Contact Energy - CEN Chart

[percy]

I went to an IFT presentation a week ago.Tim Brown was the presenter.Yes if the price was right IFT would buy it.Not a lot of buyers about.The NZ power companies with the Govt holdings are not buyers.No there would be no fit with Trust Power.

[Joshuatree]

Good hot point Percy. IFT Merger with Trustpower mentioned

Origin selldown to make Contact with Infratil | afr.com

[Crackity]

Good hot point Percy. IFT Merger with Trustpower mentioned

Origin selldown to make Contact with Infratil | afr.com

Maybe a IFT / NZ Superannuation Fund joint deal? I still rate this possibility as an outside chance at best and think any deal is more likely to be to an offshore party or parties.

[Joshuatree]

Contact /Infratil /Trustpower why not. No NZ Govt holding any Contact.

[percy]

Good hot point Percy. IFT Merger with Trustpower mentioned

Origin selldown to make Contact with Infratil | afr.com

Yes I see the merger with Trust Power was mentioned.
IFT's Tim Brown said they did not see CEN as a fit with Trust Power.
He also said he did not think Tiwai Point smelter would be closing.

[Joshuatree]

Its CEN not CNE and Contact is not owned by the NZ Govt ok. Good. Where there is smoke there is fire. A good chance and alogical one of a linkage between the 3, classic Infratil move imo. I was hoping some Contact come to me re $4.50 but could be wishful there.

[Harvey Specter]

Maybe a IFT / NZ Superannuation Fund joint deal?

They will no doubt be looking at it - both would look at any large NZ infrastructure play. The questions is whether the price is right and future growth potential. TPW is looking overseas (Oz windfarms) for growth so I dont see why they would be interested in CEN given limited NZ growth options.

[percy]

Its CEN not CNE and Contact is not owned by the NZ Govt ok. Good. Where there is smoke there is fire. A good chance and alogical one of a linkage between the 3, classic Infratil move imo. I was hoping some Contact come to me re $4.50 but could be wishful there.

Sorry have corrected my post.Trouble is I own neither CEN or IFT.
Tim Brown said they had thought CEN was too dear for them, and had never thought it would come on the market at anywhere near what they would be prepared to pay.
I think they have been very busy "doing the numbers."

[Snoopy]

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.

Since I wrote the above post, Contact has paid a special dividend of 50c per share. So my equivalent purchase price for that last parcel of shares is now $5. As I write this, the share price is $4.90, so even cheaper!

When purchasing shares I always like to stack up any potential purchase with any alternative that is out there. Genesis Energy is also an electricity gentailer that, like Contact, has natural gas interests. So how do the two stack up?

Dividends are all fully imputed.

	Contact Energy	Genesis Energy
Share Price	$4.90	$1.41+31c(Kupe)
Projected eps (FY2015)	26.2c	6.4c+2.6c(Kupe)
Projected dps (FY2015)	11c+15c=26c	8c+8c=16c
Gentailer PE	18.7	22.0
Earnings Yield Gentailer (FY2015)	7.4% (gross)	6.3% (gross)
Share Price for 6% yield (fair value)	$6.04	$1.48+$0.31
Discount from fair value	19%	4%
My Investment Response	Buy	Hold

This table is behind the reason that I added to my CEN holding today. Most of the extra discount is I believe rated to the uncertainty surrounding Origin's controlling stake. But what a wonderful opportunity that gives for we value investors to top up!

SNOOPY

[Joshuatree]

Cheers Snoopy. Re the overhang from Origin I'm awaiting what i hope is abetter op when /if their CEN shares hit the market at a discount.