MCY Mercury NZ ( MRP Mighty River Power)

[mouse]

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.

The simple facts are that if power prices are 'regulated' then the power companies can switch off their highest priced generators. As has happened, where Govt had to pay to install a gas fired emergency generating set some years ago. So eyes wide open, but every developed country has to have a very reliable electricity supply.
To achieve this Electricity Generation should probably be run by the State. With our private enterprise model, a profit squeeze will lead to a systematic reduction of generating capacity.

[janner]

The simple facts are that if power prices are 'regulated' then the power companies can switch off their highest priced generators. As has happened, where Govt had to pay to install a gas fired emergency generating set some years ago. So eyes wide open, but every developed country has to have a very reliable electricity supply.
To achieve this Electricity Generation should probably be run by the State. With our private enterprise model, a profit squeeze will lead to a systematic reduction of generating capacity.

In other words mouse .. You are saying that Private Enterprise does not take into account the future !!..

This can only be done by Government !!..

Pass the Tui !!..

[mouse]

In other words mouse .. You are saying that Private Enterprise does not take into account the future !!..

This can only be done by Government !!..

Pass the Tui !!..

No. Not saying that at all. The Regulator has to be very careful because if demand is depressed today, and the Regulator holds prices down, then generation plant will be closed down. Shut. Dismantled. The Government will then have to pick up the pieces and provide State Subsidies. So, Regulation can only be very light, or possible disaster follows. With all the various electricity generators there should be sufficient competition to make prices reasonable. Eyes Wide Open, but in my opinion situation is not a problem at all. Also remember electricity prices can track up, but also track down. As can share prices. Supply and Demand.

[Bobcat.]

Looking at the charts, both MRP and TPW look to be priced more for a Buy than for a Sell, but I've been working other sectors for a while and admit that I'm out of touch with this one.

Apart from the increasing threats of a Labour/Green shift in policy and impact on company profitability, does anyone have a DCV or other comparison of the value of investing in these two companies?

TPW vs MRP.

Edit: Nevermind, I've found some good work by Snoopy and others in the Trustpower thread:
http://www.sharetrader.co.nz/showthr...&highlight=TPW

[Vaygor1]

If anyone knows MRP's position better than anyone, it is MRP's own Board of Directors.

They have decided there is no greater return (given a corresponding risk profile) they can achieve for their business (and shareholders) than buying their own shares back. Obviously because they consider them as cheap.

They announced they would buy up to 25 million shares or up to NZ$50 million worth and commenced 15-Oct-2013 to be complete by 14-Oct-2014.

Friday close just gone completed 1 month of buying back and I have been tracking it.

So, in round figures, at close of trading Friday 15 Nov 2013:
Amount of shares bought back: 6.84 million
Amount spent in doing so: NZ$15 million
Average $/share bought back: $2.19

If they do buy back all they have declared, they will likely reach the NZ$50 million mark well before 25 million share mark as I cannot see the shares dropping below NZ$2 and if so then not for long.

This means that after 1 month MRP are 30% of the way through the buy back process. Given the daily volumes traded on the market, MRP's buying has not been very aggressive to-date in my view, but so long as the shares stay around this price or lower and they maintain their current buying rate, they will complete the process before 31-Jan-2014. Nine months ahead of the deadline.

Draw your own conclusions, but if the board think the current price is a bargain, then it probably is.

[Vaygor1]

My conclusion is the whole buy back is politically motivated - consequently I don't believe any conclusion that MRP is great value can be sustained by what the board is doing.

A view you are well entitled to Belgarion. I am a self-confessed conspiracy theorist but don't think govt politics have too much part to play in MEL's buy-back decision, at least on this occasion.... Mind you, I haven't put my money where my mouth is and bought under $2.23 .... yet. :-)

[Tyro]

My conclusion is the whole buy back is politically motivated - consequently I don't believe any conclusion that MRP is great value can be sustained by what the board is doing.

The political return on capital has been much lower since the MELCA float. Any news on Genesis?

[warthog]

The hog suggests posters here consider the electricity market in California, as a data-point in the context of energy markets, free markets, and state intervention.

Also, if anybody here does not understand the concept of Moral Hazard, then they would, respectfully, be well-served to look it up and give it some consideration, but it is not straight forward. Ask BenB.

Politics and economy is not, as some would have everyone believe, a simple issue, but it *is* often boiled down in the media so even the most simple of people can think themselves informed, and even on occasion, an expert (which leads them to sometimes start posting here!).

[mouse]

The hog suggests posters here consider the electricity market in California, as a data-point in the context of energy markets, free markets, and state intervention.

Also, if anybody here does not understand the concept of Moral Hazard, then they would, respectfully, be well-served to look it up and give it some consideration, but it is not straight forward. Ask BenB.

Politics and economy is not, as some would have everyone believe, a simple issue, but it *is* often boiled down in the media so even the most simple of people can think themselves informed, and even on occasion, an expert (which leads them to sometimes start posting here!).

Depends on what morals have moral hazard!
Politics and economy are easily understood. When short of a bob or two, mint a few more. For banknotes, run the printing press. If things really get tough, sell the Country bit by bit. Tell the electorate you are spending the cash on Schools and Hospitals. Avoid telling the electors how you intend to pay to staff and run places. Economics is really simple, Get a Good Bubble Going.

[Wolf]

Has anyone got a valuation on MRP?
I had a go at finding the eps growth

EPS-
2010- 6.04c
2011- 9.08c
2012- 4.84c
2013- 8.19c
2014 forecast- 11.46c
Average EPS growth- 26.38%
Or if I ignore 2010/2011- 54.57%


I must have done something wrong? EPS doesn't seem to be a relevant way of finding a value for MRP. Neither does Dividend yield. 26 is also a bloody high PE.