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Thread: Meridian Float

  1. #1846
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    Quote Originally Posted by boysy View Post
    Interesting to note the wholesale average price MEL and charging customers up 20% from last year must be helping the bottom line - expect a fantastic full year result ....
    One weather event winter does not a cash cow make. If the wholesale price trend flips, then next years result could be very different. The incremental value of MEL shares over FY2019 should be priced on what one year special dividend shareholders might expect.

    Quote Originally Posted by warren View Post
    Everyone knew it was a $5 stock (maybe much more actually). Have you stood on those gigantic dams --one after another--calculate the cost of building them today? (although the greenies would rule it out) so that makes them priceless!! Have you heard the greenies scream re burning coal and gas for electricity. Have you seen the growth of anything electric. Have you flown over our cities at night?
    Yep we all knew it was a $5 stock. <snip politics> Go Meridian I say .
    The problem with this kind of logic Warren, is that if the MEL share price shot up to $100 you would still be buying. Because there is no limit to how valuable you consider those hydro dam assets. There isn't the significant demand increase in electricity that you think is there -yet. Electric vehicles are still a sideshow, with the growth of double cab fossil fuelled utes dwarfing any growth in the electric car market. The winding down of power intensive industry in NZ more than accounts for any growth in domestic electricity consumption.

    I agree that dams of the scale that Meridian own are unlikely to be built again. I say that not only because the rise of the green movement have increased the value of rivers in their natural state. But also because the best sites have already been developed.

    The cap on the value of these dams will be determined by the cost to build alternative generation and storage. Despite recent advances in battery technology, it is very difficult to argue that the most cost effective 'industrial scale battery' today is a lake. But lakes are a finite resource, and other batteries are getting better and cheaper. Once the price of controlling a lake exceeds the price of alternative battery technology, then usage rights of lakes and their associated downstream turbines and dams will cease to increase in value. At that price point, the likes of MEL will be priced like a true utility again. And that means in 2019 dollars, taking today's share price and dividing it by a factor of two. Talking to a respected broker who is managing a share portfolio for an aged relative, he is advising his clients to reduce their MEL holding. He sees MEL as the most overvalued company in an overvalued sector, but is not advising clients to sell out completely.

    Let's end on a point of agreement though. At some point I agree MEL will be worth $5 per share. But the year in which that happens will probably start with the digits 21.. !

    SNOOPY
    Last edited by Snoopy; 19-06-2019 at 09:27 AM.
    To be free or not to be free. That is the cash-flow question....

  2. #1847
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    Hello Snoopy.
    What an excellent and interesting report. I actually agree with all you say. What I am hinting at is the appalling decision to sell this magnificent share for $1 down and fifty later!!!!! There was never ANY doubt to me that is was a dead cert $5 dollar share and everything about it has proved me right so far!
    Assets, green sustainable operations, good corrupt free management, dividends , product demand.
    No I don't envisage $100 but $10 ------- yes for sure .

  3. #1848
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    on fire 4.74 might be 5 by next week lol
    bull

  4. #1849
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    maybe by tomorrow jumped another 10c as i was typing lol
    bull

  5. #1850
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    Quote Originally Posted by bull.... View Post
    on fire 4.74 might be 5 by next week lol
    Could well by end of this week, touched high of $4.85 and currently $4.79.

  6. #1851
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    Wild ride up 5% at some stage just goes to show how illiquid this 11b co can be with a couple of hundred $ of value moving the MC by $500m ....

  7. #1852
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    Not far from $5, currently at $4.90 with strong bidding.

  8. #1853
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    Quote Originally Posted by sb9 View Post
    Not far from $5, currently at $4.90 with strong bidding.
    $5 wow by xmas will it be the $6? party lol
    bull

  9. #1854
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    $5 now.

    Crazy - and it also makes sense in the wider context of scarcity of quality and anticipated OCR direction. Part of me says this is a new economic reality of living in an asset bubble...but more of me says this situation will end in tears.

    Disc: Happy long term shareholder looking forward to many years of divs.

  10. #1855
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    I guess we are all enjoying it.
    A word that comes to mind is TINA [there is no alternative].
    Dangerous,however I think the music will continue playing, until interest rates start to go up.

  11. #1856
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    Quote Originally Posted by Tomtom View Post
    $5 now.

    Crazy - and it also makes sense in the wider context of scarcity of quality and anticipated OCR direction. Part of me says this is a new economic reality of living in an asset bubble...but more of me says this situation will end in tears.

    Disc: Happy long term shareholder looking forward to many years of divs.
    the reality for oversea people in a lot of countries is negative returns so even at $5 the yield looks pretty good but gne looks fab at 6% still
    bull

  12. #1857
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    Default This is a blue hen share (Blue chip plus)

    Quote Originally Posted by percy View Post
    I guess we are all enjoying it.
    A word that comes to mind is TINA [there is no alternative].
    Dangerous,however I think the music will continue playing, until interest rates start to go up.
    Hello Percy. I am certain of only 2 things at present.

    1. The world, including little NZ, has NEVER EVER seen pension funds like it --Trillions of $ close by in Aussie, why even over $90 billion in little NZ. These must have a home and they are growing faster than ever. Cullen fund, Kiwi-saver, SSRS, ACC Investment Fund. Geez wasn't Cullen a genius! (43 billion when I last looked)

    2. Any share returning close to 7% with huge rock solid assets and a classy market is gonna get no rest in its share price I can guarantee us that .

  13. #1858
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    Quote Originally Posted by warren View Post
    Hello Percy. I am certain of only 2 things at present.

    1. The world, including little NZ, has NEVER EVER seen pension funds like it --Trillions of $ close by in Aussie, why even over $90 billion in little NZ. These must have a home and they are growing faster than ever. Cullen fund, Kiwi-saver, SSRS, ACC Investment Fund. Geez wasn't Cullen a genius! (43 billion when I last looked)

    2. Any share returning close to 7% with huge rock solid assets and a classy market is gonna get no rest in its share price I can guarantee us that .
    Agree with both of your points.

  14. #1859
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    Quote Originally Posted by percy View Post
    …….. until interest rates start to go up.
    And that is the interesting point. When that happens....how quickly will markets drop ? Will they drop ? If one plans to move to cash.....will "we" be able to sell ?
    The last few years has in general been so so easy as markets have been steadily climbing. About the only mistake one could make is not being in !

  15. #1860
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    I wonder what a southern alpine fault rupture might do to the manapouri power station

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