Agree, cards on the table I have placed a sell order today for my full current holding, cutting my looses at what I think might be a peak. Will consider buying back in at a lower level at maybe $1.80ísh for a long term hold, perhaps.
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My rough back of the envelope NPV calculation had it sitting around 2.02 with 5% growth in revenue from 2018 . However NPV is not a really good way to value CNU as it will continue it make money for a long time after the 10 year period I used
Would have it sitting at around a PE ratio of 11 in 2015/16 .
With that as a base and upside from favorable FPP decision, more cost efficiency and/or faster fiber uptake.
PE ratio would drop significantly from then on.
Of course a bit of guess work is required to come up with these estimations but in 4 years on a PE ratio of 15 sitting around $3.30 a share. Would be annual compound growth of around 12% plus any dividends. PE of 15 seems quite reasonable considering it will eventually be priced as a utility
If an unfavorable FPP decision draft in December is to occur then in the short term will push the price down again and would provide a good buying opportunity. However at $2.08 it still seems a good investment with plenty of upside.
If we take a long term investment view of 15 years and a company with lower debt and full fiber network with an increasing population then the investment is even more attractive.
New Zealand's total population is projected to reach 5 million in the mid-2020s
I'm also sure when the old network is switched over in many years to come that all that copper can be stripped and sold for a quite a tidy sum .
Agreed - I would think that a CNU investment would be in the very long run (think decades) cash positive (as most utilities with monopoly status), though not with stellar returns (as most regulated monopolies). In the mid term it will be a playing ball for politicians and bureaucrats - and I don't dare to imagine what would happen with their SP if at some stage the Left takes over.
Again - in the long run you probably get your capital plus some interest back, but what's better about them than e.g. an investment into e.g. IFT (which still might have a bit of grunt in its SP) or any of the power generators (which are probably as well starting to plateau, but with less immediate risk of bureaucratic interference)?
The question is in my view just whether the current price is a good price to buy in. The returns look much nicer, if you buy the share at lower prices.
Discl: sold CNU and MRP, still holding IFT and MELCA. DYOR
Some good news stories for Chorus: Netflix is coming which will encourage people to migrate to fibre and the cost of future fibre installation is coming down.
https://pr.netflix.com/WebClient/get...do?newsId=1751 http://www.stuff.co.nz/business/indu...-installations
The big Com Com decision is just around the corner. If it goes badly for us poor old Chorus investors who only ever wanted a piece of a boring infrastructure company, please be gentle with us :)
Anyone want to make some guesses at the Draft FPP price on monday.
Positive comments by Amy Adams in Sunday Star times today...I wouldn't be surprised to see another upward surge in the SP going forward.