TransAlta (Symbol-TA)

Discuss your favourite picks, broker, and trading or investment style.
User avatar
Shakespeare
Veteran Contributor
Veteran Contributor
Posts: 23396
Joined: 15 Feb 2005 23:25
Location: Calgary, AB

Re: TransAlta (Symbol-TA)

Post by Shakespeare »

Off my list, but continues to die.

New low today; currently $6.63.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
rhenderson
Contributor
Contributor
Posts: 468
Joined: 22 Jan 2007 13:38

Re: TransAlta (Symbol-TA)

Post by rhenderson »

Well, here's someone that thinks it's a buy and outlines his reasons.

http://www.fool.ca/2015/08/17/3-reasons ... on-shares/

I did buy the preferreds, TA.PR.J because even though they will probably cut the common dividend again
the prefs should be ok . If they do suspend all dividends, the prefs are still cumulative but as long as the
money keeps coming in from the other operations wouldn't the prefs be safe ?

Any thoughts or insight would be appreciated. :?
Dudsy
Contributor
Contributor
Posts: 187
Joined: 26 Jan 2009 10:39

Re: TransAlta (Symbol-TA)

Post by Dudsy »

I bought a small amount of the same issue (TA.PR.J) a couple of days ago. It's my only holding of fixed-resets. The current yield is high (almost 10%), and the reset date isn't for another 4 years. Even if 5 year rates don't rise over that timeframe, this issue will still reset with a yield of over 8% (based on current pricing).

Transalta free cash flow this year is around $275 million. I don't see a risk to the prefs for the next 5 years. However, they will need to replace earnings from some their coal units after 2020, which could become a longer-term issue. Something to keep an eye on. It will also be difficult for them to grow as their cost of capital has risen considerably. I would recommend keeping any allocation to TA small.

One interesting thing I've been looking at lately is the relationship between TransAlta Renewables (RNW) and TA. RNW's market cap is around $2.1B. TA owns 76% of RNW which translates to around $1.6B of value. TA's market cap is $1.8B. Does this mean, if you strip out their ownership of RNW, the entire value of the rest of TA's business on only $200m? Does anyone know if I'm missing something here? Long/short strategies have proven to be some of my most profitable trades in my investing career.
like_to_retire
Veteran Contributor
Veteran Contributor
Posts: 5923
Joined: 27 Feb 2005 07:14
Location: Canada

Re: TransAlta (Symbol-TA)

Post by like_to_retire »

Dudsy wrote:One interesting thing I've been looking at lately is the relationship between TransAlta Renewables (RNW) and TA. RNW's market cap is around $2.1B. TA owns 76% of RNW which translates to around $1.6B of value. TA's market cap is $1.8B. Does this mean, if you strip out their ownership of RNW, the entire value of the rest of TA's business on only $200m? Does anyone know if I'm missing something here?
If you read rhendersons link above, you'll see about the same conclusion:

TransAlta now owns a 76% share of Renewables, which is worth $5.20 per share based on the book value of Renewables. If you base the value on the market cap of Renewables, the stake is worth $6.17 per share.

Any way you slice it, the stake in Renewables makes up a very large percentage of TransAlta’s current market value. It’s like I’m getting a stake in Renewables, with TransAlta’s coal business almost thrown in for free.


ltr
rhenderson
Contributor
Contributor
Posts: 468
Joined: 22 Jan 2007 13:38

Re: TransAlta (Symbol-TA)

Post by rhenderson »

Dudsy wrote:I bought a small amount of the same issue (TA.PR.J) a couple of days ago. It's my only holding of fixed-resets. The current yield is high (almost 10%), and the reset date isn't for another 4 years. Even if 5 year rates don't rise over that timeframe, this issue will still reset with a yield of over 8% (based on current pricing).

Transalta free cash flow this year is around $275 million. I don't see a risk to the prefs for the next 5 years. However, they will need to replace earnings from some their coal units after 2020, which could become a longer-term issue. Something to keep an eye on. It will also be difficult for them to grow as their cost of capital has risen considerably. I would recommend keeping any allocation to TA small.
Perhaps I did commit to more than I should have by buying 2000 at an average of 16.5 but if they don't drop any further I should break even in about 2 years. Thanks for your take on the situation, all my other sources also seem to believe that the dividend is safe for the foreseeable future.
Dudsy
Contributor
Contributor
Posts: 187
Joined: 26 Jan 2009 10:39

Re: TransAlta (Symbol-TA)

Post by Dudsy »

Dollarama Inc. (DOL) will replace TransAlta Corporation (TA) in the S&P/TSX 60 Index.

Probably shouldn't be a surprise... market cap DOL=$9.7B vs TA=$1.6B

http://www.marketwatch.com/story/sp-dow ... 2015-09-04
Thegipper
Veteran Contributor
Veteran Contributor
Posts: 3477
Joined: 14 Mar 2015 16:58

Re: TransAlta (Symbol-TA)

Post by Thegipper »

rhenderson wrote:
Dudsy wrote:I bought a small amount of the same issue (TA.PR.J) a couple of days ago. It's my only holding of fixed-resets. The current yield is high (almost 10%), and the reset date isn't for another 4 years. Even if 5 year rates don't rise over that timeframe, this issue will still reset with a yield of over 8% (based on current pricing).

Transalta free cash flow this year is around $275 million. I don't see a risk to the prefs for the next 5 years. However, they will need to replace earnings from some their coal units after 2020, which could become a longer-term issue. Something to keep an eye on. It will also be difficult for them to grow as their cost of capital has risen considerably. I would recommend keeping any allocation to TA small.
Perhaps I did commit to more than I should have by buying 2000 at an average of 16.5 but if they don't drop any further I should break even in about 2 years. Thanks for your take on the situation, all my other sources also seem to believe that the dividend is safe for the foreseeable future.[/quote
high dividends can be a red flag and a trap for the unwaring . This has been the case with this stock. If you do any decent fundamental analysis would realize this is not an attractive stock. It seems you are hoping for a change in it's trend. I don't see how that will come about.
nisser
Veteran Contributor
Veteran Contributor
Posts: 2079
Joined: 11 Nov 2007 21:24

Re: TransAlta (Symbol-TA)

Post by nisser »

Lots of sheep out there. Notley pretty much murders the company's long term prospects over the weekend, commiting a large number of TAs factories to eventual death in less than 15 years and the stock bounces 10% because a bank upgrades it from a sell rating
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: TransAlta (Symbol-TA)

Post by AltaRed »

nisser wrote:Lots of sheep out there. Notley pretty much murders the company's long term prospects over the weekend, commiting a large number of TAs factories to eventual death in less than 15 years and the stock bounces 10% because a bank upgrades it from a sell rating
I agree Notley's plan is toast for this company, albeit I think it is the renewables announcement today that caused the stock bounce. There is a possibility that TA will eventually be TU (teats up) and the surviving company will be the renewables company.

Until then, TA will milk the facilities for what they can get out of them, at least some of them being under PPAs with other power sellers like ALA and TRP. For example, two of TA's Sundance units have 50/50 PPAs with TRP and ALA for the electricity generated off those units. TA is just the generator. I believe these PPAs expire circa 2020 but that does not mean TRP and/or ALA will not negotiate additional years while they either build their own new generation or contract from a number of other suppliers after that.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
ig17
Veteran Contributor
Veteran Contributor
Posts: 3418
Joined: 21 Feb 2005 20:54

Re: TransAlta (Symbol-TA)

Post by ig17 »

nisser wrote:Lots of sheep out there. Notley pretty much murders the company's long term prospects over the weekend, commiting a large number of TAs factories to eventual death in less than 15 years and the stock bounces 10% because a bank upgrades it from a sell rating
Meanwhile, Capital Power dropped 10%. Go figure. 20% swing on the same day.

Going by memory, CPX has a newer fleet of coal plants with longer projected lives. They probably have more to lose. Still -10% / +10% is just bizarre.
bindexit
Contributor
Contributor
Posts: 661
Joined: 24 Feb 2007 13:43

Re: TransAlta (Symbol-TA)

Post by bindexit »

I've read many negative opinions on this one. I feel like blogging my thoughts on this one as I am on the fence of whether to unload. I am a very novice investor and far from an expert but I enjoy stock picking.

I started buying at $6.10. I rarely delve deep into my analysis due to lack of strength in assessing qualitative and quantitative factors such as:
-reviewing in depth financials
-corporate governance
-assessing market, industry, competition
-forecasting future revenue, profit
-assessing impact of factors such as government legislation (e.g. phasing out coal plants)

I am not good at these things. Yup, it is a major flaw and get burned often times after my purchase.

I do however use basic screening techniques and enjoy very much this aspect of investing. I bought initially using google stock screener for low p/b and low p/s. That's my first screen technique. Before finalizing purchase, I look at the first summary page of my broker's Reuters financial statements (called TR Profiles). My broker's most recent TR Profiles for Transalta is September 30, 2015 (please verify numbers yourselves to be sure) and the summary page showed:
-P/B 0.54
-P/S 0.51
-Earnings 0.52
-P/E 9.16
-BV 11.94
-Cash (MRI) 0.21
-QR 0.55
-CR 0.59
-LT DT/EQ 1.01
-Tot DT/EQ 1.24

This snapshot in time looks mostly good to me. When I seek a p/b of less than 1, I find most businesses usually have trouble somewhere (e.g. it is paying too high a dividend to support, it is losing money, etc). The snapshot above shows Transalta made money (=0.52); trading less than book value (=0.54); and has cash (=0.21). I rarely pay attention to the dividend numbers because I want to see if the business makes money first or has hidden value. I see from this summary that the risks with Transalta are having high debt (LT and TD ratios over 1), and QR,CR less than one.

I am now finally deciding to try and delve deeper into this one. I wondered if others can point me in the right direction on these items:

1. I read somewhere that Transalta has an investment in TransAlta Renewables Inc (TSE:RNW). By looking only at the Reuters TR Profile document of 12 pages, I can't seem to find it on the balance sheet (Page 7). Can someone point to me where it appears on the balance sheet and what is the $ value of the investment I guess as at Sept 30, 2015? I assume that the overall assets section include this RNW investment if there....

2. The balance sheet as of Sept 30, 2015 summarizes Total Assets $10,756 and Total Liabilities $7,303. I have an accounting question related to the remaining section which is Total Equity $3,453. In this Total equity section, I can't seem to understand the concept for the entries of common stock and preferred shares. Does it mean Transalta actually own shares of their common stock and worth $3,056? and it forms part of the common 281 million shares outstanding (number shown at bottom)? Similarly, does it mean same for preferred shares $942? Yup, I have difficulty with Total Equity section even after reading investopedia and reason why I stick to summaries. If anyone can shed light, it would be appreciated. Also, is the RNW appearing in here? I doubt it.

3. I seek P/B less than 1 in hopes of buying something for less than what it is worth. I know though it is more complicated than that and in depth balance sheet analysis of assets and debts is necessary. Some value investors are able to do this "net-net" analysis (Norm R. and Oddballstocks.com) but I am not good at that either. Is there a "free" website which shows the net-net value of Transalta on a regular basis?

I wonder if some experienced investor could walk me through and show a net-net analysis of this one as an example. I think a formula is used to assess value of assets if liquidated today like cash is 100%, selling equipment is another percentage, etc. I know these percentages are estimates and can be difficult. I wonder how they arrive at these percentages.

4. My broker has a website section with forecasted annual earnings for Transalta through to 2019 (shown below).
2015: 0.01
2016: 0.12
2017: 0.14
2018: 0.21
2019: 0.19

Is this a consensus from analysts or forecasts from Transalta itself? (.....again please check numbers yourselves):

A friggin' penny per share in 2015! The next years do not look good ....unless I am interpreting wrong. I wonder if factors like the phaseout of coal plants (or outdated infrastructure) is a major factor for this downward trend?

I like to use earnings in calculating another metric test. It is probably very flawed but I use a capitalization rate technique of 10% to look at past earnings over time and compare to the actual stock price. So for 0.52 earnings times 10, $5.20 looks good. Going forward, the penny earning times 10 looks real bad. For 2019, the $1.90 looks also bad compared to price today. The future numbers tell me that the current share price (between $4 and $5) is overvalued unless again I am not seeing something. The business needs to make more money to support share price, n'est-ce pas?

I would dump these shares today if it were the case....but Predictions are difficult, especially if it is about the future:) That is why I tend to place more importance in copycatting known value investor purchases when confronted with this metric of forecasted future earnings. I mean is it possible that these analysts have a motive to dupe the common guy?

I just wonder what references or sources do you use when looking at future earnings estimates...Is this the main factor for dumping TA because of lowered earnings forecasts?

Anyway, if you read this far, thank you and enjoy reading other posters thoughts.
User avatar
scomac
Veteran Contributor
Veteran Contributor
Posts: 7788
Joined: 19 Feb 2005 09:47
Location: The Gateway to Wine Country

Re: TransAlta (Symbol-TA)

Post by scomac »

1. You need to go to the TransAlta web site for your information rather than relying on compiling services like TR. Look for the latest annual report. You will be able to find what you're looking for detailed in there as to what their ownership stake in RNW is.

2. From Q3_2015 notes regarding share capital are covered on pages 64 (note 12) and 65 (note 13). Generally speaking, equity is made up of capital contributions from share issuance plus retained earnings minus any accumulated deficit. Preferred shares always are a separate entry. The $3056 is the capital contribution from the issuance of common shares. It has nothing to do with market price.

3. Net-net is explained here. For your purposes current assets minus current liabilities equals working capital. If the company has a lower market value than the working capital that would be what you were looking for. In essence you get the business for the cash and liquid assets minus the current liabilities and the hard assets are free, but you must assume the debt also. Theory goes that you could break the company up, liquidate it and make money doing so.

4. I suspect this is analyst consensus. Company guidance tends to be limited to ensuing quarters and the fiscal year or two ahead.

I find in these types of situations that rather than using earnings, cash flows works best. At least it gives you some clue what the operational profitability is. Page 46 of the above linked report shows that for the 9 months ending September 30, 2015 the company had $480M in operational cash flow. They spent $425M over the same period on capital expenditures. They rolled over ~$750M in LT debt and paid $128M in dividends as well as $70M in distributions to subsidiary non controlling interests covered in note 7 (TA CoGen & TA Renewables). You'll also note that they've being selling off some non controlling interests to raise capital.

At least in the near term, the business doesn't cash flow. It has probably been that way for a while now based on how the shares have traded. I'm not an accountant, but these sorts of things are understandable to me. If you spend more than you take in it isn't good. If it goes on for an extended period of time, it's bad! To continue to be a shareholder you need to be comfortable with management and what they're plans are going forward. You need to read the M D & A for that; probably a few reports worth to see if they are consistent and executing.

It takes a fair bit of time to do a full scale run up on something like this. It should be something that you're willing to do when looking at a distressed situation. If you find it too difficult, don't be afraid to walk away. Things can look reasonable and you can still be thrown a curve ball. There's risk, that's why it appears cheap.

[Added] With respect to the interest that TransAlta has in RNW:
Amounts attributable to the non-controlling interests include the 17 per cent non-controlling interest in its Kent Hills wind farm.
As a result of the Transaction (Note 3), the Corporation’s share of ownership and voting rights increased from 70.3 per cent to
76.1 per cent on May 7, 2015. As the Class B Shares issued to the Corporation in the Transaction were determined to constitute
financial liabilities of TransAlta Renewables and do not participate in earnings until commissioning of South Hedland, they are
excluded from the allocation of equity and earnings. Accordingly, the Corporation’s equity participation in TransAlta Renewables
increased by a smaller proportion from 70.3 per cent to 72.8 per cent following the transaction.
Last edited by scomac on 01 Feb 2016 23:12, edited 1 time in total.
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
nisser
Veteran Contributor
Veteran Contributor
Posts: 2079
Joined: 11 Nov 2007 21:24

Re: TransAlta (Symbol-TA)

Post by nisser »

Those are consensus analyst earnings. The 5 year average of forecast earnings is 0.134. So if you use current price with forward earnings, you get a P/E of nearly 40. And that's using the 5 year forward average....So many ifs there.

That's why it's trading so "cheaply" and probably not cheap enough
bindexit
Contributor
Contributor
Posts: 661
Joined: 24 Feb 2007 13:43

Re: TransAlta (Symbol-TA)

Post by bindexit »

Thanks Scomac (you have always been very helpful over the years!) and Nisser.

I understand the net net concept. I find the difficulty in figuring out percentages on current asset items other than cash to establish value. For example, if you look at a business that sells leather coats, what is the present cash value of the ones in inventory if the business ceased today? I think you need some kind of retail / insolvency experience to get the percentages right of what dollars you can realistically pull in.

If I read the Transalta 2015 Q3 report correctly, they refer to RNW ownership increasing to 76% (page M6). I read as much as possible but still have a mental block on concepts like Total Equity and respective shares. In depth analysis and reading stock's information is very important. I find though it is difficult, time consuming, and most of all....in the end what hidden gem could I find that other well known investors do not see. It's the main reason why I take a macro view for stock picking first whether it be country or sector or market and compare to a benchmark, then screen for cheap (e.g. low price to book), review summaries like my broker's Reuters reports for financials for my assessment, and sometimes check if well known investors have in their portfolio (i.e. copycat). It's definitely Mea Culpa for weak stock picking analysis.

My tendency to screen for cheap with a cursory review and copy cat gets me into trouble often. For example, Danier Leather went kapputtt today and so did my money!! SkaSka wrote something on Danier's post which rings true to me ....When picking up turds, it's important to pick up a lot of them!...(I think re: value and net nets).

Considering future earning estimates (broker's screens) and my uncertainty with Transalta, I've decided to decrease my exposure. I am going to sell and switch funds for SCITI TRUST (SIN.UN) which has Transalta and other "Turds":)
rhenderson
Contributor
Contributor
Posts: 468
Joined: 22 Jan 2007 13:38

Re: TransAlta (Symbol-TA)

Post by rhenderson »

AltaRed wrote:
nisser wrote:Lots of sheep out there. Notley pretty much murders the company's long term prospects over the weekend, commiting a large number of TAs factories to eventual death in less than 15 years and the stock bounces 10% because a bank upgrades it from a sell rating
I agree Notley's plan is toast for this company, albeit I think it is the renewables announcement today that caused the stock bounce. There is a possibility that TA will eventually be TU (teats up) and the surviving company will be the renewables company.

Until then, TA will milk the facilities for what they can get out of them, at least some of them being under PPAs with other power sellers like ALA and TRP. For example, two of TA's Sundance units have 50/50 PPAs with TRP and ALA for the electricity generated off those units. TA is just the generator. I believe these PPAs expire circa 2020 but that does not mean TRP and/or ALA will not negotiate additional years while they either build their own new generation or contract from a number of other suppliers after that.
Just curious, but do you still believe that TA will eventually be TU :?:

I remembered your post because at the time I was holding some of the TA prefs (one of the few junk issues in my portfolio)
but hung on because the common hadn't been completely eliminated, so there was still some hope.

I was thankful for their now failed consolidation offer that gave me a chance to get out but I wonder what other more knowledgeable
posters still think about the prospects for TA.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: TransAlta (Symbol-TA)

Post by AltaRed »

:lol: I no longer think TA will go TU partly because the AB gov't will have to cover the stranded costs of premature closure (or conversion) of coal fired plants, and despite the court case, take responsibility for the PPAs. There may even be a federal (and thus provincial) extension to the 2030 deadline eventually, or a less aggressive escalation of carbon tax increases, if the USA slacks off in its carbon policy and/or there is more provincial carbon tax revenue used for offsets. A lot can happen in the next 13 years to modify/adjust the 'ambitious' goals of Trudeau's gov't.

That said, I still think TA is a poorly run company with little to offer investors. I think there are better investment choices in this sector.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
User avatar
Peculiar_Investor
Administrator
Administrator
Posts: 13267
Joined: 01 Mar 2005 14:52
Location: Calgary
Contact:

Re: TransAlta (Symbol-TA)

Post by Peculiar_Investor »

Just back from vacation and catching up on some things. Checking my TD DI account this morning and noticed that my TransAlta notes that we to mature on 18-Nov-2019 we redeemed early and funds were deposited to my TD DI account on August 2nd.

Google turned up TransAlta Announces $345 Million Financing and the Early Redemption of $400 Million of Medium Term Notes | TransAlta
TransAlta wrote:TransAlta also announced today that it will redeem all of its outstanding 6.40% Medium Term Notes, due November 18, 2019 in the aggregate principal amount of $400,000,000 (the “Notes”). The redemption price will be $1,061.736 per $1,000 principal amount of the Notes (representing, in aggregate, $424,694,410.96) including accrued and unpaid interest on the Notes.
What I'm seeing in my TD DI account for the redemption is a redemption at $967.416 per $1,000 principal amount of the Notes. which clearly doesn't match the TransAlta press release.

Is there anyone else on FWF that were holding these notes and did you receive the $1,061.736 per $1,000 principal amount of the Notes that TransAlta indicated in their press release?
Imagefiniki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.

Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
OnlyMyOpinion
Veteran Contributor
Veteran Contributor
Posts: 4231
Joined: 24 Jan 2014 23:17

Re: TransAlta (Symbol-TA)

Post by OnlyMyOpinion »

I don't, but wondered if the $94.32 might have been paid out as interest?
RBull
Contributor
Contributor
Posts: 164
Joined: 05 Feb 2013 13:36
Location: Canada's Ocean Playground

Re: TransAlta (Symbol-TA)

Post by RBull »

Peculiar_Investor wrote: 13 Aug 2018 10:04 Just back from vacation and catching up on some things. Checking my TD DI account this morning and noticed that my TransAlta notes that we to mature on 18-Nov-2019 we redeemed early and funds were deposited to my TD DI account on August 2nd.

Google turned up TransAlta Announces $345 Million Financing and the Early Redemption of $400 Million of Medium Term Notes | TransAlta
TransAlta wrote:TransAlta also announced today that it will redeem all of its outstanding 6.40% Medium Term Notes, due November 18, 2019 in the aggregate principal amount of $400,000,000 (the “Notes”). The redemption price will be $1,061.736 per $1,000 principal amount of the Notes (representing, in aggregate, $424,694,410.96) including accrued and unpaid interest on the Notes.
What I'm seeing in my TD DI account for the redemption is a redemption at $967.416 per $1,000 principal amount of the Notes. which clearly doesn't match the TransAlta press release.

Is there anyone else on FWF that were holding these notes and did you receive the $1,061.736 per $1,000 principal amount of the Notes that TransAlta indicated in their press release?
I held that same issue, and also one maturing Nov 18, 2018. I received the same as you on the 2019 one. The price in the release you referenced seems like pricing for a regular bond and not a strip, which is what I have and seems like you too. I can found no reference anywhere identifying the difference ( bond or strip) or anything whatsoever on my 2018 issue.

I have written to investor relations for clarification and will post whatever I hear back.
User avatar
Peculiar_Investor
Administrator
Administrator
Posts: 13267
Joined: 01 Mar 2005 14:52
Location: Calgary
Contact:

Re: TransAlta (Symbol-TA)

Post by Peculiar_Investor »

RBull wrote: 13 Aug 2018 12:45 I held that same issue, and also one maturing Nov 18, 2018. I received the same as you on the 2019 one. The price in the release you referenced seems like pricing for a regular bond and not a strip, which is what I have and seems like you too. I can found no reference anywhere identifying the difference ( bond or strip) or anything whatsoever on my 2018 issue.

I have written to investor relations for clarification and will post whatever I hear back.
Thanks for the confirmation. I've rechecked my statements and confirmations and you are correct that I was holding the strip (principle). That would probably explain the difference as the other part of the strip (zero-coupon) would receive a portion of the proceeds as well.
Imagefiniki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.

Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
RBull
Contributor
Contributor
Posts: 164
Joined: 05 Feb 2013 13:36
Location: Canada's Ocean Playground

Re: TransAlta (Symbol-TA)

Post by RBull »

Peculiar_Investor wrote: 13 Aug 2018 13:28
RBull wrote: 13 Aug 2018 12:45 I held that same issue, and also one maturing Nov 18, 2018. I received the same as you on the 2019 one. The price in the release you referenced seems like pricing for a regular bond and not a strip, which is what I have and seems like you too. I can found no reference anywhere identifying the difference ( bond or strip) or anything whatsoever on my 2018 issue.

I have written to investor relations for clarification and will post whatever I hear back.
Thanks for the confirmation. I've rechecked my statements and confirmations and you are correct that I was holding the strip (principle). That would probably explain the difference as the other part of the strip (zero-coupon) would receive a portion of the proceeds as well.
You're welcome. Yes, all looks right to me including my 2018 issue but I figured I'd write and hear it from the horses mouth.
User avatar
Peculiar_Investor
Administrator
Administrator
Posts: 13267
Joined: 01 Mar 2005 14:52
Location: Calgary
Contact:

Re: TransAlta (Symbol-TA)

Post by Peculiar_Investor »

As I periodically do, I'm on the lookout for bonds (or notes) maturing at the end of my 10 year bond ladder, i.e. 2029 maturity dates.

Scanning TD DI's fixed income this morning I found a TransAlta Corp 10/22/2029 with a 7.3% coupon available with a yield of 5.96%. Rating shown as BBB-, which is just barely investment grade. Is this a pricing anomaly or an insight into potential future credit risk? The next highest 2029 maturity that TD DI has available is a Bell Canada (BBB+) yielding 3.59%, which leads me to believe that the TranAlta pricing might be an anomaly.

Thoughts?
Imagefiniki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.

Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
JaydoubleU
Veteran Contributor
Veteran Contributor
Posts: 3103
Joined: 13 Sep 2007 22:52

Re: TransAlta (Symbol-TA)

Post by JaydoubleU »

What do others make of this deal between Brookfield and Transalta?

https://www.cbc.ca/news/canada/calgary/ ... -1.5070031

ISTM that Brookfield is only after TA's renewable assets. I am wondering where this leaves RNW, or should I say, how RNW figures in this?

Perhaps some of my confusion is because it is hard to distinguish between BAM and BEP.UN, or between TA and RNW. In both cases, they are majority owned by the parent.

What is clear, at any rate, is that TA investors are celebrating. TA is up over 70% YTD (albeit, most of that gain came before the deal with Brookfield was announced).

As an investor in both BEP.UN and RNW, I am obviously very interested in these developments.
User avatar
kjmcrae
Contributor
Contributor
Posts: 425
Joined: 26 Jun 2006 09:49
Location: Ontario

Re: TransAlta (Symbol-TA)

Post by kjmcrae »

TransAlta Corporation (TSX:TA, NYSE:TAC) to Acquire TransAlta Renewables Inc. (TSX:RNW) to Simplify Structure and Enhance Strategic Position
Under the terms of the Agreement, each RNW Share will be exchanged for, at the election of each holder of RNW Shares ("RNW Shareholders"):
  • 1.0337 common shares of TransAlta (each, a "TransAlta Share"), or
  • $13.00 in cash
CanSiamCyp
Contributor
Contributor
Posts: 24
Joined: 20 Nov 2022 20:33

Re: TransAlta (Symbol-TA)

Post by CanSiamCyp »

Wow!

Up 5.4% in one day! The market must really like the proposed takeover of RNW by TA ... either that or one or more analysts upped their recommendations and price targets as a result of the proposal!

GLTA!
Post Reply