Lure of yield - aggressive accounting, overpayment of distributions, asset value inflation, and an unjustifiably high multiple create substantial downside risks for this YieldCo, in our view.
Correct, Stephen. I did not value the entities. Investors might want to discount the positions given 1) that they are clearly troubled/impaired and 2) the profoundly inadequate disclosure at BIP (IMO), which would seem to indicate that all is well.
This is outstanding research. Truly some of the deepest reporting I have seen on an investment thesis/short thesis. I should have read this before asking questions on your more recent articles.
The market value vs NAV gap has now persisted for many years. It's there for all to see. So, what will be the catalyst that collapses the gap? In my opinion, based on reading your report, it will be a need to cut the unsustainable dividend. Do you have a hypothesis on what will cause a collapse? Perhaps it's an Edper-style debt-balloon?
Btw. I went down the rabbit hole on Edper. Never knew that story. Thanks again.
Thanks for the compliments. Actually, the NAV gap has gotten worse over the years after transferring from GAAP to IFRS.
Maybe management either addresses the value issue or pretends it doesn't exist long enough for investors to get the message. Could be a number of things, though.
Correct, Stephen. I did not value the entities. Investors might want to discount the positions given 1) that they are clearly troubled/impaired and 2) the profoundly inadequate disclosure at BIP (IMO), which would seem to indicate that all is well.
I think the Troubled Investments table on page 26 is not showing what you intended. In each of the entries, your value equals the carrying value?
This is outstanding research. Truly some of the deepest reporting I have seen on an investment thesis/short thesis. I should have read this before asking questions on your more recent articles.
The market value vs NAV gap has now persisted for many years. It's there for all to see. So, what will be the catalyst that collapses the gap? In my opinion, based on reading your report, it will be a need to cut the unsustainable dividend. Do you have a hypothesis on what will cause a collapse? Perhaps it's an Edper-style debt-balloon?
Btw. I went down the rabbit hole on Edper. Never knew that story. Thanks again.
Thanks for the compliments. Actually, the NAV gap has gotten worse over the years after transferring from GAAP to IFRS.
Maybe management either addresses the value issue or pretends it doesn't exist long enough for investors to get the message. Could be a number of things, though.