Jersey Electricity Share Price (JEL)

Given the long term dividend record, it's excellent value. I'm buying

Only to buy to hold when cheap and it ain’t cheap yet!

The 2020 annual report under the section ‘returns to shareholders specifically addressed this point and is worth a read. At that time management said they had limited opportunity to impact on the share price as the State of Jersey owned 62% of the company and the rest was in the hands of only 600 investors. I bought at that time as a safety share that would provide steady dividends and didn’t expect much price movement.

Very quiet board, but would appreciate others thoughts. I’ve been invested in JEL for circa 3 years. On pure valuation metrics, it’s appears one of the best shares that I have been able to identify and have steadily increased my holding to make it my largest position.

On many metrics the company appears very lowly priced. There appears a lot of hidden value with the equity on the balance sheet being 230m in contrast to the present market cap of 162m. Admittedly the latest results were disappointing. Reduced usage during the last period is hopefully just a blip due to the weather as set out in the RNS. Most of the electricity imported appears to be materially hedged (don’t know why they don’t specify the percentage) so increased prices to the consumer should to some extent mitigate the inflation risk they flag. The balance sheet looks incredibly strong with the net cash position. The fact that the company also acts as a monopoly on the island gives it a wonderful moat. The physical assets of property and infrastructure held by JEL should also do well in an inflationary environment (these are highly valued by the infrastructure trusts). It would appear other listed utilities have extremely high debt on their balance sheets and yet they trade at increased multiples. Would welcome others thoughts in case I’m missing something obvious!

French threatening to cut off the EDF supply if we stop them fishing. Who believes it!