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I bought in at 1460p then it dropped again but caught support at 1405p and today is hitting 1480p.
Historically anything sub 1500p is a bargain for long term holders. Dividend isn't bad at 5-6%.
Goldman Sachs announced target of 2048p as a buy and even it it only hits 80% of that it will be around 1640p.
In my opinion definitely a long term strategy to get most value out of this one with its dividends, but that's okay because I'm 23 and can afford time.
Mr M, yes I think so! This was my reasoning on 18th August (not re-posting it for any other reason that this is why I think the share price is under greater pressure than most). As I don't have the cash right now to buy back in, I am not enjoying the rapid fall.
"I've sold my minor holding here at 1831p today. I've pocketed a nice profit of about 75% over 2.5 years (incl dividends) having bought in at 1208p. I've long had the feeling that I am better at judging when to buy utilities than sell them, but there are a few current/future issues for SSE that make me think I might be better to pocket my profit and step away:
(i) With the energy price crisis there will be persistent calls for windfall taxes.
(ii) Following on from the above, the threat of nationalisation will linger. It will never happen, but even a whiff can dent the share price.
(iii) Ofgem is going to come under enormous pressure to make future pricing favourable to customers.
(iv) Rising interest rates will make financing the massive investments required more expensive (I haven't done any research or calculations about this, just a general feeling).
(v) There is a clear and coordinated attack from the right-wing of politics against green energy. If the Tories remain in power I see them conceding at least some ground in that department which will hit SSE's windfarms I presume.
(vi) On the financials, it is now trading at a P/E of 15 which is high-ish for a utility.
(vii) The dividend is due to rebase to around 60p in 2024 and then progressively rise (perhaps 5% p.a.). That would put SSE on a 3.3% yield which is way too low for a utility in my view (even if it is then covered x2 and will increase progressively). I think there will be a few shareholders waking up to that over the next year. I would want at least 5% yield from a utility so at 60p that would put the share price at around £12!"
Guitarsolo
lul, when the Government decides to stop fcking around and announces the windfall tax the sp will bounce
Are we really going to test 12’s / 13’s?
Can anyone shed any light on the reasoning?
Thanks
Lower Buy Back prices at least. It's shocking that Govt does a U-turn on WT after they said they wouldn't back in May/June. Realise a different team but same Party. Hope SSE and others materially cut their RE Capex to reflect the WT, that'll teach the Tories..!!
Thanks for article hostman. Well 'The government is committed to the UK reaching net zero carbon emissions by 2050.' is a load of rubbish because SSE specifically invests very large amounts in Renewable Energy Projects and any large tax will reduce that spending dramatically. It may also persuade the foreign owners of Scottish Power, EDF, etc...to move elsewhere though Europe is already Windfall taxing.
I'm sure you are aware, but on the front of the Financial Times today (8th October) there is an article hinting strongly that the government is minded to introduce a price cap for wholesale prices for renewable electricity generation.
I note the governments new growth plan and the importance of Growth as emphasised by Liz Truss
I also not the governments commitment to net zero by 2050.
Furthermore I note government's commitment to increasing energy security.
If the plan as outlined in the FT is anywhere near true it would go against both of the government strategic priorities above.
The plan indicates that there would not be any set off for investment ( unlike the windfall tax on oil companies previously announced by Rishi Sunak).
It seems to me that it is critical both for energy security , for environmental reasons, and to support growth , that investment in renewables is encouraged and incentivised by government.
The plans as outlined will have the opposite effect.
I would be very grateful if you would lobby government ministers to look at this again ( if reports are true) and set up any tax collecting structure on the generation companies that provides large incentives for massive investment in renewable infrastructure,
Another industry person briefed on the talks between ministers and the electricity generators said: “You’re disincentivising technologies you can build quickly to lower [energy] bills.”
The Department for Business, Energy and Industrial Strategy declined to comment on the plans.
The government’s efforts to persuade electricity generators to agree voluntarily to 15-year fixed-price contracts were complicated by how ministers wanted deals that can have an impact this winter, and most companies had already agreed to sell their expected production far in advance.
The government last month announced that UK households’ energy bills would be capped at an average of £2,500 per annum for the next two years.
UK looks to cap renewable electricity generator revenues
https://www.ft.com/content/5187f160-eecd-4d7f-b523-82f973bc68a7
The UK government is pressing ahead with plans to cap revenues that renewable electricity generators are making from sky-high wholesale power prices following Russia’s invasion of Ukraine.
Companies generating power from wind and solar fear the plans, similar to proposals already announced by the European Union, will effectively amount to a windfall tax on renewable energy.
The businesses involved in renewable power generation that could be affected include EDF Energy, RWE, ScottishPower and SSE.
The government had been hoping to persuade electricity generators to agree voluntarily to 15-year fixed-price contracts well below current wholesale rates for their output.
But talks with the companies have collapsed and government legislation, which could be unveiled as early as next week, will be used to underpin a revenue cap on the generators, said people familiar with the plans.
With UK households contending with soaring energy bills, the government indicated to generators at a private meeting last week that it would pursue a cap, said people briefed on the discussions.
People briefed on last week’s meeting said prices of about £50 to £60 per megawatt hour were mentioned as a starting point for the cap, well below current prices of about £490/MWh, although no final decisions have been taken.
Ministers have been alarmed at profits being made by some electricity generators that are still benefiting from a government subsidy scheme that dates back to 2002, when the renewable industry was in its infancy.
The government has been examining potential levels for the revenue cap using evidence such as wholesale prices prior to the energy crisis.
A “high percentage” or all of the revenues above the cap set by the government would be paid to the Treasury, added one of these people.
The EU has announced a similar cap as part of plans to raise €140bn in windfall taxes.
Electricity generators fear the UK government’s plans will be more damaging to the sector than a 25 per cent windfall tax imposed on oil and gas companies in May by the then chancellor Rishi Sunak.
His 25 per cent “energy profits levy” was accompanied by a new investment allowance that energy companies can use to offset their tax bills if they press ahead with projects to boost UK production of fossil fuels.
“The major issue is not that the government is doing a windfall tax in some shape or form,” said one industry person who attended last week’s meeting between the government and electricity generators.
This person objected to how oil and gas companies affected by the recent windfall tax benefited from an investment allowance, and accused the government of effectively endorsing fossil fuel investment over renewable technologies.
The government is committed to the UK reaching net zero carbon emissions by 2050.
Clued
You may be right, and like I said they could well go lower again. I don't think you made an error buying at 15.62, I just set myself a buy price, and for a change stuck to it. I've held SSE for quite a few years and see them as a good dividend stock with the dividend well covered. As a bonus I think they are cheap anywhere under £16 and a buy upto £18. The £18 is not based on value but at that price the dividend starts to become less appealing for me personally. Unlike many I like company share buy backs for a number of reasons.
Paul2566, I wonder was the drop today related to National Grid statement today that there may be 3 hr daily cuts to electricity if a shortage of gas emerges during Winter ? Heavier falls in SSE started around 2:25pm though just before US Open..... I topped up at 1562p but shd have waited !!
Its rare to get below my average so added another 116 at a pinch over £14.90.
It may well go lower but if I keep waiting for the bottom I would never buy. GLA
OWLS, reviewed today a Rating Email from Alliance containing many shares ( headed LONDON BROKER RATINGS: Berenberg cuts Anglo American and Gem Diamonds) : out of 81 share ratings, only 43 are Buys (strong buy, buy or outperform) = 53%, 14 are Sells (sell, underperform, underweight) = 17%, 24 are Hold or Neutral = 30%. So unless my sample is too small, don't know what source you used for your figures !!? Ratings do move share prices at least initially / short-term.
I'm topping up monthly on these with the recent weakness, decent dividend payment, good growth potential.
Fill your boots at these levels , bargain prices for SSE & CNA & ignore the idiots speculators, especially city boys. Conservative & Labour both are now same sides of the coin, need big business on side or they doomed !
Gavster-NBC, good call with selling and buying back lower, I've had some success doing so with other shares but also some disasters as not really of trader mentality, more long-term !! SSE I see doing v well medium and long term when its large projects are fully operating. Div could very well exceed the 60p originally stated, maybe an extra div due to higher profits ?
Clued, I learned a long time ago to ignore brokers recommendations.
80% of them are strong buy or buy. Only 3% are sell.
Today, I finally bought some of the holding back I sold (at 1800 plus) when blue sky was reached.
In 2023 the company has stated the dividend will be capped at 60p a year. This implies a much lower share value due to yield. (A share price of 1200 would see a 5% yield with 60p annual dividend (1500p at 4% yield of 60p)
However, this decision was made before inflation and energy rates rocketing. They've just reiterated this plan with the idea of large scale investment and hopefully debt repayment too. I am very anti buybacks as I see them as a way self-serving the directors as the issue themselves shares, and IMO there is absolutely no benefit to shareholders above a proper dividend distribution.
Could this decision be reversed in light of large profits and shareholder pressure ?
Or would other holders here prefer to hold out and see if the company can get a USA style growth share valuation, back upwards not based ion higher dividends ?
I'll hold for now, or may top slice take on a rise. We'll see.
OWLS, 6 brokerages/banks with sp assessments well above current levels, sorry about data skewed:
Date Broker Recommendation Old Target New Target Rating Type
16-Sep-22 Credit Suisse Neutral 1,750.00 1,750.00 Reiteration
09-Sep-22 Deutsche Buy 2,000.00 2,000.00 Reiteration
28-Jun-22 JP Morgan Cazenove Neutral - - Reiteration
28-Jun-22 Berenberg Bank Buy 2,200.00 2,200.00 Reiteration
27-May-22 Barclays Overweight 2,000.00 2,000.00 Reiteration
26-May-22 Deutsche Buy - 2,000.00 Reiteration
11-May-22 Morgan Stanley Overweight - - Reiteration
11-May-22 Berenberg Bank Buy 1,690.00 2,200.00 Upgrade
Why are they incompetent. Nobody knows what will happen to the share price.
A drop to these levels really shows me how incompetent those selling are. No-ones getting my shares anyway !! Strong HOLD !!
I certainly don't agree the Energy sector should be government owned, I STRONGLY believe that the Energy companies should be owned, operated by UK based companies and accountable to proper regulator. An agreed percentage of their profits should be used for training new recruits and increasing the skill pool across the industry and country. In addition the Energy companies should sponsor Universities for research and developments. At the moment they are foreign owned with NO interest in the above, their focus is profit !
The trouble with the energy sector is that it is full of middle men and and companies with all their costs and profits.
When I want to buy electricity there are 175 different companies I can buy from. What is the point. They don't actually supply the electicity, it all comes from the same source. Absolute nonsense and inefficiency.
Good Luck to Starmer. All state-owned businesses underperform privately owned ones except maybe energy cos in Russia, etc... Reasons such as extra trade union demands, state enterprise inefficiencies, corruption, etc.. !!