- TransAlta's SOTP value comes to $16 per share vs. the $11 trading price.
- TransAlta's value can further increase rather shortly due to coal-to-gas conversion in Alberta during 2021.
- Strong cash flows will fund the company's makeover of Alberta Thermal, deleveraging, buybacks, dividend growth, and development and/or acquisition of new projects in renewables and cogen.
- An eventual acquisition by Brookfield is probable. Currently, Brookfield owns 13.1% of common shares and an additional $750M (about 25% of the company's market cap) in Exchangeable Securities.
For further details see:
TransAlta: Materially Undervalued; Eventual Acquisition By Brookfield Possible