-
13-02-2021, 12:52 PM
#1931
Originally Posted by Snoopy
The short answer is I think the 'thin air capital' adjustment to my valuation to my base price of $5.90 (post 1841) is still valid. I also believe my revised 'thin air capital' multiplication factor of 1.271 (post 1889) is valid.
My current Contact Energy 'fair value' share price valuation is now: $5.90 x 1.271 = $7.50 (up from the $7.42 you referenced before).
With the share closing at $7.20, CEN is therefore 'modestly undervalued' (by 4%). I prefer to buy my shares at a bigger discount to fair value than that. And I notice the closing offer price is still $7.55 (above fair value).
I wouldn't be surprised to see the share price bounce on Monday. But we shall see!
One more comment on where my investment style differs from some of my fellow CEN shareholders. I don't worry too much about even reading those monthly operational reports. I know they can be a pointer as to whether a year is going well or not, and maybe whether a special or increased dividend might be paid . But as long as the dividend policy does not change, I think many of these seasonal adjustments eventually average out. IOW they make no difference to the big picture of the long term investor. And long term I am. I bought my initial CEN holding at float time over twenty years ago, (although I do admit most of my holding has been acquired far more recently than that). Still I have never sold any. And as long as they keep satisfying my long term income target from my shareholding I doubt if I ever will!
SNOOPY
Last edited by Snoopy; 13-02-2021 at 12:53 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
-
14-02-2021, 09:13 PM
#1932
Post 2216 on the Mel thread
Originally Posted by Lego_Man
For those wanting some additional background, S&P just announced a change to their weighting methodology for the underlying index that the Blackrock ETF replicates. MEL are currently around 4-5% weights in this index which has at least 6-7bn of ETF money folowing it. S&P launched a review in response to the clear observation of the effects that their buying was having on a whole lot of underlying stocks in the index.
Now, effectively the MEL and CEN weights are going to be liquidity capped after the next rebalance which will happen at the end of March. Broker estimates are for up to 500m worth of stock to be sold by Blackrock for both to make this rebalance.
The price is tanking because local fund managers and instos are getting out ahead of the ETF selling wave. MEL is getting hit more as there was already less fundamental support (lower dividend yield).
-
14-02-2021, 09:36 PM
#1933
Originally Posted by Snoopy
One more comment on where my investment style differs from some of my fellow CEN shareholders. I don't worry too much about even reading those monthly operational reports. I know they can be a pointer as to whether a year is going well or not, and maybe whether a special or increased dividend might be paid . But as long as the dividend policy does not change, I think many of these seasonal adjustments eventually average out. IOW they make no difference to the big picture of the long term investor. And long term I am. I bought my initial CEN holding at float time over twenty years ago, (although I do admit most of my holding has been acquired far more recently than that). Still I have never sold any. And as long as they keep satisfying my long term income target from my shareholding I doubt if I ever will!
SNOOPY
But surely when CEN hit a totally irrational $11 the dividend policy was irrelevant. They have dropped 35% from that level and are still falling. That’s a lot of future dividends......
I sold at $11 because it made no sense not to.
I’ll look to re-enter when the S&P index and Blackrock sort themselves out.
-
14-02-2021, 09:49 PM
#1934
Some details of the S&P proposal (which are light on company by company specifics)
Initial consultation (9 Dec)
https://www.spglobal.com/spdji/en/do...t12-9-2020.pdf
Confirmation of what is changing (11 Feb)
https://www.spglobal.com/spdji/en/do...s2-11-2021.pdf
-
15-02-2021, 07:52 AM
#1935
Originally Posted by biker
But surely when CEN hit a totally irrational $11 the dividend policy was irrelevant. They have dropped 35% from that level and are still falling. That’s a lot of future dividends......
I sold at $11 because it made no sense not to.
Did the share price really get to $11? Looking back at the chart I see it did -even if it was a short lived spike- and with hindsight you certainly 'nailed the trade' Biker. Well done! I think $9 was irrational. So why didn't I sell at $11? It is the old question of 'if you sell, where do you put your money? I have a term deposit maturing with an interest rate of under 1%. I certainly don't want more of those. Even at $11, the CEN yield is better!
The other factor that was weighing on my mind was that I am still a little underweight in CEN for my liking and my average entry price is well under $5. So really I am well in profit and expect to remain so, no matter how low this dip goes. If CEN was a person, I would be on the sidelines of the swimming pool shouting :
"Dive, dive dive!"
Originally Posted by biker
I’ll look to re-enter when the S&P index and Blackrock sort themselves out.
By the time that happens it will be too late. The buying window for CEN is about to open.
SNOOPY
Last edited by Snoopy; 15-02-2021 at 07:56 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
-
15-02-2021, 08:42 AM
#1936
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
-
15-02-2021, 09:00 AM
#1937
Originally Posted by winner69
Maybe they shouldn't have paid out so much over the years?
Might not be the only power co suddenly wanting to raise capital for a new plant only to realize they've not just paid out everything but borrowed to do so...
-
15-02-2021, 09:03 AM
#1938
Originally Posted by trader_jackson
Maybe they shouldn't have paid out so much over the years?
Might not be the only power co suddenly wanting to raise capital for a new plant only to realize they've not just paid out everything but borrowed to do so...
....and slashed the divie big time
Snoops might need to review his dividend model.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
-
15-02-2021, 09:28 AM
#1939
dividends slashed alright , but in the context of things they were over - paying past div's anyway. so going ahead be lower div's on a higher amount of shares unless they significantly grow revenues.
glad i sold out near high's will be able to re-invest one day for double the amount of shares and a bigger dividend income because of that.
one step ahead of the herd
-
15-02-2021, 09:31 AM
#1940
Juicy. Big drop coming. $78m interim earnings for a $5b+ company and dividend slashed which was one of the only things keeping this pumping.. oh plus now they need to raise capital!?
Tags for this Thread
Posting Permissions
- You may not post new threads
- You may not post replies
- You may not post attachments
- You may not edit your posts
-
Forum Rules
|
|
Bookmarks