MCY Mercury NZ ( MRP Mighty River Power)

[King1212]

Hi King. I wrote the above post in October 2016, before the current weather pattern that was favourable to MCY became obvious.



Your points above I agree are all worthy of attention, but just to give them some context:

1/ MCY have no plans to build a new power station in the declared future. That means that free cashflow is likely to significantly exceed earnings. And that points to the likelihood that dividends will not be fully imputed over the next few years.

2/ Population increase should underpin higher earnings in the medium to long term.

3/ Significant night time charging of EVs is a speculative long term earnings driver. Some say EV's are only a stop gap technology before more widespread adoption of hydrogen powered vehicles.

4/ The tie up with 'Trina Solar' I do not see as significant. In NZ, the timing of peak solar generation does not match peak load. So we are still reliant on advances in battery technology to make the use of solar a mainstream profit driver.

5/ Good rain over the last few months is likely a 'weather event'. It might influence a higher one off dividend of a cent or two, but is not a long term value driver.

6/ Tiwai Smelter, along with the parent company's Australian aluminium manufacturing assets are for sale. Tiwai doesn't have the power supply issues that Australia has. It looks economic for now, but it could set power industry earnings back for 5-10 years if it did close. My feeling is that Tiwai won't close. But that doesn't mean there is no risk of it closing. And that smaller chance of closing is still a risk that you should build into your investment equation.

Given all the above, I would suggest that now is not a good time to invest in Mercury Energy. There is nothing wrong with the company, and you can make the argument that it is better managed than ever. However, it looks to me as though all of the good news is already built into the share price. I intend to remain a Mercury Energy shareholder for the foreseeable future. But is has crossed my mind that now might be a good time to reduce my holding a bit.

SNOOPY

discl: have held MCY since it was floated.

thanks snoopy....

it it appears to be very hard to predict the market. I sold my HBl at $1.64...that time a lot of selling recommendation...but HBL is keep going up wish I kept...

anyway...can not resist the juicy one which come in 2 weeks ish....

thanks for your reply

[Fatboyj]

discl: have held MCY since it was floated.

When these were floated by Mr Key was there an incentive to hold on to them for 3 years? Or something like that?

Can you recall what date they were floated, how much you paid at the float date and how much you paid all up please?

And if you or anyone else has the same info for Meridian too thanks. I've googled for the info but its not easy to find.

Reason I'm asking is I had viscous mortgage payments in those days and had no cash to buy into any other investment or the floated gov'n shares. Recent insurance payments have freed me and got my brain working on new ways to invest.
Shares.
Crypto.
Lending money to YOLO generation.

I'm hoping for another National term and announcements of SOE floats.

[trader_jackson]

When these were floated by Mr Key was there an incentive to hold on to them for 3 years? Or something like that?

Can you recall what date they were floated, how much you paid at the float date and how much you paid all up please?

And if you or anyone else has the same info for Meridian too thanks. I've googled for the info but its not easy to find.

Reason I'm asking is I had viscous mortgage payments in those days and had no cash to buy into any other investment or the floated gov'n shares. Recent insurance payments have freed me and got my brain working on new ways to invest.
Shares.
Crypto.
Lending money to YOLO generation.

I'm hoping for another National term and announcements of SOE floats.

I held MRP from IPO till mid last year (selling out at $2.915 and buying into Heartland)
The incentive was to hold for 2 years and you got 40 bonus shares for every 1000 shares you held (GNE had a similar bonus - although was much sweeter) - the bonus shares were not dilution of shares, simply transferred from the governments share (ie the government had 53% or something, and after the bonus shares were transferred to holders now holds 51%).

The IPO price was $2.50 and at once stage MRP was trading at $1.90 due to the thread of power regulation in the 2014 election. After the initial IPO jump where MRP hit $2.70 (I think) on IPO day, the shares basically went only down and took 6 ish months (ie till after the 2014 election) to start trading above their listing price. They are now well above their listing price, and have always paid a nice (although not the best-in-sector) dividend.

I don't think there will be any more SOE floats (not sure what else there is left to sell - at least stuff that isn't already listed). The other one that was talked about at the time was Solid Energy but that $1.4 billion dollar company was sold to Bathurst Resources about a year ago for a bit under $50m (disclosure: holding Bathurst Resources).

Hope that helps

[stoploss]

When these were floated by Mr Key was there an incentive to hold on to them for 3 years? Or something like that?

Can you recall what date they were floated, how much you paid at the float date and how much you paid all up please?

And if you or anyone else has the same info for Meridian too thanks. I've googled for the info but its not easy to find.

Reason I'm asking is I had viscous mortgage payments in those days and had no cash to buy into any other investment or the floated gov'n shares. Recent insurance payments have freed me and got my brain working on new ways to invest.
Shares.
Crypto.
Lending money to YOLO generation.

I'm hoping for another National term and announcements of SOE floats.

Meridian (MEL) cost $ 1.00 at list and then a further 50 cents was payable a little bit later .So $ 1.50 has been paid all up for the shares currently listed . Has paid out some pretty decent dividends along the way .
Sharesight tells me I have made 33.65 % PA on the holding . The figure may differ for others as I sold some almost a year ago,but still holding the balance.

[fish]

The cost of solar is now below the cost of new generation and in the medium term the value of the hydro dam starts to drop . The revaluations reduce.

I may be a bit slow on the implications of this.
Solar has a great future but only when battery/storage solutions can also match.
Solar produces power when we least need it.
I believe hydro is the best way to complement it.
To me the most important metric is cash flow after subtracting interest,operating costs and depreciation .
I cannot see solar generation matching the cost hydro in my lifetime and thats before the real conundrum in managing to sell it .If we had a lot of solar its going to be producing at a time when power prices will be close to Zero.
Who would invest in that kind of technology-maybe the greens?

[Onion]

When these were floated by Mr Key was there an incentive to hold on to them for 3 years? Or something like that?

Can you recall what date they were floated, how much you paid at the float date and how much you paid all up please?

And if you or anyone else has the same info for Meridian too thanks. I've googled for the info but its not easy to find.

Reason I'm asking is I had viscous mortgage payments in those days and had no cash to buy into any other investment or the floated gov'n shares. Recent insurance payments have freed me and got my brain working on new ways to invest.
Shares.
Crypto.
Lending money to YOLO generation.

I'm hoping for another National term and announcements of SOE floats.

Sharesight reports for me:

MEL 71.23% (52.25% capital gain + 18.98% income gain, sold a few MEL)
GNE 32.61% (19.86% + 12.75%)
MCY 19.47% (10.86% + 8.61%)

[horus1]

Fish , it is not about the cost it is about the price the customers pay,a lot higher than the cost of generation. Have alook at what Powerco and some distribution companies are starting to do. Disconnect remote customers. The cost of solar and batteries follow Moores law , 15% reductions per year.Usage per customer is declining.

[Zaphod]

Fish , it is not about the cost it is about the price the customers pay,a lot higher than the cost of generation. Have alook at what Powerco and some distribution companies are starting to do. Disconnect remote customers. The cost of solar and batteries follow Moores law , 15% reductions per year.Usage per customer is declining.

Just to add to this, part of PowerCo's rationale is that these systems fall outside of the regulated market, which allows them to raise additional revenue streams without the spectre of price controls.

[horus1]

Good on them . In 10 years time won't need a regulator. I will not own generator shares ,look at RWE.

[fish]

Fish , it is not about the cost it is about the price the customers pay,a lot higher than the cost of generation. Have alook at what Powerco and some distribution companies are starting to do. Disconnect remote customers. The cost of solar and batteries follow Moores law , 15% reductions per year.Usage per customer is declining.

As soon as we get a cold spell demand soars as high as ever.Our population is growing so demand is steady despite customer usage declining.
I look forward to having solar in the future but will have to stay connected to the grid as I am not going powerless in winter and dont feel batteries are as cost-effective as hydro is in storing energy for when the sun doesnt shine.
I dont know much about distribution companies having sold my shares in vector years ago but can see batteries being more of a problem for them