MEL - Meridian Energy

[PartyPooper]

As a rookie investor, getting burned by MRP early on was not fun at all. I'll stay well clear of Meridian until I know the price. Even then I think i'll wait till it goes live or look into it after the next election.

[MAC]

As a rookie investor, getting burned by MRP early on was not fun at all. I'll stay well clear of Meridian until I know the price. Even then I think i'll wait till it goes live or look into it after the next election.

Welcome to the forum PartyPooper.

That's a wise move, in this instance if you are unsure the best thing to do is to do nothing.

Meridian have a slightly different business model from MRP and CEL, they inherited the 'jewel in the crown' assets from ECNZ, very big well depreciated south island hydro cash cow plant.

But, the risks are also a little different, Meridian are more prone to dry year events and more prone to low wind years then their competitors.

Because of this it is probable that Meridian over time will be a little more volatile, as far as power companies go, and there may well be a better entry point to buy in during a future dry year event.

[peat]

wow looks too good to be true.


and it is.
paying out 1.5 x earnings in dividend to provide that yield.

[arc]

mel announcement

Meridian's retail sales volumes in July 2017 increased by 14.3% compared to July 2016

[CJ]

I don't think the proposed incentives are necessarily a reflection on Meridian the company but rather they indicate the govt's determination to make sure that the partial float is a success. I will withhold a view on the merits of Meridian as an investment until there are some hard numbers available.

agree, it is a mechanism to allow smaller NZ investors to buy more - like me ( say $6k now, $4k later). They could easily sell more than 15% to overseas investors.

[blackcap]

The thing is, offering it in installment receipts is not even a "lolly scramble". You the investor are "borrowing" the 40% later money at an implied interest rate anyway. So there is no real free money in this issue.
That said I may get into it as a stag as I see the govt maybe giving greater incentives to "mom and pops" than they did last time or at least make the price more firm before you apply. Will wait to see the full details first. But don't get fooled by high yeilds and paying later. That is just a facade to sell this thing easier.

[Wolf]

I'm probably going to stag it. Not interested in holding it long term.

[Joshuatree]

From craigs just now
$1 now
price set between $1.50 - $1.80
But for us capped at 60c ie $1.60
D/Y 13% on partly paids
9% on fully paid

[CJ]

From craigs just now
$1 now
price set between $1.50 - $1.80
But for us capped at 60c ie $1.60
D/Y 13% on partly paids
9% on fully paid

For some silly reason, I though the price cap would relate to the first payment, not the second - its going to make their admin harder doing it this way. It could have been a staggers dream though.

So now we have to try and figure out what the institutional price will be to determine if there is any value in the price cap.

[blakecb]

From craigs just now
$1 now
price set between $1.50 - $1.80
But for us capped at 60c ie $1.60
D/Y 13% on partly paids
9% on fully paid

Flip they are giving them away eh. If National get in again, these shares will be a little gold mine. If they don't, they won't. We have seen what political uncertainty can do to a dividend yield stock like Chorus....so they had to make it pretty sweet to get investors in....and they have. Although Chorus still sits under a cloud while offering around a 12% gross dividend yield...that's what it takes to keep the price from bombing when uncertainty is around. Maybe National observed that is the dividend yield required when faced with such uncertainty and obviously want to keep the price up until after the next Election.