Monday, 17 August 2015

Recent Buy! August 2015

    Putting money to work is an activity which I greatly enough, and its right up there with sharing those purchases here. On August 7th I closed my position in my BMO ETF, ZDV. Using some of those proceeds and accumulated dividends I added to my current holdings in Veresen (VSN).

    Veresen operates within three primary categories: midstream operations, pipelines and power generation. The stock is down 23.93% in the past three months, and on Friday dropped roughly another 4.8%. Mainly due to the unexpected forced shutdown of the Alliance pipeline, which Veresen shares a stake in with Enbridge.The issue appeared to be largely out of Alliance Pipeline's control, as the problem occurred by an upstream operator with the detection of Hydrogen Sulphide. On August 13th operations have started, and are running smoothly.

    I added to my position of 98 shares with an additional 73 shares. The price had dropped and I could not resist the opportunity to massively average down. My initial cost basis was $17.43 on my 98 shares and I bought the 73 shares at $12.69! My new average cost basis is now $15.41, almost $2 less per share! Low and behold the price rebounded some over the following week when operations resumed, with a weekend closing price of $13.83. Still below my average cost, but making headway.

    With the addition of these shares I gain a steady monthly dividend income of $6.08, for an annualized income of $72.97, yielding 7.9% at the purchase price.

    For the long term I am fairly confident in Veresen's ability to keep up with its dividend payments and growth of the company. In the recent Q2 results they reported higher adjusted net income, doubled their cash from operations from Q2 2014 and got approval from both Canadian and American governments to implement new customer contracts and services as well as approval to export natural gas from Canada to the States. As mentioned by the President and CEO Don Althoff, the only exception to Veresen's overall good performance was the Aux Sable business, which has exposure to lower commodity prices. Other than that business unit, Veresen appears to be fairly insulated from today's depressed energy prices and I am happy to hold it.


  1. Interesting purchase, DW. I have seen VSN name pop up occasionally, but never really dug in deep to read more and check the financials. I really like the midstream space - one of the best ways to get energy exposure without the risks of oil price variations. I will have to check out VSN in detail. Thanks for sharing


    1. Thanks! I just couldn't resist the price, its been down a bit over the past couple months and then this big drop happened and I went for it. There were so many times in the past where I saw it do a big drop of 4-8% in a day or two, only to have it massive rebound within the next week. And the overall business does seem solid enough, although no current history of dividend increases unlike Pembina (PPL).