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I believe the important phrase is 'Provided there's a supply of deals to be done'. We have to trust BOD judgment that it will always act in S/H best interest, and not buy for the sake of buying. The %age of debt to the asset purchased is critical. Not all 'green' assets are good assets. I think the idiom , 'Cash is King' has survived for good reasons.
We are not too far apart in our thinking. GL.
I sympathise with this view, but equally cash is finite and this is a growing business. If you have $100m of spare cash, you can buy 1x $100m asset, or add $100m of debt at 50% leverage to buy 2x $100m assets - which will double the returns for a minimal interest cost. Or you could use the cash to repay existing debt and not buy a new asset at all? Why would you do that?
Provided there's a supply of deals to be done, carrying debt makes sense.
ghhgdd';
'Using cash to fund purchases is all vey well but is hugely limiting when there are so many opportunities available. Debt is a valuable corporate tool, ESPECIALLY when it's structured like this is. I'd be disappointed in any management team that didn't use debt to fund assets like these.'
GLO is a Company that purchases 'green energy' assets in the main.. What does it need cash for. Only for the payment of Divi's. What do you do with surplus cash after divi is paid. ? Repurchase shares? I have already made a case on a n board that it is better for S/H to pay divi and not repurchase shares, except in the case when the Company offers shares in lieu of cash, then repurchase those.
testpack3, you replied
Amortisation is the process of 'paying off' debt over a time period. It still has to be re-paid. I agree that funding asset purchase is best through debt rather than share based fund raise, but it is debt. I would like to see a more concerted effort in paying off debt, so at least, significant part of future purchases can utilise 'cash in hand'.
Fixed rate depends on the rate. Not good if it's old debt at 10% p.a.
Amortisation is repayment of debt on a fixed schedule, so it is being paid off, as it comes due. This debt is attached to each asset individually, and the parent co isn't liable for it, so it's very low risk to shareholders. In addition the term length for these loans matches the length of the PPAs, most of which have very predictable cashflows and I really don't understand why you'd want to pay that debt off early?
Using cash to fund purchases is all vey well but is hugely limiting when there are so many opportunities available. Debt is a valuable corporate tool, ESPECIALLY when it's structured like this is. I'd be disappointed in any management team that didn't use debt to fund assets like these.
ghhgdd, you replied
'I'm not sure why you think the debt needs to be reduced? It's mostly asset-backed lending that amortises, so there's no re-fi or contagion risk from the majority of it. Further, most of it is on a fixed rate, so there's no rate risk either!'
Amortisation is the process of 'paying off' debt over a time period. It still has to be re-paid. I agree that funding asset purchase is best through debt rather than share based fund raise, but it is debt. I would like to see a more concerted effort in paying off debt, so at least, significant part of future purchases can utilise 'cash in hand'.
Fixed rate depends on the rate. Not good if it's old debt at 10% p.a.
Like this share. Reviewed my portfolio this morning. Sold one share with no dividend and bought more of this with four dividends a year. Think it will be a good move
I'm not sure why you think the debt needs to be reduced? It's mostly asset-backed lending that amortises, so there's no re-fi or contagion risk from the majority of it. Further, most of it is on a fixed rate, so there's no rate risk either!
There's a huge pipeline and debt funding is a sensible approach.
Very happy with this share. Am going to increase my holding
Brasil is a drag on profit with the Exch rate of cRs7.5=£1. It's been over 8. It is trying to divest itself of this drag, but probably not easy in a Country devoted to Oil. On divi alone , sp should be N of £2.50. I would like to see more movement in an effort to decrease debt.
Extremely decent. Great pattern of sensible dividend growth. Happy to tuck this one away and just watch the dividends roll in.
Well that looks pretty decent to me. Markets might be a bit jittery this morning, however I for one would be disappointed if we don’t see a reasonably favourable reaction in SP here. But what do I know.
Strong hold for me. I’d add, but don’t have spare funds.
Decided to diversify my ISA portfolio and having read a very positive artiicle in the Investor Chronicle a few weeks ago made a small investment of 1009 shares. A 6% dividend paid in quarterly payments was a major influence. Now up to 64 dividend payment days.... and counting.
Debt only a problem here if you don’t understand it. (1) Cashflows are incredibly stable and predictable and (2) most debt is asset finance and not linked to the parent company.
Debt
Cant understand why this share is not doing better. Good profits and four dividends a year fully covered. Any thoughts ?
Q) So many shares have Buyers in excess of sellers, what does that indicate?
A) It´s a Bull Market.
So many shares have Buyers in excess of sellers, what does that indicate?
In fact even I was so surprised I've sat and changed my pension about tonight to hopefully fill in the coming days.
I did some calculations on current dividend and where it would be when I retire in 35 years assuming the current yield % is maintained even if price moves up etc. so rough calculations. However, if people sat and worked out how much a couple of grand starting off and then adding only a couple of grand every year could net them in the long haul then a lot more would just sit and let it build and never have to worry about chasing another thing again. but no one has patience anymore.
Just to add to Oracles comment that we are not a 'sexy' share. This is true, but not because the energy sector is unglamorous, but because GLO is highly unlikely to 10, 20 50 bag over the next few years. Most of the people on these boards look for 'get rich quick' penny shares. I hold a few, unashamedly.
The oil price rise is a conundrum considering the Biden Admin has it's green credentials, and publicly states there will be drive in the Good Ol US of A to reduce dependence on fossil fuels. I posted some time ago on , several years ( I have been a H2 supported for a long time, especially fuel cells), that with the advent of both BEV, FCEV, and more importantly FC use in LCV, HGV, Trains, Public Transport, Ships, and other free standing energy solutions, that there is likely to be a 40-50% reduction in oil consumption by 2030. It may be sooner. I believe the oli market is manipulated by producers, and more importantly, traders. The bubble will burst. There is a considerable lobby in the above 'good ol' '' of Republican Lawmakers, well paid by the 7 sisters. to keep fossil fuels very much on the agenda. It may take Biden 2 terms, and the scrapping of the Filibuster to fully achieve their goals. I'm politically slightly right of centre, but could no more vote for Trump, or any other republican hypocrite, than sing Yankee Doodle Dandy whilst standing on my head, juggling 2 Pilates spheres. Back to GLO. I have asked Alice at GLO if we can have the choice to receive the divi in $US, and her reply was it would be under consideration. Thecompany must also have taken a hit with it's Brasil ops. The Real has been devalued v $US by 40% in recent months. If I were a currency guru, I would not be trading shares. In light of the fact I have no idea where exch, rates of $US and £ sterling is going, I have reduced my exposure in GLO and will look to UKW, revenue in £ sterling, for a v decent divi with high sp appreciation prospects. I very much hope that in the near future, UKW will be using Vortex Bladeless wind turbines. This is a Private Spanish Company which mfrs a bladeless wind turbine. It is commonly called a 'dildo' for obvious reasons. The future is going to be v good for 'dildos' Good luck. AIMHO naturally.
energy companies aren't sexy like biotech or cannabis stocks.
As said though this is a very good, solid company to have in your portfolio and no reason why the business shouldn't continue to grow
Can't disagree with most of comments - under the radar steady company with good current and increasing yield.
All for green energy from investment and planet perspectives but the air does seem to have come out of the sustainable energy bubble somewhat...just doesn't seem to be as hot at than ion run up to US election. Just look at performance of oil majors and energy ytd - Chevron +33% from year end to maximum sp ytd.
The conundrum is that as Biden administration switches to green focus this makes traditional fossil fuels supply constrained and pushes up price....oil + $60.....this time last year it was negative for a day.
Hey ho...markets play their games happy to pick up more shares with yield and hold for higher sp.....
just continue to accumulate. With their exposure to green energy and commitment to reducing carbon emissions, I see them as a prime target for companies looking to gain exposure to renewables. Especially if the market fails to recognize the opportunity here.
on both counts. The divi in dollars would be a useful hedge I suppose. I find it unfathomable that a company that is growing its divi at 10% is so out of favour with investors. Must be Bitcoin mania hitting investor's brains. The results show business is progressing nicely and I am happy to bank the income until the SP corrects.