Recent Buy – IPL


A quick update on a a recent purchase in my portfolio to close out the month of October.

I feel like I keep repeatedly publishing the same post over and over 🙂 I had put in a low-ball offer a few weeks/months ago, which got executed last week. In this purchase, I added 100 shares of Inter Pipeline Ltd (IPL.TO) @ $20.80. IPL is a pipeline company that I have been a shareholder in for a long time and continue to build my position over the years. I have doubled my position since the start of 2018 with these purchases. IPL now makes a substantial position in my portfolio and will possibly look at limiting any more build-up since I do not want to own too much portfolio concentration in a single stock. With a current yield of ~7%, this purchase adds CAD$168 to my forward dividend income.

With WCS crude prices selling at record lows, the upstreams are desperate to sell as much as they can to keep the revenues up (possibly a good time to look at some upstream plays in the Canadian oil sands sector, such as Suncor, Cenovus, Canadian Natural Resources etc…but I digress). As a result, all pipelines are running full and future capacities such as Line 3 from Enbridge that is scheduled to come online in fall 2019 is already completely sold out. In addition to the pipelines, upstream operators have been buying all capacity they can find on railroads, trucks etc. So, it’s a good time to be a midstream operator in Alberta, and I think this is a good opportunity to add to IPL.

Full Disclosure: Long IPL.TO. Our full list of holdings is available here.

Outlook for November 2018

October turned out to be one scary month for a lot of investors. Most portfolios took a haircut with the broad market taking a plunge. Almost half of the S&P 500 stocks are in bear market territory now, having fallen more than 20%. I am now waiting for the other shoe to drop. When you have a handful of stocks (the big 5 tech stocks) making more than 15% of world’s largest financial market, nothing good can come from it. I’ve been highlighting this for the last year or so and finally the tide is turning with the major tech stocks plunging in October.

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