MCY Mercury NZ ( MRP Mighty River Power)

[Bobcat.]

I'm waiting for the DJIA/S&P500 to suffer a sharp correction before coming in on bluechip utilities like MRP. I like the stock and the buyback will no doubt lift the shareprice at some point, but Equity markets have had such a climb lately, they are looking easily spooked. Note this week's impact of the DJIA and S&P 500 running out of steam on the ASX, and that's with a falling Aussie $.

I'll be buying when global market sentiment takes MRP below $2.

[Joshuatree]

They're both heading that way . Who needs a pesky tenant when you can sit back and watch the River go By (not dry)

[Wolf]

Why the sudden price weakness in MRP and MELCA??

[silu]

Why the sudden price weakness in MRP and MELCA??

Can't be political because the Nats increased its vote in the last poll.

http://www.roymorgan.com/findings/52...4-201311140325

[silu]

And MRP is the biggest loss maker in my NZ portfolio. I'm a pretty upset citizen and shareholder.

[Joshuatree]

I think its uncertainty, part political. Other polls suggest Labour Could be a threat. I know sophs who have sold and are putting their money into Aus whilst exchange rate is good. Instos could be doing the same.

[mouse]

|How to value a power company is the problem. Is it what they can charge the customer?
Or is it the replacement value of the complete generating system, including canals, dams and generating plant.
Or is it the actual cost of building the plant 30 years ago, plus running costs.

People were caught over exactly this issue with Telecom. Who thought they had some Divine Right to print money. Govt then changed the rules and the share price collapsed.
One thing is certain, both MRP and Meridian are long term holds and will pay good dividends for years to come. Sit tight and collect the dividends.
I of course agree with Belgarion.

[Harvey Specter]

|How to value a power company is the problem. Is it what they can charge the customer?
Or is it the replacement value of the complete generating system, including canals, dams and generating plant.
Or is it the actual cost of building the plant 30 years ago, plus running costs.

Depends on what you are valuing it for. For operating business, always value cash flow as cost (original or replacement) is irrelevant.

Comcom shouldn't get involved since not a monopoly.

Regulated industries you need to consider the RAB (regulated asset base) and regulated return.

[macduffy]

Comcom shouldn't get involved since not a monopoly.

We can love them or hate them but the fact remains that the Commerce Commission has a statutory role to oversee competition in regulated industries - of which the electricity industry is one of the major ones. Investors in this industry - that includes me - should do so with their eyes wide open!

[Harvey Specter]

We can love them or hate them but the fact remains that the Commerce Commission has a statutory role to oversee competition in regulated industries - of which the electricity industry is one of the major ones. Investors in this industry - that includes me - should do so with their eyes wide open!

True but hard to argue no competition. Every company has different prices and different suppliers are cheaper in different areas. Not an oligopoly like the oil/petrol industry.