I’m trying to figure out why GNE is 15% down in 12 months versus other gentailers up 10-15% over same period. A 30% swing compared to industry is rather significant.
Lower divs indicated, cap ex coming and variable generation expenses. I think less hydro at the moment. Just things I have read over the last 9 months here and there. I had a small holding.
……..and investors yield expectations beginning to revert to long term average ….they want a higher yield than what they we’re getting at 250
Reduced dividend hasn’t help and GNE still seen as relatively ‘risky’
Dividend was reduced to pay for current investments into renewables.
7 cents plus imputation credits every 6 months gives approx yield 8% p.a.
No obvious risk to this dividend
Additional Renewables in addition to thermal should make genesis less risky .
I’m trying to figure out why GNE is 15% down in 12 months versus other gentailers up 10-15% over same period. A 30% swing compared to industry is rather significant.
The removal of GNE from an index fund lead to the largest trading volumes since listing. This sustained selling is always going to hurt SP
The dividend has been reduced (Kupe revenue will now pay for solar and battery projects without any capital raise), which will hurt SP in the short term
Huntly unit 5 had a failure that took a very long time to repair, and the cost is still sitting on GNE balance sheet. Insurance will pay out eventually, but is taking a very long time to resolve. After Insurance, the failure will still cost GNE $25M
Recently a lot of money has been spent on improving Kupe gas output. Current indirect signs (Rankines running rather than CCGT) indicate this is not going as planned
High interest rates have and inverse effect on yield stock like GNE. And we all know that interest rates have stayed higher for longer than expected (or necessary). The RB governor's thin skin and wilful ignorance of basic economics is causing unnecessary pain in many areas of the economy (and labour reappointed him for another 5 year term)
Senior management has recently changed, and IMO they are not understanding their role in promoting the company as an investment opportunity that is currently significantly under valued
I'm pretty sure the SP will improve in the next 6 months as many of the above headwinds disappear or become tailwinds
I thought the market was more forward thinking and looking at operations reports they are increasing their market share month on month, renewables investment wise, national govt signaling oil and gas investment needed and supported.
I’ve had a couple of small bites in last few months and thinking about some more given it seems to be discounted compared to the other sector players but the SP weakness I anticipated to make it a buy signal hasn’t happened.
GNE current yield after tax 5.66% v 10 year Govt at 3.35% …..difference of 2.31% points
Since listing that difference has been 3.9% points but there is a case to say last few years is more relevant and difference is say 3.0% points
So to maintain that 3.0% points difference GNE would be a post tax yield of 6.35% ….implying a share price ofvabout $2.00
Here’s the updated chart of the difference between Govt 10 and GNE divie yield
Some would say that the difference is a reflection of ‘risk’. Seems punters see GNE less ‘risky’ than in the past and are prepared to accept what’s on offer. (My view is that GNE is still relatively ‘risky’)
Some will say this ‘analysis’ is a load of codswallop ..sobeit but it has served me well over the last couple of years iand avoiding the temptation to take a punt on GNE and avoided capital losses.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
I wonder if the Genesis share price benefits from the avalanche of cash that goes into KiwiSaver funds each fortnight . Its included in KiwiSaver funds right? Ok it's not included in mine, a default fund (the other power boards are) but it's probably in my other managed funds - nope can't see it in the list of NZ shares in either fund. Weird.
Well at least our very own NZ Super Fund will have a chunk I guess...just checking - nope they divested in 2017. Something about fossil fuels and coal.
Now I'm no expert but people have to be wanting to buy for the price to be bid up I think. Happy to be corrected.
CEO Malcolm Johns tells us the so-called ESG discount applied to the Genesis share price will be unwound because of his recently announced strategy …. discount probably more than 30% now
If so GNE shareprice could be about $3.50 …divie yield of 5.7% ….if he doesn’t cut the divie again
I think Johns is in fantasy land
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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Originally Posted by winner69
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