CymorFund Stock Pick Innergex Renewable Energy

CymorFund Stock Pick – Buy Innergex Renewable Energy Inc (TSX- $9.01)

 CymorFund Stock Picks Innergex

Cymorfund Investment Letter Stock Pick  – Innergex Renewable Energy Inc (TSX- $9.01)

 

When a Stock Retains its Value, But is Beaten down by the General Market

As has been said so often, the best way to make money in the stock market is to look for bargains. Stocks that have fallen with the tide, but retain all of their value. It like Black Friday when the retail stores put specials on and if you need something, you buy it on Black Friday because a few days later,, it will cost a lot more.  To quote Warren Buffett, ““Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.””

Perhaps another way to look at it, is another quote “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”  

INE is currently on sale, and falls into the category of a dependable long life well managed company, that pays a good dividend, and the price of its stock is currently depressed. When there is a bargain in the stock market, it is the best time to make money.

  

 

 What is INE – Innergex Renewable Energy

Innergex is a Green Company that buys and develops energy projects in Run of River projects, wind farms, Hydro projects and solar projects. It has been active since 1990 in developing, owning, and operating run-of-river hydroelectric facilities, wind farms, and solar photovoltaic farms with operations in Québec, Ontario, British Columbia, and Idaho,USA. To quote the motto of the company, – “We strive for sustainability in all aspects of our business.”

There are several key words that sum up this company and why it is a good addition to a portfolio.

  • Sustainability –  Projects owned or developed by INE will be producing power for many years to come, in an environment of ever increasing demand
  • Green – These are environmentally friendly projects that use the natural resources of the earth, and minimize pollution and discharge
  • Dividend – INE pays a dividend of  6 1/2% at current stock prices
  • Stock Price – beaten down
  • Management – Good

 

The Stock Price – A Technical Perspective

When you buy or sell a stock, it is essential to know where the stock has been (price wise) and what the support and resistance points are. This stock has most interesting positive features.  

It came out in 2008, just before every stock got crushed by the global market meltdown. It started at $11, jumped to $14, and then got crushed falling to a low of $2.75 by the start of 2009, where it stayed during the March 2009 2nd global market meltdown. From there it gradually rose until it hit resistance in April 2010 and its rise stalled at $9.00 where it stayed until September 2010, when it broke through that resistance. Interestingly, our recommendation is to buy it at exactly where this resistance occurred as that is now the support point.

After breaking through this resistance level in September 2010, the stock slowly climbed back to $11, and then in June 2013, the stock again plummeted – plunging down right through that $9.00 support level. The stock then tried but failed again to rise through the resistance at $9.00 until finally in October 2013 (this month) it finally broke through that $9.00 resistance level. 

The stock is now poised to move up having broken through the $9.00 resistance level. It will likely climb back through the $11.00 mark for a $3.00 gain plus the 6 1/2% dividend along the way, for a very nice Return on Investment.

It is a classic stock chart technical pattern that is usually quite accurate.

 

Some Details of Innergex Renewable Energy Inc

Innergex currently owns interests in 29 operating facilities with an aggregate net installed capacity of 617 MW including 23 hydroelectric operating facilities, 5 wind farms, 1 solar photovoltaic farm, and 8 projects under development or construction with an aggregate net installed capacity  of 265 MW. It has future prospective projects that it hopes with dramatically increase its footprint, with an aggregate net capacity of 2,900 MegaWatts. 

Given its development so far, it is reasonable to assume that many of these projects will come on stream. 

All of these projects are intended to produce sustainable cash flows which in turn means a sustainable dividend. The method of operation is to secure a “green” project at a reasonable rate of return, and then to secure funding for that project based on the projects fundamentals, that allow the company a continuing positive cash flow from the project.

Financial

Innergex is listed on the Toronto Stock Exchange under the symbol “INE”  The company has 94 million fully diluted shares outstanding. Its trading price for the last 52 weeks has been $8.37 – $10.92. 

The company currently pays a dividend of $0.585 / year, paid quarterly. Based on the current stock price, this is a 6.5% dividend,

The street target is approximately $10.55, which would be a 17% gain over today’s trading price. Combine that with the dividend of 6 1/2 % and that represents a gain of 23%. A nice secure profitable investment.

CymorFund Stock Picks – Buy Innergex Renewable Energy Inc (INE-TC)  (TSX $9.01)

 

We may or may not have positions in securities we name. In making an investment decision consider numerous factors such as portfolio balancing, timing, cash and capital reserves, asset allocation and other. Do your own research. Matters discussed contain forward-looking statements that are subject to risks and uncertainties and actual results may differ materially from any future results, performance or achievements expressed or implied.

Views expressed are opinions and not investment advice. You should retain a licensed professional to guide you and  not rely on the opinions expressed herein. This report is neither a solicitation nor a recommendation to buy or sell securities. We are not a registered investment advisor nor a broker-dealer. The information contained herein is based on sources which we believe reliable but is not guaranteed as being accurate or a complete statement or summary of the available data.

By Larry Cyna

Mr. Cyna is an accomplished investor in the Canadian public markets for over 20 years, and has managed significant portfolios. He is a financing specialist for private and public companies, and has expertise in real estate and debt obligations. He has assisted private companies accessing the public markets, has been a founding director of public companies and continues as a strategic consultant to selected clientele. He is and has been a director, a senior officer and on the Advisory Board of a number of TSX and TSXV public companies in the mining, resource, technology and telecommunications sectors, and the Founding Director of two CPC’s with qualifying transactions in mining and minerals. He was an honorary director of the Rotman School of Management MBA IMC program, has completed the Canadian Securities Institute Canadian Securities Course & Institute Conduct and Practices Handbook Course, was a former Manager under contract to an Investment Manager at BMO Nesbitt Burns, a roster mediator under the Ontario Mandatory Mediation Program, Toronto, a member of the Institute of Corporate Directors of Ontario, a member of the Upper Canada Dispute Resolution Group, and the Ontario Bar Association, Alternate Dispute Resolution section. He obtained his designation as a Chartered Accountant in Ontario in 1971 and was the recipient of the Founder’s Prize for academic achievement together with a cash reward. He became a CPA in the State of Illinois, USA in 1999 under IQEX with a grade of 92%. He is a Member of the Institute of Chartered Accountants of Ontario and the Canadian Institute of Chartered Accountants. He holds certificates in Advanced ADR & in Civil Justice in Ontario, Faculty of Law, University of Windsor, certificate in Dispute Resolution from the Ontario Institute of Chartered Accountants. Previous accomplishments are Manager of Cymor Risk Consultants LP specializing in Risk Management Assessment; CEO of Cyna & Associates specializing in mediation and ADR; Founder & Senior Partner of Cyna & Co, Chartered Accountants, a fully licensed and accredited public accountancy firm with international affiliations; and was a partner in a large public accountancy firm. Mr. Cyna is well known in the Canadian Investing community. He is invited to, and attends presentations given by public companies usually 3 or 4 times each week. These presentations are intended by the various hosting companies to present their inside story to sophisticated parties and Investment Managers for the purpose of attracting funding, or of making parties more interested in acquiring shares of those companies. Being a part of this keeps Mr. Cyna deeply involved in the current market and leads to numerous investment opportunities.