MEL - Meridian Energy

[Beagle]

The only part of the review that may have an affect on the wholesale market is the requirement for generators to be more proactive in notifying any outages. However most do this already via Transpower's POCP website.

Exactly. The facts are N.Z's retail electricity process are 20% below the OECD average and 40% below what Australians are paying. There is no basis whatsoever for some of the fearmongering that's been going on by some others and market is clearly completely unfazed by the report. Holding long term for very safe yield.

[dreamcatcher]

Avge analyst TP $3.30 underweight with 4sells 1uw 3hold

Sold half today but retained cen ...........

[couta1]

Avge analyst TP $3.30 underweight with 4sells 1uw 3hold

Sold half today but retained cen ...........

My fair value is around $3.20-$3.30 so way overvalued IMO along with most of the other power companies hence wouldn't touch them atm just like SPK at $4.30ish.

[Beagle]

Power companies are trading on yield. Interest rates lower for longer = higher prices for power companies. Also longer term power futures have moved up materially in the last year and profits are also up. I would have said $3.30-$3.50 a year ago as the trading range but time has moved on, along with profits and long term power generation futures and with it the share price. Those wanting yesteryear prices probably won't be owning the gentailiers in the foreseeable future so will miss out on good reliable safe yield, its as simple as that. Nothing wrong whatsoever with the gross yields of MEL, GNE and CEN in my opinion even at the current share prices, happy holder of all 3.

[dreamcatcher]

Increased from $3.25 ..........new GS 12m Price Target $3.45 Neutral Rated

[bull....]

i agree with beagle valuations dont take into account the demand for income from people. with rates set to head lower in nz/aus gentailers offer a very attractive income compared to declining deposit rates

[Beagle]

Chris Lee reckons many people use the Gentailiers as a bond proxy what with bonds per se having such pathetic yields and demand for electricity almost entirely inelastic irrespective of price.

[percy]

Well I certainly do.

[bull....]

Chris Lee reckons many people use the Gentailiers as a bond proxy what with bonds per se having such pathetic yields and demand for electricity almost entirely inelastic irrespective of price.

bond proxy for sure and for that reason you should base your assumptions on the yield available.

i favour mel as best of the bunch , have all along but i view gne as the top trade based on yield

[percy]

To spread my "bond" risk I also brought GNE.
Both have well exceeded my expectations.