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dydo

Pattern Energy Group Inc. (PEGI)

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5 hours ago, dydo said:

PEGI sells at 23.40, more acqusitions possible again.

Think this is a good place to buy some PEGI?  It's accretive so the share price should move higher than the offering price, one would hope.

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According to the prospectus, PSP was going to buy up to $15M in shares out of the offering. Interestingly Merill Lynch who was one of the underwriters, day after closing sends the underperforming rating and set the price at $21. Looks to me like the dealer now wants to buy those shares at the lower price. Cheats.

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15 hours ago, dydo said:

Cheats.

Agreed.  Never trust a Wall Street banker/broker/underwriter.  Heck, half the time they don't even put their own clients' best interests before those of their firm (remember Goldman Sacks hyping bad mortgages to their clients while shorting them in their own trading--and I'm sure they weren't the only ones).

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https://www.awea.org/SenateTaxReformPTC

Senate tax reform keeps the PTC as is.

Also PEGI in their CC Q3 2017, though it may no longer be relevant:

Let me start with - we support many parts of tax reform, but we don't think the House provisions modifying the PTCs available to wind will survive. We are very good encouraged by the recent announcements of several key Republican senators saying that these provisions are dead on arrival in the Senate. As background, it's important to remember that the proposed House tax bill improves the returns on our existing assets over time primarily as a result of the lower corporate tax rate.

Additionally, our near-term growth is primarily outside the U.S. as evidenced by over 60% of our iROFO assets are outside the U.S. The bill has currently proposed primarily affects new projects being developed by Pattern Development. Pattern Development's pipeline has a number of projects that could be delayed, killed or need to be modified if the House bill were to be passed in its current form.

But beyond those few projects Pattern Development would adjust the pricing of its power sales reflecting any new tax law. This may make certain wind projects less competitive and could slow Pattern Development's growth in the U.S. for a limited period. But over the time, the market will adjust and continue to grow. Clearly, the bill does not affect our growth activities outside the U.S. So let's see what happens in the coming weeks. I think it is clear. It will become clear and we will be favorable and it will be favorable, but it will require some patience.

Edited by sunnypease

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Some negative comments recently regarding PEGI. 

Has anyone read or heard more about tax issues confronting PEGI?

Edited by sunnypease

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17 minutes ago, sunnypease said:

Some negative comments recently regarding PEGI. 

Has anyone read or heard more about tax issues confronting PEGI?

you mean this

Pattern Energy downgraded to Equal Weight at Morgan Stanley As previously reported, Morgan Stanley analyst Stephen Byrd downgraded Pattern Energy to Equal Weight from Overweight, citing his belief that the company will face a more challenging financing outlook in coming years and will need to reduce its "lofty dividend payout ratio." He lowered his price target on Pattern Energy to $25 from $33.

Read more at:
https://thefly.com/landingPageNews.php?id=2653914

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GS had this on the 5th

Pattern Energy Group Inc (NASDAQ: PEGI), a power company that focuses on wind, solar and transmission projects in the U.S., has underperformed recently, offering investors an entry point, according to Goldman Sachs.

The Analyst

Goldman Sachs analyst Brian Lee upgraded shares from Neutral to Buy, with a 12-month price target of $25, suggesting a 22 percent return potential compared to the 11 percent average return of the firm's coverage universe.

The Thesis

A combination of lower wind production, equity issuance and U.S. tax reform concerns have pressured the shares of Pattern Energy in recent months, Lee said in a note. Given the view these headwinds are transitory in nature, the analyst sees a setup for easier comps and mean revision potential, with respect to weather-impacted production levels.

This, according to Lee, argues for a favorable risk/reward.

Pattern Energy is now one of the highest-yielding YieldCos at about 8 percent on 2018 estimates compared to 6.5 percent for peers, Goldman said. The firm believes execution on dropdowns and organic cost improvements would support 20 percent cash available for distribution, or CAFD, in 2018-19, and an improvement in payout ratio back down to 85-90 percent.

Goldman sees the returning of fourth quarter wind production to average, dropdowns and lower payout ratio, organic cost savings and liquidity as upcoming catalysts.

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Good to hear Goldman thinks the tax issue is a temporary headwind.

Headline news at the NYT is that they have put together a combo House/Senate bill now.  Any word on what has happened to the PTC / ITC / AMT / and BEAT?

 

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1 hour ago, sunnypease said:

Good to hear Goldman thinks the tax issue is a temporary headwind.

Headline news at the NYT is that they have put together a combo House/Senate bill now.  Any word on what has happened to the PTC / ITC / AMT / and BEAT?

 

https://www.vox.com/energy-and-environment/2017/12/13/16768074/tax-bill-renewable-energy-wind-solar-credits

  • Thanks 1

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This is strange folks. Why is PEGI selling off & the solars & CAFD & RUN are not selling off?

Some wind specific bad news?

 

 

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You need to look at NEP and other yieldcos they are the same and NEP is up. I think some momentum selling got better of the stock. 

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