Delojozafado

Ontario Green Energy Act: What Can Alt Energy Legislation Do for Investors?

We find today 3/18 that one week before (on 3/9) the above mentioned "NCIB" share buy back announcement of yesterday, Toronto's Clarus Securities initiated coverage of GLH.un. Ms Carolina Vargas their research analyst covering the units rated them a "Buy" with a "target" price of "$18.50CD". It makes you wonder what gets whispered "aboot" and what notes end up on the napkins at some cock tail parties? GLH.UN made it's latest 52 week low the next day 3/10. Well a 3% move higher in the last two days is nice if you own these units. Perhaps we are going to and have already seen some institutional participation in the purchasing of these units as a result of the Clarus pronouncement. The price is now already 80 Loonie cents higher from the the 3/10 low and the "NCIB" does not commence until tomorrow.

Ontario Green Energy Act: What Can Alt Energy Legislation Do for Investors?

GLHIF announces "a normal course issuer bid" plan to purchase 1 million units on the TSX commencing Thursday, 3/19.

Only half the float of ~54 million units will be available to be purchased as the +50% of the units held by ((BAM) subsidiary Brookfield Renewable, will be held off the market until 3/18/10 when the offer/purchase program is scheduled to end.

We can expect unit valuation to benefit and most likely achieve the likely management target of at least $16CD which is what the $75CD Million recent BDF closed at this past Dec. The completion of the elimination of 1 million shares will most likely cost the trust around $16CD Million. It will eliminate $1,2CD million in distributions. The long term prospect will be extra capital for the trust to acquire additional generating capacity. Together with the new recent acquisition of new producing assets that became accretive in Feb, cash flow should be positive enough going forward post the buy back to at some point provide for a modest distribution increase? It would seem that these units would now have a new medium term target price. Based on +$15CD million bidding for 1/2 the float of units, $16.50 CD to $18CD would seem likely. The shares were up over 2% yesterday and by mid afternoon today have moved higher by near 1% today. At $12.19 US dollars this secuity has a 6.8% effective yield@ .788 on the Exchange. If the Loonie reclaims .83 to .85 as many market & currency strategists expect the effective yield against the cost basis would rise to over 7%. The unit price would also reflect an improvement in valuation as well on a stronger Loonie. Pretty good Whale following (Bruce Flatt) opportunity.

Ontario Green Energy Act: What Can Alt Energy Legislation Do for Investors?

Toronto being on the windward side of Lake Ontario is more effected by snow off of Lake Huron, approximately 100 miles to the east. Far enough away to mitigate lake effect snow. This issue is mostly resolved by placing the solar modules on stilts above the average snow accumulation levels. By their nature the generating cells will face towards the south and be at an angle that allows for snow to slide or be blown off by the wind. The action of the sun accelerates not just melting but sublimation as well. There are 4 ft high snow banks on the sides of the roads where I live in NH. There is nothing but mud on the other side of the road where the sun shines all day long. You would think that heat pumps would not be practical in Northern New England but they are popular back ups to fossil fueled boilers. The heat pump with an A/C function can operate effectively 9 months of the year cutting the annual oil bill dramatically. Of course for a fistful of dollars or even a few dollars more you can get a geothermal heat pump system that discharges 150-160' F air flow from the last pass of the condenser all winter long.


On Mar 09 10:21 AM fg144331 wrote:

> I would think that any solar on roof tops in Toronto might suffer
> from SNOW.
>
> A shame that most of these stocks are on the Pink Sheet,
> a poor exchange in my view.

Ontario Green Energy Act: What Can Alt Energy Legislation Do for Investors?

A pretty nice +2.8% move up in GHLIF today, Eh? Over all market down and the Loonie only advancing half a penny. So this is most likely strength on the merit of the equity? Are they finally coming to their senses? Some one has decided to start paying a little more for this gem.

There is certainly a lot of confusion about pink sheets. Since Archipelago merged with the Nasdaq or was it the NYSE, the pink sheet listings are just a convenient way for US traders to now access companies listed on Foreign exchanges that do not have US ADRs. VWDRY is the world's oldest and most prominent wind turbine manufacturer. Of course trying to do an online $8 trade on the Copenhagen stock exchange may be difficult. You might get your broker to do the trade on the phone for $35, but they are probably not going to make it a comfortable easy trading experience. One should not confuse pink sheets with the bulletin board listings.

In the case of GLHIF the volume we see is just the US volume. The average volume of ~25,000 shares for GLH-UN.TO includes the US volume which is all merged electronically even calculating the exchange rate to the pip. There is actually no liquidity issue at all owning these stocks as there is more than adequate volume for fair price discovery. US companies that are pink listed are of course a different story.

Ontario Green Energy Act: What Can Alt Energy Legislation Do for Investors?

The environmental disaster in the Mackenzie river basin has been going on for more than 3 years now. It was further expanding into Saskatchewan of late. The drill baby drill mentality. Limbaugh, O'Reilly, and Kudlow expect to be more popular than ever. The big lie is more powerful than ever in America. "It" what ever it is but especially a systematic failure, is always someone else's fault. A poster on this blog refers to "lefties". Clearly more O'Reilly and less reality is what will lead America forward to become an ever greater force in the global economy of 7 Billion people.

Ontario Green Energy Act: What Can Alt Energy Legislation Do for Investors?

Sandy Koulfax was an accomplished lefty.....

The GLHIF/GHH-UN.TO is a huge opportunity to get some fabulous returns . Bruce Flatt's (BAM) recent investment through a BDF coupled with the overall weakness in the stock markets have depressed this fabulous utility trust's price to ridiculous new lows not seen in years. Adding to this unit's price weakness is the on going 1st quarter weak Hydrology/Hydrometry. Now we see this situation developing which is basically related to the carbon credits economic incentive trend. While of a different nature the thrust is the same. To economically advantage through development & tax policy "Green" energy. On top of all these issues that have created this buying opportunity we now see the Loonie teeter totting back and forth over the .80 mark.

GLHIF has just reported a record for production in the past 2008 year end results. Record production led to Record Gross and net revenues. With the 1st quarter hydrology coming to an end and the addition of $65MM/CD in new generating Wind and hydro capacity, it is very likely we are going to see some more strong production results going forward through the remainder of 2009. There will be lesser and less dominate High pressure weather in the hydro electric generating topography of GLHIF over the next 3 quarters. We are going to see the end of snow in conjunction with the melting of snow pack, adding to production.

An increase in the distribution is a lot more likely than any reduction in the near term. With yesterday's ex date knocking the unit price down another 12-15 cents a share we are seeing an opportunity to invest in this great income trust well below the Flatt entry of pre-dilution $16/unit in last Dec's BDF. The price is way down but the distribution is strong and sustainable! We currently see an 8.3%/7.0% effective distribution rate for both tax sheltered and non-tax sheltered accounts. With a non-tax sheltered investment the difference as a result of the Canadian with holding can be recovered with a foreign tax credit.

We have Mark Zandi, Moody's Chief economist calling Canada, "The best managed economy on earth". This was reiterated this morning on the Bloomberg web site in a story on Canada having the world's strongest banking system. Further we have Mr Dennis Gartman 4 weeks ago declaring himself "long of all things Canadian".

A move by Canada's commodity centric economy's currency back to 50% of the recent 52 week high would take these shares and more significantly the distributions 12% higher from todays valuations. That would be a 7.8% effective distribution yield! The shares recovering 50% of their 52 week high would be reasonably expected to rise to 18.5 Canadian dollars from the current $15.10.

Time to Buy!!!!!