SP Ausnet

[Awamoa]

I have just read the following commentary in the latest Smart Investor and welcome comments.It sound like a good buy in this climate.

Some analysts believe electricity and gas distributor SP Ausnet(SPN) is one of the best places to park your money in these uncertain times because of its countercyclical nature.
The risks whether they are an economic slowdown or inflation or interest rates are relatively low in terms of their impact on SPN Austock analyst Andrew Chambers says."Its revenue stream is relatively secure The regulatory process to determine electricity tariffs would adjust for any adverse movements in costs.This isnt the only appeal of the stock.Sp Ausnet has a forecast yield above 10% which is especially enticing in a climate of falling interest rates.Also SP Ausnets distributions are generally tied to medium term inflation.Chambers believes this stock stands in contrast to many high yielding stocks particularly in the property sector where the quality of earnings and debt is a continual worry.SP Ausnet has a high gearing ratio of about 140%.They have recently gone through 2 major refinancings and its all gone really smoothly,Chambers says.The gearing is basically in line with other regulated utilities and the capital structure is very low risk.SPN is one of the best performing utilty stocks.In the 2nd half of the year it outperformed the broader utilities index.
However the bear eventually ends and the bulls return,stocks such as SPN could underperform as investors switch back to riskier stocks.Most brokers including Austock recommend buy SPN,there is a 12 month average price target of $1.35 on the stock.

[Awamoa]

Looks as if this company is now facing major Court action over the bush fires.
Its been my best performing investment over the last couple of months.Gone from 90cents to 110.
I think that will change tomorrow.

[Huang Chung]

I've heard DUET who have a similar sort of business is worth a look at the moment, but can't say I've actually done so myself.

[ananda77]

Orbis Investment Management...becoming a substantial holder...

Orbis provides investment management services to institutions and individuals through the Orbis Funds. They use their own research to select equities that are priced significantly below their assessment of their intrinsic value. They believe a focused portfolio of such equities will deliver superior long-term returns and, importantly, less risk of loss than the average equity portfolio. For investors seeking positive returns regardless of stockmarket trends, Orbis also offers Absolute Return Funds. These Funds invest in the Orbis equity portfolios and complement them with stockmarket hedging to reduce the risk of loss associated with declines in stockmarkets. Orbis Funds have performance-based fees.

...yield current: 9.25% = good enough to park some longer-term cash in a relative safe stock with potential to be nibbled away at a take-over

Kind Regards

[RRR]

Yes-it is one of the better quality income stock in Ozzie. I have held this since mid 2009 and have been buying ever since on weakness. Bushfire court case is not over yet and that is the only major risk in the short term. Many infrastructure/utility companies are looking good at the moment.

[Snow Leopard]

Great little company this:
They pay out regular dividends and nearly as regularly ask for them back with a capital raising.

So a few weeks ago they offered new shares at $1.00 a pop and instead of using my super fund to perform live experiments on trading techniques I went and bought lots sub a buck on market.

Since then the price as been slowly rising to $1.04 until the end of day today when the auction saw 13m traded ad $1.135 to be up 9% for the day.

best wishes
Paper Tiger

[Awamoa]

This Company is now in the ASX 100.It looks as if todays rise is from Fund Managers taking a position.

[RRR]

I sold just before the capital raising was announced for 1.11 and made a tidy 60% gain including the dividends reinvested since 2009 - not bad for a boring infra company. They raised capital in 2009 and again now in 2012 and I wonder why bother paying dividends and diluting it even more by DRP if they want to raise more capital!
My decision to sell was purely due to the fact that the dividends (the sole reason for investing in this stock) are taxed in NZ and LPTs in NZ offered a much better deal.

[Snow Leopard]

So not only do they blindly follow indexes, they also apparently blindly pay any price to buy (or sell) them at a well signaled time.

and they get paid for this?

best wishes
Paper Tiger ;)

[shane_m]

origin energy - ORG is another company to consider, from memory ORG have the highest % of customers. Although these types of company sound good there are regulatory risks like the carbon tax etc. I also need do some paperwork on utilities.

[cloggs]

I only bought into SPN yesterday and then today an anouncement assuring us they can fulfil their liabilies after dividents are paid on 29 June. Is this just because of a requirement in Singapore or have I missed something.

[Snow Leopard]

I only bought into SPN yesterday and then today an anouncement assuring us they can fulfil their liabilies after dividents are paid on 29 June. Is this just because of a requirement in Singapore or have I missed something.

Standard notice issued every time a dividend is about to be paid.

best wishes
Paper Tiger

[cloggs]

Thanks PT.

[Snow Leopard]

Trading in the $1.20's, a price last seen nearly five years ago.

Peoples must be buying for the cash return (of just over 8c a year)?

As nice an uptrend, if not as steep, as anything else.

Best Wishes
Paper Tiger

[Snow Leopard]

Singapore power who owned 51% have sold a 19.9% stake to State Grid China:

http://stocknessmonster.com/news-item?S=SPN&E=ASX&N=389824

Best Wishes
Paper Tiger

[Snow Leopard]

What is now Ausnet Services is still in a portfolio of mine. As they announced a dividend (4.265cps) the other day and it has been setting new highs I thought it time to give it a mention.

Since last posting the share price has moved in that erratic way shares do from $1.23 to $1.50, a compound growth of 7.9%pa and has also paid out nearly 21c after tax, which if doing it the simple way gives you 13.5% pa (doing it the complicated would give a slightly higher figure but it is not worth the candle).

Not to shabby, heh?

Best Wishes
Paper Tiger

Disc: Just a reflection on recent history and not a recommendation to buy it.