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Deal Addict
Jul 28, 2009
1331 posts
272 upvotes
favelle75 wrote:
Nov 14th, 2016 12:10 pm
Yield is getting close to 4%. That's when I bite.
4% is $20.25, you might be waiting awhile haha. That is IPO price pretty much!
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User avatar
May 25, 2008
1303 posts
480 upvotes
Mississauga
PunPryde wrote:
Nov 14th, 2016 12:51 pm
4% is $20.25, you might be waiting awhile haha. That is IPO price pretty much!
Definitely possible. We don't know where interest rates are headed, but if this is the start of a secular rise in rates, the yield can easily blow past 4%. Everyone here is accustomed to low, low rates. In a more normal rate environment, yields that we see today in blue chip large cap utilities i.e. 3-4% range can normalize to 5-6%. EMA, FTS and ENB yielded >6% in the mid 90's.
Deal Addict
Jul 28, 2009
1331 posts
272 upvotes
STP123 wrote:
Nov 14th, 2016 1:24 pm
Definitely possible. We don't know where interest rates are headed, but if this is the start of a secular rise in rates, the yield can easily blow past 4%. Everyone here is accustomed to low, low rates. In a more normal rate environment, yields that we see today in blue chip large cap utilities i.e. 3-4% range can normalize to 5-6%. EMA, FTS and ENB yielded >6% in the mid 90's.
I would love that, bring it on! Mortgage is locked in at 2.24% and holding alot of cash, gimmie those cheap high divy equities baby!
Deal Addict
User avatar
May 25, 2008
1303 posts
480 upvotes
Mississauga
PunPryde wrote:
Nov 14th, 2016 1:44 pm
I would love that, bring it on! Mortgage is locked in at 2.24% and holding alot of cash, gimmie those cheap high divy equities baby!
On that point, anyone thinking of getting a mortgage will need to keep an eye on the Canada 5yr bond rate. Its jumped from 0.7% to almost 1% in a matter of days. Your 2.24% is worth money now that the 5 yrs bond has spiked. It should be just a matter of time before lenders increase their 5 year fixed rates.
Deal Fanatic
Nov 24, 2013
5085 posts
1691 upvotes
Kingston, ON
Some price targets popped up, reiterated at $26 by the agencies. Feels like it'll be a while to get back up there at this rate though.
Newbie
Nov 10, 2014
29 posts
3 upvotes
Ottawa, ON
What do you guys think about the political risk associated with Hydro One?
Its no secret that privatization is wildly unpopular and PCs and NDs will attack the Libs over this all of the next election cycle.
I myself think privatization of H set a new high bar for Wynne's stupidity, and bought shares as a hedge from being boned by increasing hydro bills.
I am wondering what the odds are for the next Ontario gov. to repurchase the privately held shares, and if so, for what price.
With the government still owning ~70% of shares, doesn't that leave private holders in a precarious spot?
Member
Jun 28, 2016
267 posts
139 upvotes
Tadalafil wrote:
Nov 19th, 2016 8:50 pm
What do you guys think about the political risk associated with Hydro One?
Its no secret that privatization is wildly unpopular and PCs and NDs will attack the Libs over this all of the next election cycle.
I myself think privatization of H set a new high bar for Wynne's stupidity, and bought shares as a hedge from being boned by increasing hydro bills.
I am wondering what the odds are for the next Ontario gov. to repurchase the privately held shares, and if so, for what price.
With the government still owning ~70% of shares, doesn't that leave private holders in a precarious spot?
If Ontario decides to repurchase the shares, then holding onto them is a terrible idea. After all, the Ontario government (as it owns 70% of the company) has many ways to crater the share price without effecting its bottom line. What would Hydro One shares be worth if the government decided to cut electricity prices in half and eliminate Hydro One's dividend? After doing so, they could reacquire the shares for pennies on the dollar.

Personally, I think that sort of scenario is highly unlikely, and all utilities are subject to political risk, but, if you actually think the government will seriously try to reacquire the shares, then you should find a safer dividend payer.
Deal Expert
User avatar
Sep 19, 2004
21628 posts
3806 upvotes
Waterloo
unexpected -1.6% drop today with TSX open (and US closed)
$23.25-$22.83

Thoughts? volume is normal for now ~200K 1.5 hrs in (average ~400K)

I have orders in for $22.5
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Penalty Box
Mar 28, 2007
2873 posts
358 upvotes
jerryhung wrote:
Nov 24th, 2016 10:52 am
unexpected -1.6% drop today with TSX open (and US closed)
$23.25-$22.83

Thoughts? volume is normal for now ~200K 1.5 hrs in (average ~400K)

I have orders in for $22.5
Probably something to do with the upcoming announcement from Tory - privatization of Hydro One is dead.
Positive Investing!
Sr. Member
Feb 1, 2015
608 posts
133 upvotes
MB
Not interested in buying it back at that price. I would expect this one to go below $22.
Deal Expert
User avatar
Sep 19, 2004
21628 posts
3806 upvotes
Waterloo
blackdragon12 wrote:
Nov 24th, 2016 11:05 am
Probably something to do with the upcoming announcement from Tory - privatization of Hydro One is dead.
I believe that is [Toronto Hydro], not [Hydro One]

anyway.. FTS or CU are also down ~0.8% so Utilities are hit today
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Sr. Member
Apr 12, 2012
799 posts
183 upvotes
Toronto
Anything below 21 would be really attractive. Right now @ 22.81 it's alright, but there are better choices out there like the telecoms
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Deal Addict
Aug 17, 2008
1382 posts
644 upvotes
MrMom wrote:
Nov 10th, 2016 3:00 pm
ZBZ6 may push lower into the 3pm close. Put in a bid @ $22.60 on H

I see my risk as $21.53 from Dec 8/15 low, so just over $1.00

Update: Filled. US cash bond mkt closed tomorrow. That pretty much thins out all global bond mkts, so that may limit the downside due to interest rate risk. ER s/b in line. Just have Trump proclamation/headline risk.
* Nov 10 & 11 *
MrMom wrote:
Nov 11th, 2016 8:13 am
Headline #'s beat ($0.39 act > $0.31 exp and $1.70B act > $1.60B exp), but just from the press release, some of the increases in revenue and decreases in cost may not be repeatable each Q.

"Revenues, net of power costs, for the third quarter were higher than last year by 6.0% primarily reflecting changes to the Ontario Energy Board approved distribution rates, and higher peak transmission demand due to warmer weather in 2016, partially offset by the divestiture of Hydro One Brampton in August 2015."

"In addition to the items impacting revenue noted above, year-to-date earnings were positively affected by lower bad debt expense, lower costs relating to support services, lower costs associated with transformer equipment refurbishments and stations maintenance, and lower expenses due to the divestiture of Hydro One Brampton."
Just an update and not talking my book. Sitting and clipping the coupon until the next ER on Feb 10 (bmo) or a bond melt up/equity meltdown. I still see the major headwind is a need for the infrastructure to be updated and not the gov't in charge. Gov'ts can be voted out, capex can't be ignored forever.

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Member
Dec 2, 2014
414 posts
141 upvotes
London, ON
STP123 wrote:
Nov 14th, 2016 1:57 pm
On that point, anyone thinking of getting a mortgage will need to keep an eye on the Canada 5yr bond rate. Its jumped from 0.7% to almost 1% in a matter of days. Your 2.24% is worth money now that the 5 yrs bond has spiked. It should be just a matter of time before lenders increase their 5 year fixed rates.
I'm pre-approved at RBC for 5 years at 2.39% . I got a text last week telling me he can't hold that rate past February 16th if I can't find a place by then.

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