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24-04-2015, 02:47 PM
#1071
Banned
Baa fair enough, solar is very long term.
Speculators for yield may buy at $1.90 but investors have recycled their investment into more reasonably priced companies. The yield is misleading as it is free cashflow not profit so is not attractive for a no growth investment like MEL.
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27-04-2015, 08:14 PM
#1072
The performance of MELCA as we reach the point where holders must pay up another 50 cents is interesting. Usually the price of the head shares {melca in this case} drop and then become volatile as investors sell to raise funds for the next instalment. Not in this case, which suggests that the market is happy to pay up and hold the shares.
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27-04-2015, 08:19 PM
#1073
El Toro~
mainly because the selldown has already happened, down from above $2.10 to where we are now, tells me Mr. Market needed funds to pay the $0.50
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27-04-2015, 08:30 PM
#1074
Originally Posted by PSE
Baa fair enough, solar is very long term.
Speculators for yield may buy at $1.90 but investors have recycled their investment into more reasonably priced companies. The yield is misleading as it is free cashflow not profit so is not attractive for a no growth investment like MEL.
I'm not sure how yield can be misleading, yield is simply a mathematical calculation. The lower the share price, the more attractive the yield becomes, particularly for a company with free cashflow that accumulates in a low/no growth investment, which is paid out as dividends to shareholders. The yield may never be better than it is/was for IPO buyers, but there will be plenty of kiwi investors interested in the yield opportunity as MEL's share price declines to a mathematical attraction. Not everyone here is fixated with company growth, if they are they probably wouldn't be looking at the energy sector. These energy company's just make a lot of money over and above that which is required to run the company and pay out a handsome percentage to investors. Is that the definition of a yield play?
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27-04-2015, 08:37 PM
#1075
Originally Posted by dingoNZ
mainly because the selldown has already happened, down from above $2.10 to where we are now, tells me Mr. Market needed funds to pay the $0.50
Portraying the IPO's as 'needy' for cash is just one perspective. Another viewpoint may be that it was prudent to sell a very small percentage of shares which had reached speculative prices, in order to fund the instalment which will keep the investor in the yield game for the long run. JMHO.
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27-04-2015, 09:00 PM
#1076
Banned
Originally Posted by Baa_Baa
I'm not sure how yield can be misleading, yield is simply a mathematical calculation. The lower the share price, the more attractive the yield becomes, particularly for a company with free cashflow that accumulates in a low/no growth investment, which is paid out as dividends to shareholders. The yield may never be better than it is/was for IPO buyers, but there will be plenty of kiwi investors interested in the yield opportunity as MEL's share price declines to a mathematical attraction. Not everyone here is fixated with company growth, if they are they probably wouldn't be looking at the energy sector. These energy company's just make a lot of money over and above that which is required to run the company and pay out a handsome percentage to investors. Is that the definition of a yield play?
My point is that a yield paid out of profit is not the same as a yield paid out of free cash flow.
A hypothetical company could make more profit than MEL but have a lower yield and an improving balance sheet, shareholders shouldn't penalise it for that.
If the market just considers yield they are being too hasty.
Yield play argument, this comes down to the next punter will pay more for it than I did. Maybe so but I am out for the count - not my game.
Last edited by PSE; 27-04-2015 at 09:49 PM.
Reason: shouldn't discuss other companies
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27-04-2015, 09:10 PM
#1077
Interestingly enough MELCA shares have gone up 61.02% during the past year while TPI have dropped 29.52%.
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27-04-2015, 09:18 PM
#1078
Banned
Originally Posted by percy
Interestingly enough MELCA shares have gone up 61.02% during the past year while TPI have dropped 29.52%.
Sorry I should stick to MELCA.
Last edited by PSE; 27-04-2015 at 09:51 PM.
Reason: other comlanies bad idea
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27-04-2015, 09:31 PM
#1079
Suggest you refresh the TPI thread PSE .
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29-04-2015, 10:22 AM
#1080
Originally Posted by airedale
The performance of MELCA as we reach the point where holders must pay up another 50 cents is interesting. Usually the price of the head shares {melca in this case} drop and then become volatile as investors sell to raise funds for the next instalment. Not in this case, which suggests that the market is happy to pay up and hold the shares.
Last day today to sell if one doesn't want to pay the 50c i believe. Agree s/p holding up ,hunt for yield maybe.
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