Contact Energy - CEN Chart

[fish]

Hi Macduffy ,

All downtrends on rock solid stocks will come to an end .
I believe contact is as secure as government bonds.
With some stocks -such as prc and nzo I made big mistakes such as buying on downtrends-I was risk taking for sure and have learnt hard lessons .
Now I am getting closer to retirement I am looking for income stocks with growth potential which I dont see in bank deposits.
I will also buy and sell to make profits when stocks go ahead of themselves-for instance I am considering selling vector after buying low last year .
I am not convinced that TA will tell me when to buy low until after I should have bought .I believe that fundamentally the price is very low .
In the case of cen the number of sellors has seemed very low-its just that they have been selling a lot with few buying-a situation that can reverse very quickly and those waiting for ta signals could miss the boat .

[macduffy]

All downtrends on rock solid stocks will come to an end .

No argument with that, but why not wait until the end?

I don't see any risk of "missing the boat ". The object should be to buy near the bottom - too hard to judge where the absolute bottom is going to be.

But I agree with your conclusion that CEN is a good pick for your purpose - just that I wouldn't be adding any just yet.

[GTM 3442]

I seem to remember that CEN had an IPO price of $3.10, and over the next few years traded down to $2.50. The SP recovered, and at about $4, someone from the (then) majority shareholder justified an attempted full takeover by saying something along the lines of "kiwi shareholders have made some money by now. Best they should sell out to us". After which the SP continued to recover to $9-odd.

Question - compared to 10 years ago, do you have more or fewer devices which use electricity in your house ? How likely is it that any of the electricity companies will go belly up - or even stop paying dividends ? Is there a likely replacement for electricity on the horizon (even the distant horizon) ?

The issue seems to be accessing that dividend stream at the best possible price - and there are lots of tools and models which we can use to do that.

[Hoop]

I seem to remember that CEN had an IPO price of $3.10, and over the next few years traded down to $2.50. ....

Yes GTM you are correct listed at $3.10 in May 1999...I have no idea why I thought it was $2....Can't use Telecom listing as an excuse as it is reported as being public floated at $1.82 back in 1991.


In Hindsight... we* now need the good dividend yields to make up for the presently poorish capital return (based on real NZ$) using the continuous Buy and Hold strategy since listing.

*Disc: Mr Hoop has no shares in CEN atm

[troyvdh]

GTM...you are my hero....That is why myself and many others are so suspicious...as i have stated so often ...so often....its so long ago...You GTM will probably remember...the difference between the purchase price (from the govn't to CEN )and value of asset ..so many years ago ...was jawing dropping...perhaps over a billion...Im not kidding...

...whilst driving today through Bendigo...Clyde...today in brilliant sunshine....I was a thinking....I will not go on....

...years ago i remember valuations being banted around...being 10-12......I sold some at 9....not enough....

...I am a listener of RNZ....some intellectual joker said today (with CR) that the world could not sustain the energy requirements in 20 + years..... of refrigerators alone...given the increased us of electricity...et al.........he ..said a lot more....

....anyways....may we remain staunch against another "under arm"...from Oz...it will happen....

PS ...if any folk believe that I am being "over the top"...please tell me....

...oops sorry...hold over 8000 cen...

[ratkin]

All these electricity floats coming up will keep a lid on CEN shareprice for sometime. Especially if they floated at a nice
user friendly price

[fish]

Possibly-I think this might be part of the reason for the drop in cen price .
However will be a lot of promotion of the value of electricity generators and if cen listing is a precedent we may be limited to a small number of shares .
I think the 2 dividends i get from cen before mighty river power is listed will pay for my allocation .

[Hoop]

All these electricity floats coming up will keep a lid on CEN shareprice for sometime. Especially if they floated at a nice
user friendly price

Agree ..that factor would create strong sideways pressure...hopefully with enough oscillation for Belg and I to range trade within.

I wondered what the May 1999 CEN listing price of $3.10 be worth in 2011 NZ Dollars..For the record that CEN 1999 listing price is worth $4.31 in today's NZ$$$ currency
courtesy of the NZ Reserve Banks Inflation Calculator tool

CEN closed today $4.82 up 5 (1%) So after 12.5years it has preserved its capital in real terms and a lot better compared to money in the bank earning interest.

[percy]

[

CEN closed today $4.82 up 5 (1%) So after 12.5years it has preserved its capital in real terms and a lot better compared to money in the bank earning interest.[/QUOTE]

Thank you Hoop;that's really what is important.

[ratkin]

In the retail buisness another factor which cannot be underestimated is the proliferation of online price comparison sites.

Its early days in New Zealand , however in the UK the price comparison sites have resulted in a massive increase in]competition to cut bills. With just a few clicks of the mouse a consumer can go online , see exactly which provider is going to be the cheapest , in less than a minute they can switch provider to any they choose.
The days of sticking with one provider are ending , it used to be , and in this country still can be too much effort to bother switching . However that will soon change , and if the example in the UK is anything to go by it will force the retail providers to cut prices, and therefore margins