One obvious tax-loss selling prospect was Atlantic Power (NYSE: AT / TSX: ATP).
I can see people thinking to themselves… “I’ll crystalize a loss today, and then 30 days later after the wash sale period, I’ll buy back!”
The market has ways of tricking people:
Today was the highest volume day (over 2 million shares on the American exchange) since June 26, 2020 (which was another conspicuous end-of-quarter date) where over 5 million shares traded.
Days like today tell you what the true liquidity of the stock is.
I’m guessing some portfolio managers are trying to dump this out of their portfolios because it has been a dog on price.
Better times will be had ahead in 2021.
Thanks for sharing. For ATP, do you think the underperformance is because of the meaningful upcoming 2022-2024 PPA expiries (plus the Curtis Palmer expiry in 27) and uncertainty around their renewal rates? How does one get comfort on those? Thanks!
My speculation on the first question is that the company is not in the target board of current investment hype sectors (like it was a decade ago!) coupled with the non-income distribution. Coupled with a small market cap and non-requirement for financing in the immediate term puts them off the radar of most. A whopping three analysts cover it.
Comfort is in the eye of the beholder. You’re not likely to get an investment at the price you want if it’s perceived to be comfortable.
Thanks Sacha, for the thoughtful response as always. I’m with you, I think management will continue to do a good job and take care of the renewals as best they can as they come up (at least for whatever is in their control). I’d also imagine more analysts will cover atp as the esg/renewable/infrastructure theme continues to gain mind share. Thanks.
James Moore said on the last CC that he wanted to do another SIB in the near future.
Hopefully the price languish for a few more months so he can get them on the cheap.
Moore: “On our second quarter call in August, we said we would need to rebuild cash before considering another Substantial Issuer Bid or SIB. At the end of September we had $9 million in discretionary cash. We expect to reach about $20 million by year-end with the insurance settlement added to the $9 million. That level of discretionary cash would allow us to consider an SIB for either common or preferred shares or both with manageable cost relative to the size of an SIB.
We can also use our normal course issuer bid if we decide against an SIB. But the NCIB limits the amount of repurchases relative to an SIB.”
Doesn’t mean they’ll do it for sure. But perhaps the price increase in the past couple days is speculation on this? An SIB on previous terms is roughly another 10% of the common gone. 28 million shares were subscribed in the last SIB, so there’s a lot of float left seemingly.
Mr. Moneybags decided to show up again at 12:30:
Atlantic Power acquired: https://www.newswire.ca/news-releases/atlantic-power-agrees-to-be-acquired-by-i-squared-capital-803865392.html
Thanks, posted reaction: https://divestor.com/?p=10277