GNE - Genesis Energy

[xafalcon]

With the short-duration electricity contracts that the Aluminium Smelter keeps winning, any certainty about long-term (even medium-term) outlook for NZ electricity generation demand/profitability is almost a wasted exercise. Until this "elephant in the room" is addressed by either closure or long-term contract periods the collective NZ electricity generation industry can't plan efficiently for future needs, or project future profit. This uncertainty costs everyone, except Rio Tinto. Under this cloud of demand & pricing uncertainty, a diversified company like GNE with oil & gas reserves appears lower risk to me.The lower price of oil has a negative effect, but gas is somewhat insulated from international prices as NZ doesn't have LNG infrastructure.

[bull....]

I think the smelter issue is being addressed 1000mw is leaving the supply - anyway good result

[trader_jackson]

Now surely, with interest rates being cut today, and further cuts on the horizon, GNE with its 9+% gross yield at current prices, over 3x that of the OCR, will rise??

Crazy stuff if it keeps in the $1.80's despite falling interest rates... (as I've said somewhere else on here should be $2+!)

[xafalcon]

Now surely, with interest rates being cut today, and further cuts on the horizon, GNE with its 9+% gross yield at current prices, over 3x that of the OCR, will rise??

Crazy stuff if it keeps in the $1.80's despite falling interest rates... (as I've said somewhere else on here should be $2+!)

GNE is a risk-off stock. The majority of investors don't care what NZ's OCR is. Centralised electricity generation is moving into it's twilight years (this twilight will last for many years). Electricity demand is flat. Competition is high leading to discounting (GNE currently offering $250 for 12 month sign-up = 8.3% discount). The high dividend yield is somewhat inflated by distributing amounts above net profit, which can't last.

So what will drive an increase in share price?

[horus1]

These shares are very similar to telecom about 10 years ago and the price path will be much the same. long term a bad hold

[arc]

NZX announcement 5:55pm 16-09-2015 shows 8 directors, from the CEO downwards, have all forfeited beneficial interest in shares held in trust ?... What does that mean/imply

[Snow Leopard]

NZX announcement 5:55pm 16-09-2015 shows 8 directors, from the CEO downwards, have all forfeited beneficial interest in shares held in trust ?... What does that mean/imply

For the official full answer read the 2015 report especially the bit about the Long term Incentive Scheme.

But the short answer is Genesis performance has been pretty poor.

Best Wishes
Paper Tiger

[Aaron]

Haven't Genesis lost some retail customers. Their cold calling hard sell bull**** isn't going to get me to sign up any time soon.
Disclaimer; Shares in MRP means loyalty to Mercury for now.

[trader_jackson]

I think GNE is still 'cheap' and I think they can hold the dividends per share up, although I doubt it will grow while the price of petrol is still under so much pressure. Still, if they can keep paying out 16 cents a share in dividends annually, even at a price of $2.27, this would be a yield of over 7%, about double what one would get investing in the average NZ savings account (with the prospect of further interest rate cuts), so I don't believe GNE is anywhere near fair value, but the market is a bit pessimistic about whether GNE can even maintain their dividend (which I do also understand), but I believe it (really) should still have a bit to run/increase before I would consider it at fair value.

[trader_jackson]

True words PSE, I do agree with where you are coming from, basically what I am saying is that it still (even in the $1.90's) looks a bit to cheap, maybe $2.30 is a bit to expensive, but somewhere in between is probably about right. (yes this is more macro/speculation, rather than DCF or some other analysis)

The question now comes to mind, why did it even reach $2.40?