Contact Energy - CEN Chart

[bung5]

Thought the Tom Scott today was quite fitting ...

http://www.stuff.co.nz/dominion-post...cott-cartoons/

[Silverlight]

Origin's presentation last week had some interesting views on Contact, also aligned with the view that a Takeover is unlikely.

Train 2 for APLNG may need to be funded by earliest middle of the year, with a equity raising touted the most likely outcome, around $6b. Unless they raise $8b, they can't really afford to make an offer for Contact.

[fish]

Barnes said that once the 166MW Te Mihi geothermal plant was completed in 2013 that would bring to an end four years in which Contact had committed an average of $500 million of capital annually.
With current power prices and power companies indicating that there will be no new major hydro for decades my feeling is that the market will soon wake up to the large future earnings growth that is highly likely for cen long before it becomes apparent on contacts results.

[Winston001]

Must admit I'm deeply troubled by CEN. I bought on the original listing $3.15 thinking it would pay for my daughters first year at university. That was 13 years ago and the current $4.87 price doesn't even cover half her hostel fees. I haven't sold but am close to doing so - in disgust.

I've read commentary that Origin are stripping Contact and will make another takeover offer after having successfully driven the company down. Clever business for them but awful for the average investor.

[fish]

Relax Winston
You have forgotten the dividends or that you could have sold for $10 before the economic turndown .
Future profits look phenominal .They have done their investments and will soon reap the returns

[Silverlight]

Calculating the 10 year return is a tad under 8% per year, for the past 10 years, vs the NZX50 return of just under 6% per year, not a bad outperformance for a utility. However, Contact has returned negative 6% pa for the past 5 years, while the indes is only down 4% pa, so being disappointed in this time frame looks justified.

A holder from the start should calculate their return since the start though.

To reiterate Fish's comment, Contact have almost finished their long term capex cycle and from 2013 the cash flows are going to look good. Short term the SOE listings are creating negative volatility, but as Fish points out, the past investment programs are about to pay off over the next few years.

[Hoop]

Must admit I'm deeply troubled by CEN. I bought on the original listing $3.15 thinking it would pay for my daughters first year at university. That was 13 years ago and the current $4.87 price doesn't even cover half her hostel fees. I haven't sold but am close to doing so - in disgust.

I've read commentary that Origin are stripping Contact and will make another takeover offer after having successfully driven the company down. Clever business for them but awful for the average investor.

Never really followed CEN but hard to believe that their shareprice was about $10 not that long ago .... and today isn't much more than it was 9 years ago

Whats happened

Secular head winds are nearly always overlooked while holding long term shares....I'm not saying this is the sole cause of CEN lackluster share performance over the years..but it could be a significant part of the problem.

Winston I have written something with your quote on the Investing strategies and secular bear markets thread

[MANDRAKE]

Today's trading saw nearly 5M CEN shares change hands, and closed up. The OBV indicator is now well and truly rising (and has been creeping up for a few months now) meanwhile the SP just gets lower. Seems like a glaring bullish divergence to me. But of course this does not in itself constitute a BUY signal. Or does it?! In any case I'm interested. Pity Origin's interests in CEN don't seem to be aligned with those of the minority holders.

[fish]

Today's trading saw nearly 5M CEN shares change hands, and closed up. The OBV indicator is now well and truly rising (and has been creeping up for a few months now) meanwhile the SP just gets lower. Seems like a glaring bullish divergence to me. But of course this does not in itself constitute a BUY signal. Or does it?! In any case I'm interested. Pity Origin's interests in CEN don't seem to be aligned with those of the minority holders.

last months financial results should be out on monday . Suspecting they will reflect the higher wholesale prices i bought some more a couple of days ago at 4.63

[fish]

last months financial results should be out on monday . Suspecting they will reflect the higher wholesale prices i bought some more a couple of days ago at 4.63

Monthly operational data released-looks good on initial perusal- electricity -customer numbers steady but sold a lot more power and gas.
north island lake levels dropped by 10% and south up 3%.
Current -this minute power prices-over $400 in south and $150 in north reflecting increasing demand .