Hey there,
Algonquin is in a tough position. It has disappointed investors with their dividend cut and elimination of the DRIP. We knew this was a strong possibility and warned against an upcoming dividend cut despite the fact others in the space said it was safe. Management even did some interviews in late fall to help quell investor disappointment.
However, as we've seen many times before - despite what management says - the numbers always tell the true story. The story with AQN was that it had taken on too much floating debt to fund the Kentucky Power acquisition which has taken much, much longer to close than first anticipated. Add on the cost of rising rates and it was a prudent move by management.
That said, the company is also looking to make asset sales and the KP acqusition is still up in the air. In our opinion, it'll be range bound for a while and it will take some time to recover. Dan sold his position and I'll likely be doing the same in the near future. We just feel like AQN has lots to prove over the next couple of years to regain investor confidence. It certainly could and may yet prove to be a contrarian play on a rebound, but I wouldn't expect too much out of the company until we see closure on KP, what assets it will dispose of and what its financial situation looks like after all these changes.
Mat