Meridian Shares

[Leftette]

Buying any? Yea or Nay?

[speights boy]

Yep, a few.
In no particular order.

1. Discount over institution price;
2. Excellent initial yield over 18 months due installment;
3. Reasonable yield after that;
4. Renewable energy;
5. Taking a punt Labour won't get in, and if it does the regulation threat will be softened a bit;
6. Shouldn't be selling, but as we are might as well do my bit to stop foreign ownership;
7. Price is competitive due to Mighty River effect;
8. Retail will be lightly scaled and institutions may be more heavily scaled creating demand.
9. No brokerage payable.
10. Not buying Genesis or AIR, so no more after this one.
11. What else to do....Had thought of upgrading the DB9, but my mechanic said I'd be mad, as it is a keeper.

As always: Not a recommendation, do your own DD.

[Maccachic]

Na - prob best to wait till after the release and get them cheaper anyway...

[speights boy]

There is every chance of that Mac.

Just be aware though, if buying on the secondary market, (prior to May 2015), you do not have the retail limit of 60 cents for the second installment.
Your second installment due then will be the institution price.

[Leftette]

One is merely a custodian to one's Aston, sb.

[Wayne]

yeah - same reasons as SB.
Gut says that they will avoid the MRP effect of dropping after. But gut can be wrong.

[flyernzl]

Long term I see demand for electricity continuing to drop as people get more energy-efficient appliances.
Also, I suspect that once the Government has unloaded its power sector investments it will no longer be willing to suffer public flak over high electricity prices and therefore move to de-protect that market.

Disclosure: I have a few thousand Vector shares that I have owned since the float, but have no intention of buying any more shares in anything.

[Glenn]

Well I got enticed back into the market. First time back in there for about 20 years apart from some play investing with a share club.
Pretty much the same reason as SB plus another major personal reason. I have almost run out of mortgages to drop surplus money into.
This is not the best of forums to say perhaps I have too much weighting in property investments.
I wonder what too much means.
The problem is like it has always been for all shares.
It is easy to buy but how do you know when to sell.

[JABlog]

Long term I see demand for electricity continuing to drop as people get more energy-efficient appliances.
Also, I suspect that once the Government has unloaded its power sector investments it will no longer be willing to suffer public flak over high electricity prices and therefore move to de-protect that market.

Disclosure: I have a few thousand Vector shares that I have owned since the float, but have no intention of buying any more shares in anything.

Demand has already showing as decreasing.

[speights boy]

So; not only does the Govt sell these off cheaply (almost doubled in price); but now they have heaps of money to give back to us shareholders.
Thanks John Key

Meridian earnings up, capital return possible

Meridian Energy, which generates about 30 per cent of the country's electricity, lifted first-half earnings 21 per cent as it widened margins and clamped down on costs, and has flagged capital returns for shareholders over the next five years, including a special dividend with today's report.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11403864

[Glenn]

As a shareholder of meridian I am happy. No more so than any other investment I have taken the risk with and it has worked. Too bad not all of my investments do as well.
It just shows the Government is not a good holder of such massive investments.
If they did the same with Housing NZ the service would be better, the cost to the customers (tenants) would be less, and the new shareholders would undoubtedly be very happy. Everyone is a winner as apposed to everyone at present being a loser.

[speights boy]

It just shows the Government is not a good holder of such massive investments.

I disagree.
If they hadn't sold, 100% of this capital return and special dividend would be going into State coffers.
Now, a lot of it is heading straight offshore to foreigners.

BTW, merdian has climbed to be about 6.5% of my portfolio now with this price rise, so I am not saying this out of sour grapes.

[Wayne]

I agree with SB - Meridian hasn't changed what they do now that they are partially privately owned.
With the Govts cost of capital being quite low the dividend more than covered that plus a good margin.
They would have been better off borrowing and keeping Meridian!
The sell off was ideologically driven

I also own the shares and have been happy with the performance but ...

[Glenn]

I agree with SB - Meridian hasn't changed what they do now that they are partially privately owned.

...

Got to disagree with you both. I used to work for the Government and was involved in spending squillions of their money. Despite spending all that money the service we delivered was terrible. Not that I was happy when they put me off.
Just looking at the cost of power delivered is not a good way to judge a company.
As for foreigners owning the shares. Would it be better if the foreigners lived in Auckland.

[Wayne]

Got to disagree with you both. I used to work for the Government and was involved in spending squillions of their money. Despite spending all that money the service we delivered was terrible. Not that I was happy when they put me off.
Just looking at the cost of power delivered is not a good way to judge a company.
As for foreigners owning the shares. Would it be better if the foreigners lived in Auckland.

When the Post Office became Telecom NZ (the final version) and privately owned they changed what they did and made more money (not to mention being a monopoly).
Meridian hasn't changed what they do.
The Govt always got lots of money in - more than enough to cover the cost of borrowing.

Shares owned overseas means the dividends go straight out - a drain on the balance of payments.
This is especially so since there was enough interest by NZ'ers to sell them all to NZ'ers.
Foreigners living in NZ at least pay to live here - eat, rates, power etc.