Contact Energy - CEN Chart

[IAK]

I'm over at the world geothermal conference this week. It appears that NZ companies and research institutions are very highly regarded. A lot of countries are looking to develop geothermal power stations, not only for electricity but also to reduce CO 2 emissions. The govt subsidies in the EU are ridiculous.

[GoldenStag]

In sailing circles there is the story of the man who spends six years restoring/building a boat. The question you have to ask is, is he a sailor? Or is he a boat builder?

So, is CEN a geothermal project services shop? Or are they an energy seller? I vote energy seller.

[macduffy]

In sailing circles there is the story of the man who spends six years restoring/building a boat. The question you have to ask is, is he a sailor? Or is he a boat builder?

So, is CEN a geothermal project services shop? Or are they an energy seller? I vote energy seller.

Do they have to be one or the other? Is the description of these companies - "gentailer" - inaccurate?

[GoldenStag]

Gentailer means generation and retailing. It doesn't include Generator Plant building. So, they generate it for wholesale and sell it for retail. I am happy if they stick with this model.

I accept that they have expertise in the geothermal plant building area, but they also have a very valuable opportunity to provide an excellent return for their shareholders. It doesn't happen often, so they should seize it with both hands. This includes letting the geothermal staff go, or spinning them off somehow, cutting the costs down to only generating and retailing, then providing a wonderful return to shareholders over the next five to ten years. It would be a great cash generating business model and is the way the other gentailers are going.

The other gentailers have outperformed the NZ50, whereas CEN, well, let's just say it isn't pretty. See the chart below...

CEN 12 month compared to NZX50.png

[GoldenStag]

At 553c today which by Snoopy's calcs gives a 5.9% gross dividend.
Not sure what is happening with this share. I just know I've lost quite a bit so far. Looks like the stag will be eating grass for a while yet.

[Snoopy]

At 553c today which by Snoopy's calcs gives a 5.9% gross dividend.
Not sure what is happening with this share. I just know I've lost quite a bit so far. Looks like the stag will be eating grass for a while yet.

CEN caught in the downwash from the Genesis profit downgrade GoldenStag. Not really justified IMO, and it has bounced strongly on the intraday trading since your post. Trading at $5.61 as I write this! But as you say, that yield of 5.9% (long term average) with the possibility of growth from a geothermal investment in Indonesia, or a capital return (or a bit of both?) to top that return up makes an attractive investment case.

I managed to buy a small parcel today at $5.50 to add to my holding. That was based on the gut feeling that investors wouldn't let it slip below $5.50, a feeling that has so far proved correct. Average price paid overall is now $4.81, with a steady stream of decent dividends to add to my return over the years. My original holding was bought at float time (1998)! I have added to that since both through buying more and the dividend reinvestment scheme as funds permitted. Have never sold any. Owning CEN shares today isn't a get rich quick scheme. But it has proved a great core portfolio investment.

SNOOPY

PS Share price closed the day at $5.68! I sure nailed the timing on this purchase today.

[trader_jackson]

https://www.nzx.com/companies/CEN/announcements/264737

Should provide a lift to the share price no doubt...
(Relief rally)

[macduffy]

https://www.nzx.com/companies/CEN/announcements/264737

Should provide a lift to the share price no doubt...
(Relief rally)

See, they're good guys after all!

[Harvey Specter]

https://www.nzx.com/companies/CEN/announcements/264737

Should provide a lift to the share price no doubt...
(Relief rally)

Wow - I wonder how many sold out based on the change in plans. Will it gap up?

[RGR367]

https://www.nzx.com/companies/CEN/announcements/264737

Should provide a lift to the share price no doubt...
(Relief rally)

About time for an old boring stock