Originally Posted by
BlackCross
MorningStar have a valuation this morning. of $3.10
:...We have ceased coverage on Infratil. We periodically adjust coverage as necessary based on stock outlook, client demand, and investor interest. Infratil is overvalued following a strong share price rally during the past two years, and we think further strong gains are unlikely.
The outlook for its portfolio is mixed. Trustpower and Wellington Airport are mature, moaty businesses which should generate moderate earnings growth over time from reinvesting in their assets. Canberra Data Centres is growing quickly and generating strong returns by rolling out more capacity to accommodate the Australian government's need to digitise its huge amount data.
Other assets are not as attractive. Tilt Renewables in Australia and New Zealand and Longroad in the U.S. will spend large sums building new wind and solar farms, though we doubt returns will impress given huge numbers of competing renewable energy developers. We are also not overly enthusiastic about its retirement operations. Retirement living has proven to be a difficult industry to make profits, despite the tailwind from ageing populations. NZ Bus appears to be stabilising after the loss of some major routes to competitors and is likely to be sold. Similarly, Perth Energy has returned to profitability and is likely to be sold. ..."
Make of that what you will.
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