Member Info for tedmak

I saw the article below making the case that the share price is cheap. I have previously voiced scepticism on the BP 'strategy' but I think it is valid to class it as cheap to its peer.

Can anyone suggest a catalyst to narrow this gap as I am struggling to think of any.

https://www.ii.co.uk/analysis-commentary/bp-share-price-drop-attracts-bargain-hunters-ii532765?utm_source=newsletter&utm_medium=email&utm_campaign=Daily%20Newsletter%2020240905&utm_content=newsletter&utm_source=sfmc&utm_medium=email&utm_campaign=Daily+NewsletterAMP+-+Podcast+4th+Slot+Version&utm_id=201522&sfmc_id=9513132

Agreed - I included the dividened as the last closing price the day before the RI announcement was cum-dividend.

Divi is an integral part of investing in NG.

Just done the numbers and, assuming you took up your rights, you will be up on the value of your holding at close of business the day before the rights issue announcement.

I take it the weak longs have been flushed out and we can concentrate on the business' strategic prospects going forward.

On a macro sense - they are correct - but a share can be 'cheap' for years and just become a value trap.

They have to give a consistent reason to buy - and that requires them to be certain of who they are.

The 'strategy' has been all over the place. Either go the full transition route or go for the Exxon/Conoco model of get the stuff out of the ground as efficiently as possible. This halfway house is no good to anyone.

I think the basis for holding PHXX is the dividend yield with gradual but not massive, dividend increases over time.

In itself - it is a good basis for investing in any stock.

IT wont be a ten bagger, but gaining a return from yield is not to be sniffed at.,

Regardless of what you think of the wisdom of Net Zero, I find the zig-zag (I wont call it evolution) of BP's strategy not credible.

In 2020 we had Looney pushing to expand renewables whilst acknowledging the returns would be lower than on O&G. I don't agree with that approach. I think the O&G returns should be returned to shareholders and if they want to invest in renewables fine.

(There are other companies with a better track record of delivering renewable investments).

What I find strange is that the shift since is not due to the shareholders demanding different- it is due to the CEO professionally falling under a bus.

That is no basis to change the strategy.

BP are in a muddle and I don't understand what they are for.

The like of Iberdrola and Engie explain their renewable strategy. The like of Chevron explain their oil and gas rich approach. Either way you have a clear choice.

BP are in no-man's land.

I wish I was wrong as we could do with a British champion - but I don't think I am.

GG

the pricing control is such that NG does not directly make money out of an extra MWh of demand. You are correct that they make the money on rate of return and the amount they charge is based on that. If demand is higher than expected - they are deemed to over-recover and effectively return that in future years.

The increased demand, however, requires an upgrading of the infrastructure. Take offshore wind. Most of that is in the North of England and Scotland. The demand is skewed to the South of England so the grid needs re-infonrcing for the Norh-South flows. National Grid gets the return on those extra investments.

(As an aside - the subsea cables are because people dont want to see new pylons such they cant get planning permission. That is not NG's problem, really.)

So - going forward - if there is even more offshore wind than planned, it will benefit NG. But that is a decades matter, not a short term thing.

The return on equity is capped but the new investment increases the asset base that they can earn a return on..

The companyneeds to keep delivering on time and operating the infrastructure well and they are et fai.

I have just don't a calculation against that last trading price before the RI announcement (1127p) against the current value net of the amount we paid for the rights and the dividend to come.

We are down 9% from the value the day before the announcement.

All-in, that is not too bad and suggests confidence going forward.

I am still unhappy about the manner of the communication, but am very positive going forward.

It is mining - wall problems sometimes happen.

BP needs to pick a course and stick to it.

I actually prefer the clarity of Chevron who know we will still need O&G for 30 years, wand do get it out of the ground and then return the profits to shareholders.

BP has given the impression that it is effectively assumed of part of its business.

GGPLRY,

you are right. The issue was so discounted, the rights were going to be taken up regardless.

The placing of the remaining 250k shares has happened this morning, so I take it trading is now back to 'normal'

Ther are a allowed a rate of return on that investment. That return is factored into the charges the regulator allows them to make.

They have to invest in a number of sub-sea cables to facilitate all the offshore wind. The wind is in Scotland and the North to South flows are not compatible with the current grid and the public doesn't want new lines onland.

The investment is a fundemental part of the business model - whether it is £6B or £60B.

The technical selling (people who had to raise money by selling existing shares to finance their rights) has ended. We are in the post issue phase.

The price IS lower in real terms than before the announcement but higher than it was this time last weekn

Now we can concentrate on future business prospects.

Seriously - the Woodsmith mine is one of the reasons I have bought into AAL.

I dont see the point of the delay as the company can afford to fund it, but in a takeover defence situation even sacred cows get damaged.

They need to demonstrate real progress in the next 6 months so they can get back to pushing the long term business.

The copper prospects are excellent but they need to get rid of the diamond business. In some respects, it doesnt really fit into the business. It is a consumer business as much as a mining one.

The rights that are not taken up are automatically sold and the value of them is returned to the shareholders NOT the underwriters.

If the price is below the issue price, the rights are not exercised and the share not taken up are bought by the UW at the issue price. In that case, the UW would take a loss.

REGARDLESS - they get the £130M fees.

Why pay such a fee for such a deeply discounted issue is an issue for debate.

Precisely longtime

Thing is - the underwriting fee is because the underwriters (UW) have the headache of that possibility.

The RI price was at such a discount that was very little chance of happening. WE the shareholders have had the headache of if, and how, to fund it. National Grid falling by over a third in two weeks is not happening.

They get the under-writing fees (£130M).

They also have to buy any shares that are not taken up and will lose if the price at the closing date (12th?) is below 645p.

The are short a deep out of the money put option.

They will have been part of the selling as the price as fallen to mitigate the VERY SMALL chance of that happening,

Once we get past the closing date, the mechanical selling will go.

Meoryou

I agree with all of this. It is a good opportunity to buy if you have been looking for an entry point.

I have been doing some analysis and dont find any skeletons.

I do note, however, that they may a trading update on 18th April that implied nothing was on the horizon. The investor relations team should be sacked.

The time frame pressure has gone but they haven't walked away for good.

They have put a valuation on Anglo so can't see further falls from here.

We can just sit and wait