Entering text into the input field will update the search result below

TransAlta: The Shareholders Have Spoken & TransAlta Closes On Initial Investment From Brookfield Renewable Partners

Philip MacKellar profile picture
Philip MacKellar


  • Why the position was doubled in December 2018.
  • Brookfield and TransAlta battle Mangrove Partners and Bluescape Energy Partners.
  • The annual general meeting results are in and Brookfield wins.
  • Insiders pad their positions adding support to a positive outlook.
  • The changing political landscape in Alberta and Canada may present investors with uncertainty.


TransAlta (NYSE:TAC) is an electrical utility with a significant installed base in Alberta. It also has assets in the United States, Australia, and other Canadian provinces. TransAlta’s portfolio is comprised of coal and natural gas, as well as hydro, wind, and other renewables. In addition to trading on the NYSE, it is listed on the Toronto Stock Exchange under the symbol TA. The stock’s current yield is roughly 1.8%. The enterprise also offers half a dozen preferred shares for income focused investors, and is the parent company of TransAlta Renewables (OTC:TRSWF), which has a yield over 6.75%. Though it has many peers, its closest publicly traded competitor is Alberta-based Capital Power Corporation (OTCPK:CPXWF).

At Contra the Heard Investment Newsletter, we first purchased TransAlta in December 2014 at CAD $9.81; that purchase was far too early. Since then, the utility has reduced its dividend and the shares have fallen. In December 2018, we purchased again, and doubled our original position at a price of CAD $6.95. As a result, the average cost base is now CAD $8.38. (For full disclosure, I also own some of the preferred shares personally, as do the principals at Contra the Heard).

Why the position was doubled in December 2018:

We doubled our position in December for a variety of reasons. The first one was because the turnaround plan made sense to us and it appeared to be gaining traction, albeit slowly. The turnaround called for a variety of measures, including:

  • Improving the balance sheet and reducing leverage
  • Improving operational performance and reducing operating costs through internal programs like Project Greenlight
  • Transitioning away from coal and towards gas and renewables
  • Preparing for Alberta’s 2021 shift from an energy to a capacity market
  • Replenishing its development pipeline

In December, we felt TransAlta was making progress on

This article was written by

Philip MacKellar profile picture
Philip MacKellar is an analyst, portfolio manager, and investor at Contra the Heard Investment Newsletter. He has been with the company since 2011 and has been investing since 2004. The newsletter’s primary focus is on contrarian and value-oriented investment opportunities traded in the United States and Canada. In addition, Philip sometimes engages in M&A, other special situations, and holds bonds, preferred shares, and convertible securities. Contra the Heard is a Toronto based company and was founded in 1995. Philip also blogs about personal finance topics on his own website called mymoneymoves.ca in his free time. You can also follow Philip at the Globe & Mail, on Twitter @Rallekcam, and catch him on YouTube at Contra the Heard.

Analyst’s Disclosure: I am/we are long TAC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.