Making sense of the markets this week: Might 14, 2023

Canadian pipeline earnings proceed to circulation 

Enbridge, TC Vitality and Keyera additionally reported earnings this week, they usually have been largely according to what analysts had predicted; in consequence, all three pipeline shares have been up between 1% and a pair of% during the last 5 buying and selling days.

Trying forward, subsequent quarter’s earnings is probably not fairly so uplifting, as Alberta’s wildfires proceed to have widespread human and financial penalties. Almost 30,000 residents have been evacuated, and 109 fires have already affected power manufacturing. It will clearly have an effect on firms’ backside traces.

You’ll be able to learn extra of my ideas on Canadian pipeline shares at

Algonquin Energy leaves Kentucky, comes again to actuality

Maybe no single inventory on the Toronto Inventory Trade has generated extra shock during the last yr than Algonquin Energy (AQN/TSX). Heading into 2022, the corporate was seen as a comparatively secure mixture of utility supplier and renewable power generator. Then, final November, rate of interest realities lastly hit, and all that debt-fuelled progress didn’t look fairly so shiny.

This week, Algonquin introduced strong earnings-per-share numbers of $0.17 (versus $0.16 predicted) and quarterly revenues of $778.6 million (versus $733.7 million predicted). Regardless of the slight outperformance relative to expectations, shares have been down 2.68% on Thursday.

Algonquin’s share value historical past is a good instance of how numbers will be manipulated to inform fully completely different tales. For instance, I might inform you that the corporate was severely oversold and has had unbelievable momentum this yr…

Graph of Algonquin Power stock performance year-to-date up to May 11
Supply: Google Finance

Or I might inform you that Algonquin shareholders are nonetheless affected by having the wool pulled over their eyes, and administration has a protracted method to go to get again to their earlier reliable standing.

Graph of Alqonquin Power stock performance from May 2022 to May 2023
Supply: Google Finance

Crucial latest information for Algonquin is the breakup of the Kentucky Energy acquisition. Algonquin’s president and CEO, Arun Banskota, addressed this transaction at first of the earnings name, saying, “Final month, we introduced with AEP a mutual termination of settlement to amass Kentucky Energy Firm and AEP Kentucky Transmission Firm. This was not a straightforward resolution. Nonetheless, our board of administrators and administration crew determined that, given the difficult and constantly evolving macroeconomic atmosphere and regulatory uncertainty over a last order, it was in one of the best curiosity of the corporate to terminate the transaction.”

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