Contact Energy - CEN Chart

[workingdad]

I'm sick of watching such a price roller coaster and knowing I could've bought and sold a few times to make a few gains. - timid buy and hold investor.

Roller coaster implies ups and downs, since ex divvy only seems to be going the latter rather than the former.....

I bought some more today so have both pre and ex divvy but notice the morning star recommendation hasn't helped much haha

[Goldendigger]

Well I sold a while ago for 710c which was a good return from my 468c buy in, unfortunately I decided to buy again at 620c to secure the 50c fully imputed dividend... I expected a drop in price after the record date but not a big fat -14% in my portfolio!

[fish]

Well I sold a while ago for 710c which was a good return from my 468c buy in, unfortunately I decided to buy again at 620c to secure the 50c fully imputed dividend... I expected a drop in price after the record date but not a big fat -14% in my portfolio!

Expect the unexpected.
Don't beat yourself up when the price drops after you buy-on average it will happen 50% of the time!.
If your decision to buy was sound the sp will rise sometime in the future to give you a nice profit.
In the meantime enjoy the dividends.
Quite a few of us are buying-I also bought more yesterday-my rational is based on many factors-one is the return of capital.
Have you considered what shareholders are likely to do with this-I am using part of mine to reinvest-and the best time is when its oversold such as now.
Sure I wont receive the dividend until after I have to pay for the shares but that is not a problem with a margin lending account.

[Joshuatree]

Rumour going round the bourse that Origin is looking to sell its holding of Contact.

[macduffy]

Rumour going round the bourse that Origin is looking to sell its holding of Contact.

From today's SMH.

http://www.smh.com.au/business/origi...14-ghngr0.html

[GoldenStag]

This confuses me. The sale of Origin's controlling stake in CEN is a good thing in my mind. And when you read the SMH article (thanks Macduffy) it gets even better with one of the scenarios being that CEN would have to dual list onto the Aussie market as well. I see this as quite positive for the share.

But... the flip side is that the NZ dollar is tanking and a lot of the big boys seem to be pulling money back to the US (from what I can infer). So there is big downward pressure on the share price.

I expected a little support for CEN on the back of this, and I expected a lot more support for the 50c divvy. But I've been getting it wrong a lot recently.

Is there something I'm missing about the Origin selling CEN that is a negative that I'm missing?
(I don't expect the sale to be a downward pressure because it would be done in a block sale/IPO thing but maybe I'm mistaken)

GS

[Harvey Specter]

Is there something I'm missing about the Origin selling CEN that is a negative that I'm missing?
(I don't expect the sale to be a downward pressure because it would be done in a block sale/IPO thing but maybe I'm mistaken)

IF they did a trade sale, the buyer would have to do a full takeover I think - so unless they wanted 100%, would have to be at a price they were sure people would say no (ie. they could probably get away with a small premium to market). More likely is selling to institutions which being $2B worth, would have to be at a discount to market. As such, Insto's have no incentive at the moment to support the shareprice as it can only work in their favour if it drops.

[macduffy]

Now that Origin has shelved thoughts of "encouraging" CEN into offshore ventures I wouldn't have thought that a sale of their stake would have a significant effect on CEN's shareprice. It would remove the future possibility of any conflict between the interests of Origin and minority shareholders, should the former revive its ideas about overseas expansion for CEN at any time but on the other hand a lot would depend on where the Origin shareholding went.

Plenty of scope for speculation about that and whether a sale actually happens, I would have thought.

[Snoopy]

From today's SMH.

http://www.smh.com.au/business/origi...14-ghngr0.html

The two most important quotes from the article as I see them:

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"What I've said in the past is that Contact plays an important role in our credit rating because of the way the agencies calculate the credit metrics. That role is no longer as significant and therefore Contact is like any other asset in the business," chief executive Grant King said.

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Origin's rating was cut to BBB- in April by Standard & Poor's, which pointed to the absence of any action taken by the company to support its balance sheet despite the drop in oil prices.

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It is hard to conclude anything else from here that Origin's controlling stake in Contact is definitely up for sale. I guess I should have figured it out earlier when with the announcment of the 50c special dividend cleaning out the impuatation credit account. Brokers/Institutions did make this very point, even though it was outright denied by Origin at the time.

Perhaps this is the appropriate time for NZ Government to step in and buy back the controlling stake in NZs best run gentailer?

SNOOPY

[sb9]

Excerpt from CEO's letter today to shareholders:

Revised distribution policy
Our Board has concluded that we can support increased distributions to shareholders and as a result has revised our distribution policy to target an average ordinary dividend equivalent to approximately 100% of underlying earnings after tax1 (previously 80%). Contact expects free cash flow to be in excess of the ordinary dividend level described above and will make additional distributions in the form of special dividends or share buybacks.

Could expect more dividends to shareholders in times ahead...