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07-10-2013, 11:47 AM
#211
Originally Posted by snapiti
me thinks if the US goverment does not get thier **** together, well before the meridian offer close's, the meridian offer might be a complete flop.
Traditionally during US market down turns it has been the worst time to bring an IPO to the markets.
If this turmoil continue's maybe Mr Gaynor will get his christmas wish granted and pick up the IPO in meridian for $1.40.
Agree and nobody's talked about that up until you mentioned it and its a real risk that nobody seems to be factoring in. I rate First N.Z's research as better than anyone else and note they rate the company based on a comparitive PE basis to the other listed power companies at $1.43 - $1.60 but I don't agree with their risk assessment on either the smelter situation or Labour / Greens and believe they are materially underestimating the risks as i perceive them.
People are paying a PE of ~ 20 times in a zero growth industry with major risks of 41% of supply going to a smelter that's highly likely to close and when it does people seem to think it'll be easy to transfer that supply elsewhere, (something i'm not convinced of). Then we have the Labour Greens groundswell of support building on the fact that Mr Key stopped listening to average Joe Bloggs quite some time ago. All this against a background of real increases in electricity prices of circa 80% over the last decade to such an extent that many average families are struggling to pay their power bills and those that can are putting in efficient heat pumps and better insulation. Some think demand growth will get back to its long term trend after many years of zero growth, I am not convinced. New supply already in the pipeline coming on stream this year and next will further effect the present over-supply situation.
Too add insult to injury buying back an asset we as taxpayers already own feels like some sort of quassi taxation to me. I can see why people would look at this as an income stock but there are really serious risks with this stock, not the least of which is the timing of the float. I avoided the slow river power value destruction and will also sit this one out. My 2 cents.
Last edited by Beagle; 07-10-2013 at 11:57 AM.
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07-10-2013, 12:36 PM
#212
Thanks for your very lucid analysis of the prospects, relating to our buying our own stuff back, from an increasingly dictatorial 'government'.
The terrorists we should be afraid of - and protected against - are those out-of-touch public servants (!?) whose world no longer seems to encompass the NZ public - unless you have links to BIG business or Multi-nationals.
The destruction of our freedoms and way of life, is coming increasingly, from within with the robbers running the show.
"The opposite of courage is conformity" - Rollo May
“Those who make peaceful change impossible, make violent change inevitable.” - John F. Kennedy
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07-10-2013, 01:12 PM
#213
Originally Posted by pietrade
The destruction of our freedoms and way of life, is coming increasingly, from within with the robbers running the show.
I think there's a "Raised Garden Bed using Organic Compost and Recycled Wood" thread in the Investment Strategies section if you'd find that type of investment more ethically sound?
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07-10-2013, 11:22 PM
#214
Member
With the current situation in the USA and what looks like an increasingly high chance Labour/Greens will take out the next election. I am having major second thoughts about Meridian. It looks great for 2 years of income. However I feel 2 years in DIL, RYM, PEB or SUM could net more in growth.
If its true Meridian will be hit hardest by the planned one buyer electricity model. I might wait, perfect buy in time would be Labour/greens winning election during a drought in south island. I feel even though most believe the policy would take 4-5 years to implement the SP would be hit hard on news that National wouldn't have the majority.
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07-10-2013, 11:46 PM
#215
I think the more small shareholders, as in the general public, get cold feet, the more the institutions will be smiling.
I wouldn't be surprised if the $1 instalment receipts list at a tidy premium.
Disc. I have been allocated quite a few so I'm biased.
Last edited by biker; 07-10-2013 at 11:47 PM.
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08-10-2013, 08:28 AM
#216
I'm inclined to agree, biker.
There are risks in all investments and we can always find reasons not to buy, but to have all the risks line up in a "perfect storm" against Meridian seems to be taking risk aversion a bit too far for an equity investment.
Disc: Taking a modest position.
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08-10-2013, 08:39 AM
#217
Originally Posted by macduffy
I'm inclined to agree, biker.
There are risks in all investments and we can always find reasons not to buy, but to have all the risks line up in a "perfect storm" against Meridian seems to be taking risk aversion a bit too far for an equity investment.
Disc: Taking a modest position.
I share that sentiment. Meridian has got good assets that are providing some very good cashflow and despite the obvious risks, I am also taking a modest position, like I did with MRP. I should note though that I am not looking to trade but a long term hold with both..
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08-10-2013, 08:40 AM
#218
Originally Posted by macduffy
I'm inclined to agree, biker.
There are risks in all investments and we can always find reasons not to buy, but to have all the risks line up in a "perfect storm" against Meridian seems to be taking risk aversion a bit too far for an equity investment.
Disc: Taking a modest position.
I too agree with you and biker.
Sound assets at a reasonable price.
We are "well positioned."
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08-10-2013, 08:58 AM
#219
Regarding the Labour/Greens policy, one has to remember that it was discredited by the very overseas economist that they were relying on as wonky economics. Key will slaughter them in the debates unless they change tack a bit.
You will also note they haven't said anything in the lead up to this IPO - they should be politiciking like hell as the media would give them lots of free publicity in the year before the election on a key National policy which is apparently very unpopular.
Disc: going in slightly bigger than I did for MRP in the hope of regaining a bit ("definition of insanity is doing the same thing over and over and expecting a different result")
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08-10-2013, 09:06 AM
#220
I agree CJ that Labour/Green lack of comment about Meridian has been very notable by its absence ! It is definitely interesting.
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