 years of holding IPL will be better than previous one.


This information must not include distributions. I have held IPL since 2012. My annual return including distributions is 6%. In today's interest rate environment I am content with that kind of return. It is true the share price was in the high 30s in 2014 and even in the mid 20s a year ago. Hindsight indicates I should have sold half(or more) in 2014. However, I have 15-20 more years of accumulation. Will it ever return to the high 30s? Maybe not. I had also considered adding recently(upthread). I think we won't see much upside movement in the couple years but I look forward to coming back in a decade to see how we fared.


----------



## doctrine

I like IPL, but it has not been the best investment. I sold all my shares in Feb at $19 at a capital loss but overall slight gain (maybe 1-2% annual) due to 3-4 years of dividends. However, I have bought back in at $11 and now have 80% more shares. If it returns to even the mid-$20s, which I think is possible in 2022-2023, then it will be a very good investment. Certainly, I like the risk/reward profile in the $10s. I also like that they are not beholden to the large dividend given the 72% cut and are now fully funded even with the cost increases, and it is certainly possible that it gets back to its previous dividend level, or even higher, given conservative estimates of potential future cash flows once Heartland is running.


----------



## Eder

The Heartland project will be a game changer.


----------



## AltaRed

Eder said:


> The Heartland project will be a game changer.


It will indeed once it comes online. Looks like 2022 at higher cost rather than late 2021 now due to covid-19 impacts on schedule. It will generate considerable cash flow but IPL will then have to use a lot of that cash to pay down debt. None the less, stock price will get a boost at that time.

FWIW, I jumped off the IPL horse early this year to ride the PPL horse instead. I got quite uncomfortable with IPL's cash flow forecasts relative to Heartland project capital needs..


----------



## Eder

It would not surprise me if your PPL shares resulted in you owning a piece of Heartland.


----------



## AltaRed

Eder said:


> It would not surprise me if your PPL shares resulted in you owning a piece of Heartland.


Perhaps but only if their own project with Kuwait (Canada Kuwait Petrochemical Limited Partnership's ("CKPC") PDH/PP Facility) is permanently shelved. I imagine there are some significant sunk costs there.


----------



## Borat

Inter Pipeline to acquire Milk River pipeline in swap deal with Plains - BNN Bloomberg


Inter Pipeline Ltd. has signed a deal to acquire the Milk River pipeline system from a subsidiary of Plains All American Pipeline LP, in exchange for its 100 per cent ownership interest in the Empress II and 50 per cent ownership interest in the Empress V straddle plants.




www.bnnbloomberg.ca





News today about IPL


----------



## doctrine

AltaRed said:


> It will indeed once it comes online. Looks like 2022 at higher cost rather than late 2021 now due to covid-19 impacts on schedule. It will generate considerable cash flow but IPL will then have to use a lot of that cash to pay down debt. None the less, stock price will get a boost at that time.
> 
> FWIW, I jumped off the IPL horse early this year to ride the PPL horse instead. I got quite uncomfortable with IPL's cash flow forecasts relative to Heartland project capital needs..


PPL has caught my eye recently with its slip below $30. I'll definitely be keeping my eye on it. If IPL was higher, I would consider a switch.


----------



## Afp

londoncalling said:


> This information must not include distributions. I have held IPL since 2012. My annual return including distributions is 6%. In today's interest rate environment I am content with that kind of return. It is true the share price was in the high 30s in 2014 and even in the mid 20s a year ago. Hindsight indicates I should have sold half(or more) in 2014. However, I have 15-20 more years of accumulation. Will it ever return to the high 30s? Maybe not. I had also considered adding recently(upthread). I think we won't see much upside movement in the couple years but I look forward to coming back in a decade to see how we fared.


You are correct. I have stopped tracking dividends/distributions for years. Congratulations for doing okay with this one. For me, it has been anything but painful experience since 2014. The chart might say it topped in the high 30s but the truth it went up to high 40s near 50.

I recall it was a nice afternoon I was taking my girlfriend out shopping at Shops at Don Mills Toronto. I wàs sitting in Aritza louge waiting for her to shop and got a text from a swing trader friend saying he's in on the stock at 46 and change. I told myself ... damn, now the FOMO people are all jumping in, it should be the time to sell. Of course I didn't and the rest is history. 

Overall I still end up doing okay thanks to never sell any winners. At worst, my money in IPL will become zero dollar but I can't imagine where I am today had I sold any of my big time winners. We just never know when a loser can turn around to become a winner again.


----------



## Borat

Wish I never touched this garbage stock. Bleagh


----------



## robfordlives

I own a very small bit of this as it was one of the first stocks I ever bought many years ago. I don't ever look at it except for when I see this thread pop up and it is always bad news. I have a difficult time selling my stocks I guess. Management is a total disaster and going into a dying business of supplying plastic given the Libs upcoming ban


----------



## Eder

None of the plastic being banned will be a product that the Heartland will produce.


----------



## Borat

Gonna hold onto this until Heartland is online or maybe someone will buy them out entirely.


----------



## agent99

Eder said:


> None of the plastic being banned will be a product that the Heartland will produce.


The rules are not yet final. But, as an example, drinking straws, which are on the list, are made from polypropylene.

A lot may depend on the form the plastic product takes. If, for example, it is packaging that is usually thrown out in the garbage, that type of packaging will be discouraged regardless of plastic used. A practical program for recycling also needs to be developed. Polypropylene is used in some types of disposable packaging and therefore, use may be affected. It is sometimes used in conjunction with other plastics that may be on the list. The whole package no doubt finds it's way into our garbage.

We need to first have rules on how products sold to us are packaged. And additional rules that will discourage all types of plastics of finding their way into landfills or the lakes and oceans.

These changes in plastics usage may affect the demand for PP. But on top this, it seems to me that IPL may have bitten off more than they can chew. Construction delays, cost overruns, technical problems before full production and so on before they get any positive return on their investment. Doubtful their other businesses can carry them through this. 

I was lucky in buying IPL early on in the $9-$10 range. Then selling 1/2 before prices plummeted and the rest at a couple of bucks over my purchase price. Good distribution in meantime, so not unhappy I owned it.


----------



## robfordlives

Borat said:


> Gonna hold onto this until Heartland is online or maybe someone will buy them out entirely.


Actually management has proven incompetent with respect to the latter as they rejected a $30 per share takeover offer from Husky. Of course they are doing OK with their multi million $ salaries so don't shed a tear for them.


----------



## doctrine

robfordlives said:


> Actually management has proven incompetent with respect to the latter as they rejected a $30 per share takeover offer from Husky. Of course they are doing OK with their multi million $ salaries so don't shed a tear for them.


Husky has fallen even farther than IPL since then and given the regulatory hurdles over that non-binding proposal, and the pandemic/oil price war, there is a very high likelihood it never would have happened and it would have just tied IPL and their management up and led to even more problems. And given the foreign Chinese ownership of HSE, there were big risks.

Meanwhile fast forward and Husky just wrote off half of their company's book value and 200% of their market capitalization. Poof. Gone. Their assets are not the best and cannot stand in the current environment. IPL management were smart not to go down that route.

Meanwhile, news that Saudi Arabia is potentially investing $5+ billion in the types of petrochemical plants that IPL is amongst the first to build is likely going to attract interest. Other pipelines flat or down today. Plastics aren't going away whether or not they are recycled and IPL is right on point in any case with the polypropylene. Banning straws won't even show up in the significant digits.


----------



## peterk

If anything, the PP plastic that IPL will make is the "good plastic" and will be in hot demand. Most likely there will continue to be a transition from the (apparently) bad disposable plastics. Your straws and containers will just now be made out of the good stuff, cost more, and have a "please recycle" stamp on them or some such, or a fancy new identifying label/texture so we all know that these are the new environmentally friendly plastics.

Restaurants will say they recycle or wash them, but they won't. It'll be a scandal of epic proportions, causing at least 0.5 degrees increased global warming.

Small business will be incrementally hurt more than large businesses. Governments will grin.


----------



## AltaRed

I agree with Doctrine that Chinese controlled Husky most likely would not have been allowed to purchase IPL, nor did they likely have the financial strength to do so.

People tend to forget that other than their US refining assets which I think are crown jewels for Canadian producers, most everything else in Western Canada (and their NF offshore holdings) are rather second tier (no economies of scale). I don't know anything about their SE Asian assets. Li Ka-Shing could see the writing on that wall and was/is willing to cede control in the combined entity to a rather minority 27%? position in return for hopefully better financial returns.

IPL should now be courting the Saudis for an equity interest in Heartland to get a shot of capital juice in the arm.

P.S. Pembina Pipeline was wise to bring in equity partners for their delayed PP project, and the Kuwaitis for the very 'unlikely' progression of their Jordan Cove LNG plant.


----------



## agent99

peterk said:


> If anything, the PP plastic that IPL will make is the "good plastic" and will be in hot demand. Most likely there will continue to be a transition from the (apparently) bad disposable plastics. Y
> etc etc


The problem is that even the so called 'good plastic', will also be dumped in the garbage and end up in landfills and in lakes and ocean. Once there, there are no "good plastics" . Not even most bio-plastics.

Making out that this is just a big joke doesn't help. Buying and owning IPL may be


----------



## agent99

Borat said:


> Wish I never touched this *garbage stock*. Bleagh


Good description


----------



## doctrine

IPL has a takeover offer from Brookfield Infrastructure for $16.50 a share.









2021-02-10 | NYSE:BIP | Press Release | Brookfield Infrastructure Partners LP Limited Partnership Units


(2021-02-10 | NYSE:BIP) Brookfield Infrastructure Announces Intention to Acquire Inter Pipeline Ltd. for C$16.50 per Share in a Transaction Valued at C$13.5 Billion




stockhouse.com





I have 2000 shares. I sold 1080 shares at $19 back in February and bought back 2000 at an average price of $10.97 in April/July.

It's not a friendly/insider offer so it remains to be seen what the Board recommends - in fact, this is more characterized as a hostile offer. I think the price will have to go a little higher to be accepted. Not sure how much higher but I think at least a few more dollars.

Let's not forget IPL owns a huge chunk of Alberta pipelines between some of the biggest and best funded oil sands projects that are going to be around for decades. Those pipelines are not going to be replaced and everyone sees how hard it is to build new ones. Irreplaceable assets.


----------



## Money172375

If you accept the BIPC shares, how is your cost basis determined on the new shares? Closing value on the day you receive them? Something else?

and likewise, if you accept the new shares, what will reported as the disposition of proceeds of IPL on T5008?


----------



## doctrine

80% of the offer is cash so I think you always have that option. I would not likely accept BIPC shares so I'm not sure about the disposition. I'm likely to sell at some point - pipeline valuations have come down quite a bit. 

BIPC indicated fair value of $17.00 to $18.25. At $18.25, IPL would be taken out to a premium to every other Canadian pipeline company, so I doubt the offer goes higher than that unless there is a competing bid. 

Should be an interesting few weeks ahead.


----------



## peterk

Wow. I have 1500 shares. ACB around $17. So.... easy come easy go? lol.

"_Brookfield Infrastructure believes the Company’s view fails to recognize the capital market realities facing energy-based infrastructure companies now and in the future. "_

That sounds potentially like hyperbolic rhetoric to justify their low-ball offer... It's certainly not clear that funding access for small, economically viable petrochemical plant cash-cows is going to caught up in the same net as the few, unlucky, high profile oil projects that will be targeted by governments/banks, who have to face the "capital market realities". And IPL already has their pipelines.


----------



## londoncalling

Have held IPL since 2012 at an ACB of $16.25 Watched it run up all the way to almost $40 in 2014 before watching it slide all the way down again. Not sure if this deal will happen. Even if it does I already own Brookfield Infrastructure. If the deal goes through I will likely sell before closing and take the cash.


----------



## Eder

I'll take the cash but feel IPL is under valued by this offer (I'd be in the black at the offer price). I hope the deal fails to go thru, their pipelines are irreplacable in the silly environment we find ourselves in. I'd rather them wait till Heartland has been running for a year before entertaining offers.


----------



## Money172375

Didn’t they turn down a $30 offer before the pandemic?


----------



## Fraser19

Money172375 said:


> Didn’t they turn down a $30 offer before the pandemic?


Yes, however I think there was a reasonably good argument that, that offer wasn't very serious.


----------



## Fraser19

Inter Pipeline Surges Above Price of Brookfield’s Hostile Offer


Inter Pipeline Ltd. surged as Brookfield Infrastructure Partners LP made a hostile C$7.1 billion ($5.6 billion) offer following the failure of previous talks to produce a friendly deal.




www.bloomberg.com





Looks like BIP had actually offered a fair bit more in September than they are today. I suppose we could see a substantially sweetened offer


----------



## doctrine

Well, in Brookfield's favour, is that pipelines have definitely been re-rated downwards across the board. ENB, TRP, PPL, IPL, etc. All of them are basically still 20% or more off their highs. This takeover is not going to be at a discount to those other companies.

I think the deal will eventually happen because although it is opportunistic, they have probably put this bid in a good place where they have room to increase it and still get the assets at a price they can live with. I'm not sure it gets to $20 though.


----------



## Ponderling

hey, money is money. If I end up with bip, it is still in the same business, sorta. Or wait for it to go thru sell, and buy another pure pipeline, though TRP and PPL are already part of my utilities stable of current holdings.


----------



## Money172375

Opened at 17.53, up 30%. Wonder what will happen. I’m up in my non-reg, but down in my tfsa. Slightly up combined.


----------



## birdman

Money172375 said:


> Opened at 17.53, up 30%. Wonder what will happen. I’m up in my non-reg, but down in my tfsa. Slightly up combined.








News Story







markets.qtrade.ca





Looks like a takeover offer is about to be presented by Brookfield Infrastructure


----------



## Money172375

If IPL rejects the offer, does the stock tank again? Or is the offer price more aligned to its value?


----------



## newfoundlander61

Not surprising as many take overs start with a back and forth and first offer being turned down.


----------



## doctrine

Money172375 said:


> If IPL rejects the offer, does the stock tank again? Or is the offer price more aligned to its value?


If IPL management reject the offer, this will almost certainly head towards a shareholder vote and management cannot block it - this will be a permitted bid under IPL's official shareholders rights plan and will remain open for 105 days after being received. 

IPL does not have a single major shareholder or any sort of dual-share voting structure, so if Brookfield they offer enough then it will get accepted. The stock trading at $17.40 signals to me that current shareholders are pricing in at most a low $18.xx bid in the next 2-3 months that will be acceptable to them. I don't see $20 happening.


----------



## OptsyEagle

Although people are justifiably tired of the performance of this stock, it should be obvious to the owners of this company that this bid IS way too low. If you bought the stock at $10 it will make you a profit, but you will still find it hard to take your $18 plus dollars and find a similar stock of comparable value.

I am a little surprised why PPL and ENB, etc, have not moved up. I would think a few of the sellers today would still want some pipeline exposure in their portfolio, but perhaps all the sellers today are pipeline avoiders now. Hard to tell.


----------



## AltaRed

I suspect the latter. IPL shareholders likely want out given IPL's balance sheet and cost/budget overruns on Heartland. ISTM that IPL management has already rebuffed the negotiations to date so Brookfield will go straight to shareholders. I think the majority (especially retail investors) will take it.


----------



## doctrine

OptsyEagle said:


> Although people are justifiably tired of the performance of this stock, it should be obvious to the owners of this company that this bid IS way too low. If you bought the stock at $10 it will make you a profit, but you will still find it hard to take your $18 plus dollars and find a similar stock of comparable value.
> 
> I am a little surprised why PPL and ENB, etc, have not moved up. I would think a few of the sellers today would still want some pipeline exposure in their portfolio, but perhaps all the sellers today are pipeline avoiders now. Hard to tell.


At the current price ($17), IPL isn't really at that much of a discount to PPL. Or TRP, or ENB. You could definitely go over there and also more than double your dividend yield. I think people want out of fossil fuel infrastructure. Institutions especially. I fully believe this is only a discussion around price, not about whether it will be sold.


----------



## OptsyEagle

doctrine said:


> At the current price ($17), IPL isn't really at that much of a discount to PPL. Or TRP, or ENB. You could definitely go over there and also more than double your dividend yield. I think people want out of fossil fuel infrastructure. Institutions especially. I fully believe this is only a discussion around price, not about whether it will be sold.


That's right. They are all very undervalued.

I suspect this bid is a way of reducing the value of Heartland to zero. It was a dumb idea, right from the beginning. But, the stock price has more then adjusted to account for this mistake and the Brookfield group probably sees that and figures they can pay $18 or so and simply write off the Heartland. I might be wrong on that part but that is what I would do, if I was them.


----------



## AltaRed

Heartland will be successful (propane producers are desperate for value added uplift), but I suspect Brookfield doesn't want to pay for that. They would spin it off anyway once operational, or near operational.


----------



## ddivadius

Great timing, NOT. Held IPL for long time and was sitting on a big loss and dividend cuts. Just sold all my IPL on Monday and bought PPL.


----------



## londoncalling

Anybody sell on the 30% increase today?


----------



## Eder

Not yet I think its too low an offer.


----------



## doctrine

I am still holding my 2k shares. It seems like the financial community believes the most likely outcome is BIP takes it with a slightly higher offer at some point in the future. It will be very interesting to read the bid circular when it is filed. Also the response by IPL - will they make an alternate proposal or try to justify status quo? I think like many, I'm not really adverse to selling and it's just a question of price. Lots of long suffering shareholders out there.


----------



## AltaRed

The G&M suggests the offer is fairly valued. Whether shareholders bite or not and whether BIP has to sweeten the pot by $1 or so remains to be seen. The probability of an alternative offer is tempered by BIP's current 20% ownership of IPL. BIP wins ether way......

Regardless, timing is not exactly coincidental with IPL's Q4 results a week from now. IPL will be on the hot seat on the conference call.


----------



## peterk

Well - I'm out. My IPL adventure is over... I did not find Alpha lol. About $1500 in CG overall (Loss in TFSA, gain in unregistered, obviously  )

Bought a bit of ENB, and bigger bits of EMA and XIU with the proceeds, and kept about 1/3 as cash that I'm not sure what to do with yet.


----------



## Money172375

peterk said:


> Well - I'm out. My IPL adventure is over... I did not find Alpha lol. About $1500 in CG overall (Loss in TFSA, gain in unregistered, obviously  )
> 
> Bought a bit of ENB, and bigger bits of EMA and XIU with the proceeds, and kept about 1/3 as cash that I'm not sure what to do with yet.


I’m hoping and thinking this goes higher. $19?


----------



## Eder

I'm still holding...I don't believe its EV is $17-18.


----------



## Dilbert

Yup, I ditched mine a while back in favour of good upside potential with TRP. I don’t miss the drama!


----------



## doctrine

Q4 results were solid. IPL has one card in its pocket in that it is fully funded to have Heartland operational in about a year. The strategic review buys time. It's really hard to say where IPL goes. I am hanging in there for now because I really don't have a better idea for the cash. At $17.91, IPL is getting close to the top end of the potential BIPC offer range of $18.25. I find it hard to believe the takeover offer gets to $20. The offer should be in by the end of the month according to G&M.


----------



## Eder

Pretty sure once Heartland gets on line this is $30/share in a year. I think Brookfield is trying to steal this. Anyway its a good spot for shareholders...we make coin at $18 or go to Disneyland at $20+


----------



## Dilbert

Yes, I think it probably has a good potential, long term. My wife is holding on to hers.


----------



## agent99

Eder said:


> Pretty sure once Heartland gets on line this is $30/share in a year. I think Brookfield is trying to steal this. Anyway its a good spot for shareholders...we make coin at $18 or go to Disneyland at $20+


If nothing further goes wrong, the earliest they will be on-line and in commercial production, seems to be about 18 months from now. How long after that it would be profitable? With the overruns, maybe never for IPL. A long time to wait for investors.

If Brookfield takes over and then spins Heartland off to a company with more expertise in plastics, at a fair price, could then be profitable and a good fit as a consumer for Alberta's propane surplus.

Happy I sold my IPL earlier in 2020 - Average selling price was about what is now being offered. I initially bought at a much lower price.


----------



## MrMatt

I'm just going to hold my BIP, and buy more Brookfield.


----------



## Testing-Testing-123

Eder said:


> Pretty sure once Heartland gets on line this is $30/share in a year. I think Brookfield is trying to steal this. Anyway its a good spot for shareholders...we make coin at $18 or go to Disneyland at $20+


I think this is a pretty accurate statement.
The board of directors proposed heartland would be a viable project from the start, and although they've had set backs and cost overruns seem to think that the value is there, it's just not reflected in the share price yet. There's only a handful of competitors in this arena in North America, so market demand is there. 
Heartland is a huge leap for this company, but once online and running smoothly, my feeling is it will be a cash cow for them. 
I'm long on IPL until heartland is up and running or it's sold.


----------



## OptsyEagle

The only objection I have to the Heartland valuation above is that once it is online the valuation of IPL will in reality go from $50 to $5 and then to $30, etc., etc.

It will probably add volatility to an otherwise fairly stable business. That type of thing will usually result in a lower PE, but of course today, getting a lower PE then a pipeline business might be a difficult.


----------



## where's hunter?

maybe they will sell heartland and increase dividend to prevent takeover. they don't want to sell the company


----------



## newfoundlander61

Brookfield offers to buy IPL for $16.50 in cash or stock.

Source: BNN


----------



## agent99

newfoundlander61 said:


> Brookfield offers to buy IPL for $16.50 in cash or stock.
> 
> Source: BNN


More here: Brookfield Infrastructure Commences Cash and Share Offer to Acquire Inter Pipeline Ltd.


----------



## robertsclak

davext said:


> Hi, Does anyone know what happened to Inter Pipeline today? It bumped up 5% today but I didn't see any news.
> 
> My TFSA is happy though


BAM is supposedly offering to buy.


----------



## AltaRed

robertsclak said:


> BAM is supposedly offering to buy.


You are 12 days and a few forum pages behind.. See post #684


----------



## MrMatt

robertsclak said:


> BAM is supposedly offering to buy.


No BIP is offering to buy, as the post above this points out.


----------



## Eder

I think pretty much the same company. Definitely the predatory offer is lol.


----------



## doctrine

Eder said:


> I think pretty much the same company. Definitely the predatory offer is lol.


I wouldn't expect BIPC to do anything less than try to take the company as cheap a price as possible. 

I think this still gets done near or under $20 and the share price at $17.xx reflects this. I think waiting is appropriate - I think there could be 2 higher offers from BIPC. One more higher offer, and then a "last and final" one. I'm interested in when this gets to the end game, but I'm not like many online commentators who are like "$30 or nothing". If Heartland is really that good, then the share price should jump when the numbers are released in a few weeks here.


----------



## Eder

I think waiting is the most profitable thing to do. I'll probably take the shares in BIP as I have a pretty hefty capital gain.
At any rate under $20 I'm pretty sure there may be other dogs sniffing about.


----------



## Money172375

Eder said:


> I think waiting is the most profitable thing to do. I'll probably take the shares in BIP as I have a pretty hefty capital gain.
> At any rate under $20 I'm pretty sure there may be other dogs sniffing about.


Is the IPL disposition into BIP a taxable event? or is the cap gains deferred until you sell BIP?


----------



## Retiredguy

Sold today at 18.09. My position had been under the Titanic but the takeover bid moved it to the bridge of the Titanic.


----------



## gardner

The BAM deal was rejected last week but the price of IPL has held up. Think Brookfield will up the ante?



https://www.cbc.ca/news/business/inter-pipeline-brookfield-1.5942197


----------



## Money172375

gardner said:


> The BAM deal was rejected last week but the price of IPL has held up. Think Brookfield will up the ante?
> 
> 
> 
> https://www.cbc.ca/news/business/inter-pipeline-brookfield-1.5942197


Yes.


----------



## doctrine

gardner said:


> The BAM deal was rejected last week but the price of IPL has held up. Think Brookfield will up the ante?
> 
> 
> 
> https://www.cbc.ca/news/business/inter-pipeline-brookfield-1.5942197


Yes, but BIPC has also rallied which has pushed the effective offer price closer to $17 from $16.50, as it's a partial stock deal. 

IPL is not a cheap stock, even adding in Heartland. There won't be that many takers on the strategic review. Maybe I'm wrong, but I still think this gets done at or under $20 at most.


----------



## Fraser19

Sold out today, 871 shares at 18.43.
I have debated this in my mind for a few days, and I finally decided to take the money I can get today than to risk the deal going though below today's market price or the deal falling apart and the price sinking. A total return of +21.xx dollars in three years.

Now I am down to just one individual stock remaining and everything else is in index funds.


----------



## Testing-Testing-123

I'm still holding....this is going to be interesting.


----------



## OptsyEagle

I suspect the Brookfield deal is probably holding the IPL stock price down, right now, more then it is propping it up.

Just my opinion of course.


----------



## londoncalling

Inter Pipeline snags $408 million grant for Heartland Petrochemical Complex (msn.com)


----------



## Eder

Good things are happening ,Heartland will be in production with or without IPL. Its a real good news story for Alberta.

Oh, still holding waiting for $30. Up yours Bruce Flatt...show us the money!


----------



## londoncalling

Hostile takeover target Inter Pipeline reports 60% of Heartland plant is contracted (msn.com)


----------



## agent99

Eder said:


> Good things are happening ,Heartland will be in production with or without IPL. Its a real good news story for Alberta.


Using surplus propane was a good idea for Alberta and Canada. But a bad idea for IPL who had/have little or no experience in that industry. Overuns in cost and schedule not surprising. 

Someone will make money eventually.

I _was _a long time holder - still interested having worked in the industry.


----------



## peterk

Still no move above $18? Where's any of the sweetening the pot deals anticipated? Heartland contract means nothing?

Very glad I ditched 2 months ago. Maybe I should get back in now?


----------



## doctrine

IPL is not a cheap stock, so I'm not sure how much upside there is. Heartland was not cheap to build - $4B to get $400M of EBITDA. It could take them 20 years to pay it off. Results are out on 7 May and if management wants their jobs, they had better have information on the strategic review. But this should all be coming to a head in the next few weeks.


----------



## My Own Advisor

I ditched IPL (a few hundred shares in 2020) and bought a mix of renewable stocks, including BIPC and BEPC. I figure I win either way with Brookfield's deep pockets or owning the other renewable plays like INE, CPX and AQN. 

I think the IPL management team is in over their heads.


----------



## depassp

According to my broker (Interactive brokers), "Brookfield Infrastructure Corporation and Inter Pipeline Ltd have entered into a merger agreement in which Brookfield Infrastructure Corporation will acquire all of the outstanding shares of common stock of Inter Pipeline Ltd"

The IPL board recommends that I REJECT the Hostile Bid and DO NOT TENDER your Common Shares (website)

My broker has sent me a message about a "Voluntary CA Election" in which "Shareholders are being provided the option to elect to receive either cash or stock consideration in exchange for their shares" with the following options:



> Option 1 - Take no action
> Option 2 - Tender shares for cash election: receive 16.50 CAD per share tendered and accepted, less any applicable withholding tax
> Option 3 - Tender shares for stock election: receive 0.206 shares of Brookfield Infrastructure Corp Class A Exchangeable Subordinate Voting shares for each share tendered and accepted
> 
> In the absence of an election, no action will be taken, and the holder will receive the default consideration, in accordance with Option 2, the cash option.


I'm hoping someone can confirm: Choosing Option 1 is indeed an election, right? Option 1 is REJECTING the offer? I won't end up with cash?


----------



## doctrine

Yes, doing nothing means you are not tendering to the offer and the offer will not pass unless BIPC will have 66% of total shares after the tender is complete, or 50% of the total shares not owned by BIPC are tendered.

You may still end up with cash if the 66%/50% thresholds are met and the offer is accepted, as BIPC will have authority to buy out the remaining shares at that point.


----------



## AltaRed

My take is this is a reasonable offer and I'd be in for Option 2 or 3 whichever one wants. Like some previous posts, I think IPL management is in denial to some extent given they have not been able to find an investor for Heartland. About the only thing going for IPL right now is the improving commodity market. Oil shipment volumes are (will be) up and NGL processing revenue will also be up along with oil prices and production. I have not crunched any numbers for about a year so really don't know whether there is more price uplift to come. What I do believe is Brookfield stock is better positioned for a higher CAGR than does IPL stock. 

My speculation is Brookfield will meet the necessary voting threshold.


----------



## doctrine

My speculation is that they will meet the threshold, but not at $16.50 and maybe not by 7 June. I would think the offer has to go up to $18-19 but can still be done under $20. Given that pipelines have moved up in the last 3 months, the downside is not as much here in my opinion as Brookfield could still walk away. But also given the stock price hasn't gone materially above the $18.25 top end range that BIPC had said was possible, I think they will hang around to pick this off because the price really hasn't risen since the bid came public.


----------



## Gator13

Pembina is buying Inter Pipeline. Friendly deal at $19.45 per share.


----------



## doctrine

IPL is trading at the tiniest of premiums, 0.7%, above the PPL offer based on share price. BIPC has to respond. I am wondering if they will walk away and take their profit. BIPC shares are up substantially, 5%, perhaps because there won't be as many new shares issued if the takeover fails.


----------



## londoncalling

Pembina Pipeline signs friendly deal to buy Inter Pipeline for $8.3 billion in stock (msn.com) 

Here is a link.

I checked end of day and IPL no longer trades at a premium. As an IPL shareholder I like the announcement. I already hold Brookfield so that is an added bonus.


----------



## My Own Advisor

Not so fast 








Brookfield raises offer to buy Inter Pipeline


Brookfield Infrastructure Partners on Wednesday raised its per share offer to buy Inter Pipeline Ltd to C$19.75 from C$16.50.




www.nasdaq.com





"June 2 (Reuters) - Brookfield Infrastructure Partners BIP.N on Wednesday raised its per share offer to buy Inter Pipeline Ltd IPL.TO to C$19.75 from C$16.50.
The latest offer comes a day after Pembina Pipeline Corp PPL.TO said it would buy Inter Pipeline in an all-stock C$8.3 billion ($6.87 billion) deal."


----------



## agent99

deleted


----------



## AltaRed

doctrine said:


> IPL is trading at the tiniest of premiums, 0.7%, above the PPL offer based on share price. BIPC has to respond. I am wondering if they will walk away and take their profit. BIPC shares are up substantially, 5%, perhaps because there won't be as many new shares issued if the takeover fails.


Brookfield wins both ways. If they win the prize, they get to carve up IPL like a side of beef. They don't fall in love with things .They exploit/extract value (hence me owning BAM shares). If they lose, they pocket a wad of money from their minority holding. Shrewd asset aggregators know how to play it both ways.


----------



## gardner

Even at $20 I am under water on IPL (I am in at 23.45) and I am tempted to just take the loss now and decide what to buy later when the dust settles.


----------



## Retiredguy

I sold at @18.10 several months ago (loss) and put the money in SU @ 16.40.....got lucky. I own some PPL so may yet own back "IPL" but dont have any Brookfield.


----------



## londoncalling

I am a long time holder of IPL (2012) at 16.25. I am not interested in a cash and equity exchange for my shares. Back in 2012 opted for IPL instead of PPL. taking a quick looking at the 10 year I believe PPL may have given a better return. I did not do a TR comparison for the actual holding period mainly because I can't go back and change things. I am happy with my return on IPL and am willing to wait to see where things go. My guess is someone will end up owning IPL and I will likely sell when the winner is determined.


----------



## doctrine

I've seen some good points on why Brookfield may prevail. They are offering a significant cash component, they have been building their own pipeline business in Alberta that would be complementary as well, IPL's assets are attractive because the winner could have an edge on the TMX pipeline when the feds sell in the next few years, and if anyone does want the higher dividend from PPL, you can literally just sell IPL now at a premium to the last offer or maybe the final offer to buy PPL and take the 175% higher dividend. I realize there is a good case for PPL, but BIPC has good reasons to own long term and also can close much, much faster if they keep ponying up the offer, which will be easier for them than PPL. Food for thought. Would not be surprised to see slightly higher offers come in.


----------



## Beaver101

Brookfield Infrastructure revises Inter Pipeline bid to include all-cash option

The big fish continues to go after the little fish until a bigger fish go after the big fish. Anyone considering of tendering their shares for the big fish? I didn't realize I'm sushi (tiny portion) for the big fish on this one.


----------



## doctrine

I have not tendered my shares. If Brookfield wins, I would take the cash. If PPL wins though, I might just hold onto the shares for a while. 

I think the PPL bid may be more popular, absent a higher bid from BIPC. It seems many institutions/analysts see value in the combination. They are also looking to still hold energy infrastructure. PPL/IPL would be a real powerhouse with pricing power, and opportunities to expand.

Both bids are attractive. I wonder if BIPC can create a stalemate where neither offer gets enough support, and someone has to bid more.


----------



## AltaRed

With PPL making offers all over the map, including a newly announced interest in TransMountain with indigenous ownership (in addition to the LNG project with indigenous ownership), it seems like CEO ego gone amuck. Remember AltaGas egomania?

PPL already wrote down their Jordan Cove LNG fantasy and took a write off on their own petro-chemical JV. PPL seems like a company out of control to me and I have flagged my PPL holdings for opportunistic 'dumping' over the next 12 months or so.


----------



## Beaver101

^ Anyone paying attention to this? The latest is BAM is offering a mish-mash of cash + stock + extension ... it's annoying.


----------



## Numbersman61

The Offer has been revised to include an all cash offer of $19.50 per share. A shareholder now has a choice - cash or stock in PPL.


----------



## Beaver101

^ I'm not sure about that as I just received (July 6) a Corporate Action notification from my brokerage that BAM is extending their offer to cash + their stocks (multiple options=mish-mash) ... with a possibility of another extension on this offer???? The notification is 2 pages long ...putting me to sleep.


----------



## Numbersman61

“
BROOKFIELD, NEWS, June 18, 2021 (GLOBE NEWSWIRE) -- Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN), together with its institutional partners (collectively, “Brookfield Infrastructure”, “we” or “our”), is pleased to announce its intention to file a second notice of variation to its offer to acquire all of the outstanding common shares of Inter Pipeline Ltd. (TSX: IPL) (“IPL” or the “Company”) commenced February 22, 2021, as varied on June 4, 2021 (the "Offer") to include an option for IPL shareholders to elect to receive 100% cash consideration at C$19.50 per IPL Share without proration, and to extend the expiry time of the Offer until July 13, 2021.

_1 If Brookfield Infrastructure is successful in its application to the ASC to eliminate or reduce the amount of the Break Fee, it is prepared to further amend its Offer to increase the consideration by such amount._

IPL Shareholders can now Elect to Receive 100% Cash Consideration without Proration

Based on feedback received from institutional and event-driven investors with significant ownership positions in IPL’s common shares, Brookfield Infrastructure is prepared to expand the maximum cash consideration to be paid in the context of its Offer to 100%.

We believe an all-cash option provides superior value and flexibility for IPL shareholders, as well as enhanced certainty and a clean exit for those institutional and event-driven investors with near-term mandates. Conversely, the all-share consideration included in the Alternative Transaction would result in a substantial and protracted overhang on Pembina’s share price given monetization considerations for event-driven funds, select institutional shareholders and Brookfield Infrastructure’s C$1.6 billion economic interest (the “Brookfield Block”).

The revised Offer preserves the ability for eligible shareholders to elect tax deferred BIPC Shares as consideration, which provides access to the long-term growth potential of BIPC’s diversified global infrastructure platform.

With forecast corporate liquidity of over $4.5 billion, inclusive of $1 billion of additional liquidity provided by Brookfield Asset Management Inc., Brookfield Infrastructure Partners L.P. has more than sufficient liquidity readily available to support the Offer.

Brookfield Infrastructure Continues to Challenge IPL’s Inappropriate Defensive Tactics

The ASC has confirmed a hearing date of July 7th for Brookfield Infrastructure’s challenge of the inappropriate defensive tactics employed by IPL and the special committee of its board of directors, which are not in the interests of IPL shareholders. Specifically, Brookfield Infrastructure is seeking to eliminate or otherwise reduce the C$350 million Break Fee which threatens to inappropriately enrich Pembina at the expense of IPL’s shareholders, and to cease-trade both of IPL’s shareholder rights plans, colloquially referred to as “poison pills” as they no longer serve any valid purpose.

Brookfield Infrastructure is prepared to increase the cash consideration of our Offer by the amount of any corresponding reduction in the Break Fee with such resolution anticipated before the expiration of our Offer. In the event the Break Fee is successfully set aside, this would represent an additional C$0.90 per IPL share.”


----------



## AltaRed

Presumably someone here will report on the outcome of the hearing (if announced today). Whether IPL shareholders are in the PPL camp or the BIPC camp, the very least ASC should do is penalize IPL management with a severe woodshed bashing. IPL's tactics are NOT in the interest of shareholders. IPL's Board's responsibility is to solely optimize/maximize the value returned to shareholders given they are 'done dinner' anyway (the company is sold one way or the other).


----------



## Numbersman61

The hearing date has been changed to June 9. The reason for the $350 million Break Fee was to make the deal with PPL. The PPL deal forced Brookfield to raise their Offer. - it is normal in situations like this.


----------



## AltaRed

Break fees are indeed common but I understand there are other 'poison pills' at play. ...whatever they are.


----------



## doctrine

IPL is now trading at a 3.1% premium to PPL's offer. And that does not take into account another 2-3% for the opportunity cost of not switching into PPL now for the higher dividend. BIPC's offer, meanwhile, is enhanced by the BIPC stock option with BIPC shares hitting all time highs and now over $100. On a pro-rated basis, IPL is at a slight discount to the BIPC offer; if you were able to just get BIPC shares, you would have $22.50 equivalent. 

It just looks to me like the PPL offer, which was in the lead for a few weeks, is falling behind with IPL at a premium to the PPL offer but a discount to the BIPC offer.


----------



## Money172375

Where is this at? Just got my Information Circular in the mail. Is the Brookfield offer dead? Will they come back with another offer before the July 29 shareholder meeting?


----------



## AltaRed

ASC handed Brookfield an Up Yours. IPL's break fee is reasonable.


----------



## doctrine

I am sure BIPC will respond by the morning. They would have a pretty good idea of whether shares are being tendered and that will likely influence the decision. Raised bid = actual investor interest and tendering. Withdrawn bid = few shares tendered. They have time to raise the bid once more in time to influence the PPL vote but that is it, so I feel like this is coming to a close relatively soon here. Time to put up or be quiet.


----------



## Ponderling

got proxy's from ppl and ipl ( own shares of both) yesterday in the mail. So now time to read them more carefully. Tossed the big brookfield printed material from earlier, as now something new may come.


----------



## gardner

Ponderling said:


> got proxy's from ppl and ipl ( own shares of both) yesterday in the mail.


I voted my IPL shares to go for the PPL deal, not that my holdings count for anything much.


----------



## AltaRed

Ponderling said:


> got proxy's from ppl and ipl ( own shares of both) yesterday in the mail. So now time to read them more carefully. Tossed the big brookfield printed material from earlier, as now something new may come.


I will have to look for the PPL materials. What is the deadline....since I usually only go to our community mailbox once per week or less?


----------



## Numbersman61

gardner said:


> I voted my IPL shares to go for the PPL deal, not that my holdings count for anything much.


Meeting will be postponed - they don’t have the votes.


----------



## doctrine

Given PPL needs 66% of IPL voters to approve the vote, and BIPC owns 9.75% direct, means PPL actually needs 73% of the remaining shares to pass the vote. If BIPC has some support, then PPL may not indeed have the necessary votes and the meeting could easily be postponed. PPL might get $350M cool cash, _and_ IPL might not even get a takeover out of it. Think about that. There might be enough time for a second vote to approve the deal avoid the break fee, but this could plausibly end up in a stalemate. There is no guarantee IPL shareholders will put either vote over the line unless someone ponys up more money.


----------



## Money172375

https://ca.finance.yahoo.com/news/brookfield-infrastructure-intends-file-revised-105400736.html


----------



## Beaver101

Which company is bigger? Brookfield or Pembina? The giant should be paying more if they "really" want it instead of a dollar (100 pennies) here and there. Sheesh.


----------



## gardner

BAM is 100B while PPL is ~20B cap.


----------



## Beaver101

^ Thought so, a cheapskate bully too.


----------



## AltaRed

Is why I love to own BAM.A. They are true asset owners buying low.


----------



## MrMatt

gardner said:


> BAM is 100B while PPL is ~20B cap.


Kind of 
BAM is just one part of the Brookfield web BIP is about $20B.

Also it doesn't matter "who's bigger". They should pay a fair price for the asset.

Brookfield is a messy web of accounting, but there is little to no doubt they know how to allocate capital.


----------



## Beaver101

MrMatt said:


> Kind of
> BAM is just one part of the Brookfield web BIP is about $20B.
> 
> Also it doesn't matter "who's bigger". They should pay a fair price for the asset.


 ... $19.50 is fair, and then $20.50 is fair ... give me a break with the alcheapo, buying "low" as "below".



> *Brookfield is a messy web of accounting*, but there is little to no doubt they know how to allocate capital.


 ... love the euphemism for creative accounting.


----------



## MrMatt

Beaver101 said:


> ... $19.50 is fair, and then $20.50 is fair ... give me a break with the alcheapo, buying "low" as "below".
> 
> ... love the euphemism for creative accounting.


First half of 2020 IPL was trading at <$15. I'd say a 30% premium is typically considered "fair".
Yeah 19.50 is fair, so is 20.50 I don't get your point.


The organization of the Brookfields is a mess, have you ever looked at it?
They're taking one property division into BAM, but spinning off another as a private REIT.

It's a very confusing ownership structure, particularly when you consider PVF. 

It literally is a confusing web, I never said it was "creative accounting".


----------



## Beaver101

MrMatt said:


> First half of 2020 IPL was trading at <$15. I'd say a 30% premium is typically considered "fair".
> Yeah 19.50 is fair, so is 20.50 I don't get your point.


 ... of course, it's fair ... why don't you pick it since inception when it was less than $15 ... I can see it as $7.30 since 2003 so BAM/BIP is paying waaaay more than a premium for this company which has survives this long. More than "fair"!
My point being with their continuous nickel & diming offers, they're just C.H.E.A.P. (alternatively viewed as "predatory") or your version of "it's fair".



> The organization of the Brookfields is a mess, have you ever looked at it?
> They're taking one property division into BAM, but spinning off another as a private REIT.
> 
> It's a very confusing ownership structure, particularly when you consider PVF.
> 
> It literally is a confusing web, I never said it was "creative accounting".


 ... no kidding about the "web" like structure. Look at the spin-offs they have done over the years. No need to dig into/look into Brookfields as I'm not interested in it, a bully.

Re -repeat your comment from post #783:


> _Brookfield is a messy web of accounting, but there is little to no doubt they know how to allocate capital._


 ... so what was that you meant by a messy web of accounting + allocation of capital if that's not creative accounting? Fancy accounting?


----------



## MrMatt

Beaver101 said:


> ... of course, it's fair ... why don't you pick it since inception when it was less than $15 ... I can see it as $7.30 since 2003 so BAM/BIP is paying waaaay more than a premium for this company which has survives this long. More than "fair"!
> My point being with their continuous nickel & diming offers, they're just C.H.E.A.P. (alternatively viewed as "predatory") or your version of "it's fair".


I think it's fair when someone offers a price significantly above the current market price.



> Re -repeat your comment from post #783:
> ... so what was that you meant by a messy web of accounting + allocation of capital if that's not creative accounting? Fancy accounting?


"Creative accounting" is a term that suggests accounting reporting that is technically legal, but violates the intent of accounting principals.
I am not suggesting there is any such activity, just that the arrangements, cross ownership etc are confusing. Not wrong, improper or anything of the sort, simply a bit complex and confusing to most people.

FWIW I also find ATCO and CU accounting somewhat confusing.

Complicated and/or confusing is not the same as misleading or nefarious.


----------



## AltaRed

Pembina and IPL are making a full court press in soliciting votes before upcoming shareholder meetings. They are promoting their late June joint presentation and soliciting Yes votes on my FB feed!

I am unsure how to vote my PPL shares While I like some of the obvious things a PPL/IPL combo would bring to the table, I am concerned PPL has been growing (acquiring) too fast and whether some of this stuff is truly accretive. The joint presentation says little about the IPL debt burden they are picking up other than their financial metrics won't be damaged much, i.e. they stay within their own stated parameters.


----------



## AltaRed

MrMatt said:


> "Creative accounting" is a term that suggests accounting reporting that is technically legal, but violates the intent of accounting principals.
> I am not suggesting there is any such activity, just that the arrangements, cross ownership etc are confusing. Not wrong, improper or anything of the sort, simply a bit complex and confusing to most people.
> 
> FWIW I also find ATCO and CU accounting somewhat confusing.
> 
> Complicated and/or confusing is not the same as misleading or nefarious.


I agree there is nothing nefarious about these structures. One way to leverage beyond one's weight is to have publicly traded, but majority owned, subsidiaries where OPM (subsidiary shareholders) fund, via common equity rather than debt) one's expansion plans. Enbridge did that for quite some time before the value proposition of minority shareholders in subs no longer was advantageous (share prices stalled) and institutions didn't like subsidiary share structures. They consolidated back into Enbridge itself.

Atco will continue with their CU subsidiary until the value proposition of OPM no longer makes sense, at which time, they will buy out CU shareholders with a share swap and maybe some cash to entice the deal.

Brookfield is doing no differently other than it is even more complicated. It is one reason why, as a buy and hold investor, I will own the mother ship rather than the subs. The mother ship will leverage OPM via subsidiary shareholders until it no longer suits their purposes, e.g. buying out BPY because share price no longer represented fair value in their eyes. Or they spin off Reinsurance via special dividend into a new unit (BAMR shares exchangeable with BAM.A) to see if they can leverage OPM in that unit. The mother ship must think they can draw in more/new shareholders in that unit. FWIW, I am waiting to see how BAM is going to work that exchange so I can convert my new BAMR shares back to BAM.A shares.


----------



## gardner

I finally sold mine today for $21. I will miss the upcoming dividend so it's effectively $20.52. I also sold my BPY after a bit of a rigmarole -- I am feeling pissed off at Brookfield for f**ing things up right now.


----------



## Beaver101

MrMatt said:


> I think it's fair when someone offers a price significantly above the current market price.


 ... do you know what IPL's current price is? I'm looking at it right now $20.94 (15 minutes delay from 4:02 pm). What's BAM's latest offering? $20.50 ... not even close to $21 CD$ which does not include their partial shares (think they scrapped that). And you consider that as "significantly" above current market price? Wow, what a spin.



> "Creative accounting" is a term that suggests accounting reporting that is technically legal, but violates the intent of accounting principals.


 ... and so?



> I am not suggesting there is any such activity, just that the arrangements, cross ownership etc are confusing. Not wrong, improper or anything of the sort, simply a bit complex and confusing to most people.
> 
> FWIW I also find ATCO and CU accounting somewhat confusing.
> 
> Complicated and/or confusing is not the same as misleading or nefarious.


 ...that's why I asked you to clarify what you meant by "messy " accounting.

I don't know about you, touting it as a great( or nice ?) company but as said, I'm not the least interested in a company with "messy" / confusing accounting either as I'm not that smart.


----------



## Retiredguy

Sold IPL at 18+ a few months ago (loss) and redeployed $ making a double, don't own BIPC, do own 1000 PPL shs and just received plastic wrapped bulky voting package in todays mail. Opened and voted online for it. Entire contents (less personal identifiers) to recycling. Done.


----------



## MrMatt

Beaver101 said:


> ... do you know what IPL's current price is? I'm looking at it right now $20.94 (15 minutes delay from 4:02 pm). What's BAM's latest offering? $20.50 ... not even close to $21 CD$ which does not include their partial shares (think they scrapped that). And you consider that as "significantly" above current market price? Wow, what a spin.


You realize that the reason the current price is high is because they fully expect an even higher offer is coming right?

Yes I consider $20.50 much higher than $15. 



> I don't know about you, touting it as a great( or nice ?) company but as said, I'm not the least interested in a company with "messy" / confusing accounting either as I'm not that smart.


Good, that's a completely reasonable position.
I think Brookfield has shown an excellent ability to provide value. Yes the accounting is confusing, but not insurmountable.

Look at BEP or BIP (my first 2 purchases BTW) it's not that hard to see why they're doing so well.


----------



## Beaver101

MrMatt said:


> You realize that the reason the current price is high is because they fully expect an even higher offer is coming right?


 ... now you get it but doesn't change the fact that BAM/BIP/etc. is the mother of the nickel and diming game.



> Yes I consider $20.50 much higher than $15.


 .. well, yah and much much much higher than $7.30 from 2003. The fantastic premium there as compared to your mention of an "8%" (piddly) premium from the mother of nickels and dimes.



> Good, that's a completely reasonable position.
> I think Brookfield has shown an excellent ability to provide value. Yes the accounting is confusing, but not insurmountable.
> 
> Look at BEP or BIP (my first 2 purchases BTW) it's not that hard to see why they're doing so well.


 ... all the power to you since it works great for you.


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## MrMatt

Beaver101 said:


> ... now you get it but doesn't change the fact that BAM/BIP/etc. is the mother of the nickel and diming game.


Well yeah, that's kind of the point.
They are pushing for a good deal, and they're good at it.


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## doctrine

BIPC offer looks like a done deal at this point. IPL is trading at a discount to BIPC blended offer. It is trading at a massive 8% premium to the PPL offer, showing that it is not being seriously taken and PPL cannot offer the cash that BIPC has. I would probably vote for 100% BIPC shares and take the share premium but I suspect it will be proration'd down.


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## Beaver101

^ 8% is massive compare to how badly they want it ... LOL


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## Borat

What a **** show.


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## Money172375

Is this over now?









Brookfield Infrastructure Wins Its Takeover Battle for Inter Pipeline | The Motley Fool


The global infrastructure giant's latest offer sealed the deal.




www.fool.com


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## doctrine

It's over when enough shareholders tender to the BIPC offer. If they have enough votes, expect the current offer to remain the same. If they can't quite get enough support, then BIPC may need to juice the bid to get across the finish line. Without inside knowledge, it's impossible to say for sure, although I would guestimate it's a 50-50 chance of a higher offer; BIPC may need to offer a little more or some type of concession to bring the IPL board onside. I don't think they need to offer much more though. With IPL slightly below the $20 cash offer price, I am holding to find out.


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## Borat

I voted no to the deal and against every board member for getting the company into this situation lol. Not like my shares will make a difference


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## Testing-Testing-123

Today is the day to make your decision...what choice did you make?

I chose the cash....


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## Beaver101

Default: Do nothing.


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## londoncalling

I chose to hurry up and wait.


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## gardner

Sold my IPL at close to the peak. Now I've started buying PPL with the proceeds.


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## peterk

Congrats folks! I sold it all at $17.x back in the spring.


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## MyCatMittens

peterk said:


> Congrats folks! I sold it all at $17.x back in the spring.


I feel your pain....

*ll Trades & Adjustments*

2 Dec 2020Sell-2,350$13.16CA$9.99-30,916.01


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## doctrine

I sold all my 2000 IPL shares to the market a few weeks ago at $19.95 shortly the IPL board recommended BIPC takeover. It's done like dinner now. In summary, I sold all my original 1080 IPL shares in Feb 20 at $19 after holding for 4 years for little return, and I bought back 1500 shares on 24 Apr 20 at $10.62 and another 500 on 8 Jul at $12.03, allowing me to almost double my shares for about the same amount of capital, before finally selling all 2000 for $19.95. So about a 85% return on my 2nd go around after breaking even on my 1st. My weighted IRR on both holdings is about 13% a year for 5 years compared to roughly 7% on the index. So, not too bad in the end.


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## Money172375

What happens if you do not respond to the Corporate Action Notice?

and, if I do decide to take the BIPC shares, do I need to report the disposition of the IPL in my non-reg as a capital gain? Or only when i sell the BIPC shares?


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## Numbersman61

Money172375 said:


> What happens if you do not respond to the Corporate Action Notice?
> 
> and, if I do decide to take the BIPC shares, do I need to report the disposition of the IPL in my non-reg as a capital gain? Or only when i sell the BIPC shares?


Eventually, Brookfield will exercise it’s right to do a Compulsory Acquisition Transaction and you will receive $20 cash per share. Until that time, it appears that the IPL shares will trade on the TSX. There was a provision in the Takeover Bid Circular for IPL shareholders to defer tax on the sale to Brookfield by electing to receive Exchange LP class B exchangeable limited partnership units, subject to proration.


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## Money172375

Numbersman61 said:


> Eventually, Brookfield will exercise it’s right to do a Compulsory Acquisition Transaction and you will receive $20 cash per share. Until that time, it appears that the IPL shares will trade on the TSX. There was a provision in the Takeover Bid Circular for IPL shareholders to defer tax on the sale to Brookfield by electing to receive Exchange LP class B exchangeable limited partnership units, subject to proration.


Thanks. To avoid cap gains, is that option 3 or 4? What are Exc. LP, class B, units?


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## Numbersman61

Money172375 said:


> Thanks. To avoid cap gains, is that option 3 or 4? What are Exc. LP, class B, units?
> View attachment 22065


Extract from June 4 Notice of Variation “Description of Exchangeable LP Units
The Offer has been structured to provide Canadian Shareholders that are not exempt from tax under the Tax Act with an opportunity, subject to them filing the applicable tax election, to obtain a full or partial deferral of capital gains for Canadian federal income tax purposes on the exchange of their Common Shares for Exchangeable LP Units under the Offer as described in this Notice of Variation, Change and Extension. The Exchangeable LP Units will be issued by Exchange LP and will be exchangeable at any time on a one-for-one basis, at the option of the holder, for BIPC Shares, subject to their terms and applicable Law. An Exchangeable LP Unit will provide a holder thereof with economic terms that are substantially equivalent to those of a BIPC Share.”
In order to defer capital gains, You can choose either option 3 or 4 (with Option 3 you receive cash for balance of consideration due to pro-rationing). These are my views; carefully review Documents and check with advisor for certainty.


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## Money172375

Seems I need to file a Joint tax Election to avoid Cap gains.

anyone know how and when to do that?


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## Numbersman61

Money172375 said:


> Seems I need to file a Joint tax Election to avoid Cap gains.
> 
> anyone know how and when to do that?


You must read the June 4 Notice of Variation. Here is an extract: 
”To make a Joint Tax Election, an Electing Shareholder must provide the relevant information to Exchange GP through a website that will be made available for this purpose, including: (i) the required information concerning the Electing Shareholder; (ii) the details of the number of Common Shares exchanged in respect of which the Electing Shareholder is making a Joint Tax Election; and (iii) the applicable Elected Amounts for such Common Shares. The relevant information must be submitted to Exchange GP through the website on or before the day that is 60 days after the Expiry Time (the ''Joint Tax Election Deadline''). Exchange GP may not make a Joint Tax Election with an Electing Shareholder who does not provide the relevant information through the website on or before the Joint Tax Election Deadline. After receipt of all of the relevant information through the website, and provided that the information provided complies with the rules under the Tax Act described above, Exchange GP will deliver an executed copy of the Joint Tax Election containing the relevant information to each Electing Shareholder. Each Electing Shareholder will be solely responsible for executing its portion of the Joint Tax Election and submitting it to the CRA (and, where applicable, to any provincial tax authority) within the required time. In order to avoid late filing penalties, the Joint Tax Election is required to be filed with the CRA (and, where applicable, with any provincial tax authority) on or before the earliest of the days that any member of Exchange LP is required to file a Canadian federal income tax return for the member's taxation year in which the exchange to which the election relates occurs. This could be as early as 90 days after the Expiry Time if any member of Exchange LP is a testamentary trust having a taxation year ending on such date. Accordingly, Electing Shareholders wishing to make a Joint Tax Election should consult their own tax advisors without delay and should provide the relevant information to Exchange GP through the website as described above as soon as possible.
A Joint Tax Election will be valid only if it meets all the applicable requirements under the Tax Act (and any applicable provincial tax legislation) and is filed on a timely basis. These requirements are complex, are not discussed in any detail in this summary, and meeting these requirements with respect to preparing and filing the Joint Tax Election will be the sole responsibility of the Electing Shareholder. None of Exchange LP, Exchange GP or any of the members of Exchange LP will be responsible for the validity, proper completion or timely filing of a Joint Tax Election, or for any taxes, interest, penalties or other consequences under the Tax Act (or applicable provincial tax legislation) in respect thereof. Electing Shareholders wishing to make a Joint Tax Election should consult their own tax advisors without delay.”


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## Money172375

Numbersman61 said:


> You must read the June 4 Notice of Variation. Here is an extract:
> ”To make a Joint Tax Election, an Electing Shareholder must provide the relevant information to Exchange GP through a website that will be made available for this purpose, including: (i) the required information concerning the Electing Shareholder; (ii) the details of the number of Common Shares exchanged in respect of which the Electing Shareholder is making a Joint Tax Election; and (iii) the applicable Elected Amounts for such Common Shares. The relevant information must be submitted to Exchange GP through the website on or before the day that is 60 days after the Expiry Time (the ''Joint Tax Election Deadline''). Exchange GP may not make a Joint Tax Election with an Electing Shareholder who does not provide the relevant information through the website on or before the Joint Tax Election Deadline. After receipt of all of the relevant information through the website, and provided that the information provided complies with the rules under the Tax Act described above, Exchange GP will deliver an executed copy of the Joint Tax Election containing the relevant information to each Electing Shareholder. Each Electing Shareholder will be solely responsible for executing its portion of the Joint Tax Election and submitting it to the CRA (and, where applicable, to any provincial tax authority) within the required time. In order to avoid late filing penalties, the Joint Tax Election is required to be filed with the CRA (and, where applicable, with any provincial tax authority) on or before the earliest of the days that any member of Exchange LP is required to file a Canadian federal income tax return for the member's taxation year in which the exchange to which the election relates occurs. This could be as early as 90 days after the Expiry Time if any member of Exchange LP is a testamentary trust having a taxation year ending on such date. Accordingly, Electing Shareholders wishing to make a Joint Tax Election should consult their own tax advisors without delay and should provide the relevant information to Exchange GP through the website as described above as soon as possible.
> A Joint Tax Election will be valid only if it meets all the applicable requirements under the Tax Act (and any applicable provincial tax legislation) and is filed on a timely basis. These requirements are complex, are not discussed in any detail in this summary, and meeting these requirements with respect to preparing and filing the Joint Tax Election will be the sole responsibility of the Electing Shareholder. None of Exchange LP, Exchange GP or any of the members of Exchange LP will be responsible for the validity, proper completion or timely filing of a Joint Tax Election, or for any taxes, interest, penalties or other consequences under the Tax Act (or applicable provincial tax legislation) in respect thereof. Electing Shareholders wishing to make a Joint Tax Election should consult their own tax advisors without delay.”


I guess what I’m looking for then is a ……”website that will be made available for this purpose”


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## londoncalling

Exited this week at $20.00 in my LIRA account. Already own Brookfield Infrastructure in my RRSP account and didn't want to be left with a mix of shares and cash in one account and shares in another. If I decide to buy Brookfield it will be a consolidated position.


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## Money172375

Did anyone convert their IPL to Brookfield Infrastructure Corporation Exchange LP? I chose this option as it allowed cap gains to be deferred.

I see the new shares/units in my TDDI account but the “buy/sell” buttons are not available And there is no ticker listed. TDDI seems to be tracking its price though.

any idea what the correct ticker is and why the full details/options are missing online at TDDI?


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## Money172375

Hers what Brookfield told me: There is no ticker symbol associated with the Exchangeable LP Units, as the Units are not listed or quoted on a stock exchange and are not transferable. If you wish to sell or dispose of your Units, you will have to exchange them for BIPC Shares first and then sell the latter.

so my next question is: does switching from the exchangeable LP units to BIPC trigger a taxable event?


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## Money172375

Money172375 said:


> Hers what Brookfield told me: There is no ticker symbol associated with the Exchangeable LP Units, as the Units are not listed or quoted on a stock exchange and are not transferable. If you wish to sell or dispose of your Units, you will have to exchange them for BIPC Shares first and then sell the latter.
> 
> so my next question is: does switching from the exchangeable LP units to BIPC trigger a taxable event?


Found the answer. Exchanging the LP units to BIPC is a taxable transaction.


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## londoncalling

Brookfield Infrastructure completes acquisition of Inter Pipeline; IPL to be delisted (msn.com)


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## Beaver101

^ Yep, got my $20/share in various accounts.


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## Money172375

I elected to take my IPL shares and accept the transfer Brookfield Infrastructure Corp Exchange Units. 

I completed the my tax election forms last year and submitted them to the tax office as instructed by Brookfield. This should allow me to defer my capital gains until I sell the Brookfield units.

do I simply ignore the IPL transactions that appear on my T5008 And not include them on my return?


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## Numbersman61

Money172375 said:


> I elected to take my IPL shares and accept the transfer Brookfield Infrastructure Corp Exchange Units.
> 
> I completed the my tax election forms last year and submitted them to the tax office as instructed by Brookfield. This should allow me to defer my capital gains until I sell the Brookfield units.
> 
> do I simply ignore the IPL transactions that appear on my T5008 And not include them on my return?


You report the transaction on Schedule 3. The proceeds of disposition are the elected amount plus any cash you may have received. The ACB of the units you received is the elected amount.


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## Money172375

Numbersman61 said:


> You report the transaction on Schedule 3. The proceeds of disposition are the elected amount plus any cash you may have received. The ACB of the units you received is the elected amount.


I didn’t get any cash from what I recall, but I’ll double check. I think it was a straight up share exchange.


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