Contact Energy - CEN Chart

[Blackrose]

Yes the sun came out on these shares! A nice little creep up. Stoked.

[barleeni]

Yes the sun came out on these shares! A nice little creep up. Stoked.

Im glad someone has some positivity on this share. Its definitely not in my favourites category, I invested 18 or so months ago, expecting a step change in dividends. That was based on them pretty much stopping all capex (after Te Mihi was complete). I had thought that dividends would go up based on nil capex expenditure. It seems I was wrong! I think including divs. CEN has given about a 10% return over 18 months. Not good....... relative to the NZX50 rising something like 35% in the same period.

[fish]

Im glad someone has some positivity on this share. Its definitely not in my favourites category, I invested 18 or so months ago, expecting a step change in dividends. That was based on them pretty much stopping all capex (after Te Mihi was complete). I had thought that dividends would go up based on nil capex expenditure. It seems I was wrong! I think including divs. CEN has given about a 10% return over 18 months. Not good....... relative to the NZX50 rising something like 35% in the same period.

Patience is needed.
CEN is well-positioned to take advantage of the higher prices and I expect increased dividends will follow.

[Snoopy]

I invested 18 or so months ago, expecting a step change in dividends. That was based on them pretty much stopping all capex (after Te Mihi was complete). I had thought that dividends would go up based on nil capex expenditure. It seems I was wrong!

Contact emptied the piggy bank paying out a special dividend before Origin Energy exited the share register. The need to rebuild their capital base by retaining earnings to ensure they retained their credit rating was very well signalled.

I think including divs. CEN has given about a 10% return over 18 months. Not good....... relative to the NZX50 rising something like 35% in the same period.

The NZX50 was at 6324 on 31/12/2015, and 7617 as at 28/06/2017. That makes a actual gain of 20.4% over 18 months, well short of your 'something like 35%'.

Contact closed at $5.22 yesterday. On 05/01/2016 the share price was $4.74. Since that time you have received three dividends totalling 11+ 15 + 11= 37c.

So total return on your investment has been ($5.22 + $0.37)/ $4.74 = 17.9%.

That is a little less than the NZX50 has returned over the period but only a couple of points less. For a 'boring utility' I think that is quite a good return. Perhaps it is your expectations that need adjustment, rather than what the Contact total return has actually done for you?

SNOOPY

discl: hold CEN

[barleeni]

Contact emptied the piggy bank paying out a special dividend before Origin Energy exited the share register. The need to rebuild their capital base by retaining earnings to ensure they retained their credit rating was very well signalled.



The NZX50 was at 6324 on 31/12/2015, and 7617 as at 28/06/2017. That makes a actual gain of 20.4% over 18 months, well short of your 'something like 35%'.

Contact closed at $5.22 yesterday. On 05/01/2016 the share price was $4.74. Since that time you have received three dividends totalling 11+ 15 + 11= 37c.

So total return on your investment has been ($5.22 + $0.37)/ $4.74 = 17.9%.

That is a little less than the NZX50 has returned over the period but only a couple of points less. For a 'boring utility' I think that is quite a good return. Perhaps it is your expectations that need adjustment, rather than what the Contact total return has actually done for you?

SNOOPY

discl: hold CEN

Okay.... well it depends what dates you pick I guess. I purchased shares on 30/11/15 and 07/12/15, which is more like 19 months admittedly. Inclusive of dividends, tax, and trade costs my net return to date is 10.37% (still holding full quantum). That might be a nice result for some, but compared to my portfolio it is in the bottom few (over this time my main shareholdings have been AIR/ATM/NZR/THL). Granted though CEN has done much better than my WYN holding

NZX was closer to 6100 at that time. So still lagging NZX50 by quite some margin. I did miscalculate NZX50 gain, but based on 6100 vs. today I get a 25% gain.

Still........ all Im saying is im a bit disappointed...

[Blackrose]

I've held em for about a year now - I got them when they were a lot higher than now, but I like the all over story. This one is a steady grower that accumulates slowly I think. I jumped a we tad early but I suspect that it will go back up past the $2 mark later on next year or so. I am happy to take the long view (4-5 years) on some shares and as this has a good story behind it, solid company and I'm content to wait the mild slump on this one. I'm happy it has a slice of the energy retail market and the gas market to, which is important.

This is the non glamorous, very dull share grind that some shares "are." Yes some people like to make shares "sexy" and "exciting" like some venture capitalists with their shiny algorithmic models and hedge fund, exciting cocaine snorting ex- Goldman Sach day trader with $10,000 suits hanging out at Spearmint Rhino is the complete opposite of what this is.

Then there is me, boring, wearing PJs and ugg boots at home, trading with a few stocks and even spent the dividends on shock horror.... grocery shopping at Woolworth's; and could easily be mistaken for all the other house wives doing their thing. (The AIA dividends did indeed buy some exit mold and a car rego it was awesome) Yet oddly you get the weirdest looks when you buy a print copy of the National Business Review if it's on the rack at the supermarket.... Funny old world innit?

[fish]

[QUOTE=Blackrose;671774]I've held em for about a year now - I got them when they were a lot higher than now, but I like the all over story. This one is a steady grower that accumulates slowly I think. I jumped a we tad early but I suspect that it will go back up past the $2 mark later on next year or so. I am happy to take the long view (4-5 years) on some shares and as this has a good story behind it, solid company and I'm content to wait the mild slump on this one. I'm happy it has a slice of the energy retail market and the gas market to, which is important.

This is the non glamorous, very dull share grind that some shares "are." Yes some people like to make shares "sexy" and "exciting" like some venture capitalists with their shiny algorithmic models and hedge fund, exciting cocaine snorting ex- Goldman Sach day trader with $10,000 suits hanging out at Spearmint Rhino is the complete opposite of what this is.

Then there is me, boring, wearing PJs and ugg boots at home, trading with a few stocks and even spent the dividends on shock horror.... grocery shopping at Woolworth's; and could easily be mistaken for all the other house wives doing their thing. (The AIA dividends did indeed buy some exit mold and a car rego it was awesome) Yet oddly you get the weirdest looks when you buy a print copy of the National Business Review if it's on the rack at the supermarket.... Funny old world innit?[/QUOTE

I trust Blackrose that your sights are set a lot higher.I was lucky to sell out at $10 many years ago and buy back in-mainly at sub $5 prices so am very happy at the volatility of this stock.
Trouble is I dont fully understand how the market prices it.
The company doesnt help or maybe I am not looking in the right place for the information I need.
At this moment Tiwai point is reasonably likely to stay open for many years.
Wholesale prices are high,demand is good so why is the sp not responding.
Clean,cheap hydro and geothermal with a little wind is the way to go.
Volvo have announced no more ICE from 2019 so I presume electric future is close.
Genesis is struggling to meet demand-having to inport Indonesian coal.
Why cant contact tell us if they are having to buy power or if their CBGT,peaker and diesel are compensating for the low levels in SI lakes?

[Snoopy]

Trouble is I dont fully understand how the market prices it.
<snip>
Wholesale prices are high,demand is good so why is the sp not responding.
Clean,cheap hydro and geothermal with a little wind is the way to go.
<snip>.
Why cant Contact tell us if they are having to buy power or if their CBGT,peaker and diesel are compensating for the low levels in SI lakes?

Share price is up from around $5.17 three months ago to $5.27 today. We shareholders are hoping for a 15c dividend in early September. So the share price rise could be put down to the ex-dividend date drawing ever closer. That means CEN has effectively been flat since the shortage of river flow down south became public knowledge. Could the non-responsive share price be reflective of the cost of extra fuel needed to run those thermal stations exactly balancing out the lack of South Island river flow? I think you may have inadvertently answered your own question Fish.

SNOOPY

[fish]

Share price is up from around $5.17 three months ago to $5.27 today. We shareholders are hoping for a 15c dividend in early September. So the share price rise could be put down to the ex-dividend date drawing ever closer. That means CEN has effectively been flat since the shortage of river flow down south became public knowledge. Could the non-responsive share price be reflective of the cost of extra fuel needed to run those thermal stations exactly balancing out the lack of South Island river flow? I think you may have inadvertently answered your own question Fish.

SNOOPY

Thats one of the things I want to Know snoopy.I guess its commercially sensitive so the company isnt saying-but I did see a recent roadshow presentation that suggests the future is bright.
I understand they have gas contracts to have it supplied cheaply/take or pay so they take it all and pump it into an aged gas field and then extract it when prices are high to run their 400mw cgct which is very efficient and then they have a peaker-so maybe its cash flow neutral and any extra energy above their own needs can be sold at high prices.
The other thing is that the high prices are looking to run at least another 10 weeks.Futures will be up.They have also lifted prices to their own customers.
Next year is looking very promising and savvy investors may start buying.
Personally I decided earlier this year to balance my risk and sold most of my GEN to buy mercury.
I am holding onto CEN-by far my biggest investment

[fish]

Share price is up from around $5.17 three months ago to $5.27 today. We shareholders are hoping for a 15c dividend in early September. So the share price rise could be put down to the ex-dividend date drawing ever closer. That means CEN has effectively been flat since the shortage of river flow down south became public knowledge. Could the non-responsive share price be reflective of the cost of extra fuel needed to run those thermal stations exactly balancing out the lack of South Island river flow? I think you may have inadvertently answered your own question Fish.

SNOOPY

There can be a big difference between perception and reality.You have stated common knowledge and suggested I have answered my own question.
Looking at wholesale power prices this morning they are exceptionally high and likely to continue until the spring thaw.
Contact actually has most of its generation capacity in the North Islnd where it has most of its customers so is investor perception out of line with future profits-if so this is a cheap buy.
My thinking could be biased by the fact CEN is my biggest investment