For investors in Algonquin Power Utilities Corp the last few months have been difficult. The stock is some fifty percent off its recent highs. The question being asked is this: "Is it time to sell? Is it time to save what is left and move on?"
This is a tough call. Investors had confidence in AQN and that confidence was misplaced. If we have confidence in AQN today, is that confidence again misplaced? My gut feeling is no, it's not. AQN will not drop a further fifty percent from its present price. The days of massive losses are over. AQN stock may go down but it will do so in lock-step with a falling market. AQN will not lead the retreat.
Look at the screen grab posted at the top of this post. Note that four absolutely superb stocks were all down at the open this morning. AQN balked. AQN was actually up almost a full percent. I don't find this apparent strength surprising. AQN is testing a bottom. I feel confident continuing to hold AQN.
AQN slashed its dividend. The pain of that cut is reflected in the present stock price. I don't see another big cut in the near future. And so the correct question is: "If I sell my AQN, where can I invest the money and get the same or better dividend income. What investment is offering better potential for a decent capital gain?" I have no quick, easy answer and so I continue holding AQN.
In the mid-afternoon, I checked the gain/loss of AQN again. Wow! It was up more than two percent while everything else remained down. AQN is clearly testing a possible bottom.
