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Bear in mind, that it will be a very long time before they reinstate the dividend, but they should use that cash saved very wisely and invest and grow the business or perhaps split the company and spin-off British Gas and make it more agile because the Government won't allow British GAs to make big profits and distribute big dividends as it has turned into a political football ow.
Contrary to what other people think, but I agree with Toff's comment to a certain degree. The divi cut was the nail in the coffin for the Fund Managers with income portfolio and they cannot sell their big holdings immediately but they tend to do it slowly to minimize losses. Having said that, I predict it will also fall on Monday but not by 10% and then the share will stabilize between 25-27.
I always trust statistics and I would like to sell immediately when a bad news is given to minimize my losses, but I'm assuming most private investors in here would initially hate to take a loss and thus wait longer with a hope of rebound to exit their position and come out with bigger loss. However, another approach could be taken if the share has good long term future then it would be prudent to dump it immediately and then buy back at a lower price. DYOR.
Dale
“bet toff buys back in when hes licked his wounds.”
No chance, I’m out and out for good, because I believe the shareprice will fall to pennies. Why would I buy back into a daily source of grief.
Down another ten percent today, right at the very top of the losers board yet again.
As I said before, I don’t know if the market is right but its pricing this company to fail.
My only regret is not closing my Centrica position long ago.
Toff
bet toff buys back in when hes licked his wounds.
Understood. I think two years ago I would have had a different onion and I can see your point after holding them for a while. I do think that COVID might be a blessing in disguise for Centrica in terms of: (i) management shake-up (CEO and Chairman are now gone) to allow new blood to come in and drive a business plan; (ii) forced rationalization and cost cutting including salaries and board fees; (iii) calibrating the business model to operate in a low energy price environment. In addition to these factors, the low commodity price environment and COVID impact provides a good long-term entry at the current price points.
I wouldn't have bought these shares if the current CEO and Chairman were still in place.
Doesn't come across like that Toff, comes across as High and Mighty, gliating and mocking, just my opinion might be brutal, but hey each to their own.
Mussy
Hope it works out for you.
I’d just like to get one thing straight.
What I believe is only my opinion formed over two years or more of holding this share.
My verdict may be brutal, but in no way is it meant as an attack on people who still hold it. I’m single minded, I speak my mind. I tell it like I believe it to be. So no one should take my views as a personal insult.
We’re all retail investors with the same objective - to make money, so there’s an element of solidarity between us. Posters read conflicting opinions, take stock of the information and make their own decisions. After over two years of incessant falls I’d be happy to see it go back up even though I no longer hold it.
Toff
I'm getting very tempted to add now, given my 89p(!) buy in price just before Xmas.
But I'm not seeing any sign of a bottom just yet and it's just a long continuous fall, where Toff does have a point.
I'm not so pessimistic though and totally agree that CNA is in a perfect storm, with commodities low and Covid, where it's approaching the bottom.
This will bottom at some stage and end up a superb buy in the medium term, let alone long term, as sentiment improves.
"Yer pays yer money then places yer bet - take no advice from anyone - make yer own decisions and if you guess wrong fess up like a man and take yer losses without complaining to others " Best advive to take when gambling on stocks and shares
Regards all - GL with you own betting - I am in now and expect to see a very big swing upwards after the CV bugs have all gone and life returns to normal.
Toff. I disagree with you that Centrica is overleveraged. The business operates in a sector with more predictable revenue streams spread over millions of customers. As a result, it can take on more long-term leverage especially for a capital intensive business. You can't compare Centrica to Carrilion as well; not the right way to look at the business . In fact, Centrica is operating at a lower leveraged compared to other comparables in the similiar sector, see below:
Gross Debt / Normalised EBITDA
Centrica 1
National Grid 6.6
SSE plc 4.3
Suez SA 5.3
Engie SA 3.8
Mussy
You make a good argument to buy. But Centrica is in a terminal decline - the market is pricing it to fail. Long before the virus came along it was in meltdown.
Admittedly you’ve got in at an all time low - but you’re betting against the market that the company won’t fail.
The debt is the big concern here - it now exceeds the market capital. And that’s a bad place to be. A cash call could be on the cards but at the current shareprice that would be a hard sell.
Insolvency is more likely than bankruptcy. Sure the company has assets. Those would be sold off to pay off creditors. And as usual shareholders would be left with FA.
It’s a broken business model IMO. The old argument about other similar companies folding and being last man standing doesn’t fly with me. The tide of technology often renders former prosperous companies worthless. The answer remains to be seen if Centrica will join them - it’s certainly heading that way.
Good luck anyway. It’s a brave bet.
Toff
Toff: I just bought some shares today and yesterday. My belief is that Centrica is undervalued. On a pre-money basis, with a net debt of £2.7bn and current equity value of £1.94bn, the enterprise value is £4.6bn. Taking a normalized EBITDA of £2bn would imply the business is trading at 2.32x EV / EBITDA. Factoring potential case of further drawdown on the RCF and usage of cash, the entry multiple is very low. I further get comfort that I am investing at the bottom of the cycle where the commodity oil / gas price is low compounded by the COVID issue. I get comfort that the business has plenty of liquidity, a market leader, strong brand with further long-term opportunities through rationalization of the business through new CEO / Chairman and a more streamlined organisation. Yes the dividend is axed but so are other companies including banks. If you are investing for the long-term this is a good entry price IMHO.
Toff - I would t be selling ANYTHING at the moment , regardless of my loss
UNLESS, I was pretty sure the company was going under - and I genuinely can’t see that happening here at all.
If you can’t stomach watching stuff going down I suggest that you, or anyone else for that matter deletes your brokers app from your phone or laptop and sit this out.
Alternatively, if you have any spare £££ u should be looking to buy. I am on my portfolio 24/7 and am also seeing shares capitulate, however I am only buying not selling. Things WILL eventually improve - as they always have. Good luck all
Mussy
“I am a long-term investor focused on facts :)”
What a pity you don’t focus on the only fact that matters - the shareprice.
All the news, the updates filters through to the shareprice - there’s a lesson for you.
And if you’ve held it for a long time your losses must be substantial. Mine were. But such a relief to be out and not having to watch it fall to ever new lows day in and day out. Death by a thousand cuts - the ultimate stock for masochists and those who enjoy losing money.
Good luck anyway.
Toff
Agreed - this is a long term value and turnaround play
Have a lot of shares here, now worth a fraction of what they cost. Down about 75% I reckon, however I don’t think now is the time to sell. Out of the other side of this - with a new Captain and with less competition due to smaller players going bust I can see some upside. But it’s a long road.
Can’t see this ever going bust tbh - far too many customers / penetration even now and the govt can ill afford losing a company that provides these services. The main part of the business is sound as well
I guess he is shorting and is a day trader. I am a long-term investor focused on facts :)
New
Quick to change my tune
True
But unfortunately not quick enough
A few months too late!
Good luck anyway
Toff
Toff,
Quick to change your tune .... wonder why ...lol
Recent quote from you the other week ... "Centrica is actually rated as a strong buy by 5 different brokers right now. Horrible sentiment surrounding it, but it’s a gamble that could pay off.."
Redial
“It's a viable business and well run and positioned to whether this storm.”
A glowing tribute to a company you’re not even invested in. Mind blowing audacity. This company was in meltdown before the coronavirus. Any chart or statistic will tell you it’s been in terminal decline for two years - and here’s you recommending people jump into this disaster - although you’re not in it yourself.
You ought to be ashamed of yourself.
Toff
Redial
“it's sad to see someone predicting a fraction of a penny to enable fear so you can buy cheaper. “
Buy in to this world of grief & pain! Good god. Are you kidding me?
I sold this morning at 34.5p
A loss of 75p in the £
I’d hate to be responsible for sucking others into this grievous investment tragedy.
It’s destined to go the same way as Carillion. But you’ve have given the same advice, and most likely did, when this dog was £1
Toff
Iain Conn received a 44% rise in his pay in 2018 to £2.4m. His pay rose from £1.7m in 2017 because he did not receive a bonus that year, while in 2016 he received £4m. That's what we shareholders voted for. Any chance that he'll feel he should give some back?
I took the div last year and got out at a losss(sp 98p). At the time I thought I might regret it.......time has shown I did the right thing
I got out of this share last year with a loss but if I had kept the share now I would sell immediately as the Fund Managers who invested for income will all run for the exit door and shorters can short this share without impunity where they don’t have to compensate share lenders for the dividend income.
Really sad to see a lot of ordinary people losing their capital and regular income. They probably invested in CNA due to the fact everyone needs Gas & Electric to survive and the high dividend yield, but it was a value trap with high debt and high pension liability. CNA probably knows that the government will bail them out if they got into trouble as it’s too big to fail.
Conn should take the blame for this first and then the Board of Directors and then the Big institutional shareholders for doing nothing for last 5-7 years and perhaps lending the shares to hedge funds to short it.