Exiting Enbridge
Enbridge Inc. (ENB.TO) is an energy transportation and distribution company. The Company operates pipelines, processes energy and provides energy related services. [PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'ENB.TO'" symbolprices="52" div_align="right"]
We bought ENB in August 2015 at $52.70. After we bought it, the shares declined by 20% and then they recently rebounded as the price of oil stabilized.
Enbridge is a good company, but when you compare the expected growth rate in earnings to the actual PE multiple, it tells us that Enbridge is expensive. Earnings that are growing at the rate of 5% per year should not command a multiple of 24X earnings.
Note that since we initiated this transaction, earnings forecasts have declined by about 15%.
We made a minor profit and prefer to stand aside and seek better opportunities until the earnings recover.
HIGH VALUATION IN ENBRIDGE AT $53.94 (ENB-T) HALF POSITION
TOTAL RETURN: +2.4%
