AGL - AGL Energy

[Ann]

...and a 6 monthly chart.

 

[Belli]

For about a nanosecond I thought you may be on to something until I glanced at the number of buy/sells per day compared with the overall volume for AGL that day. Take 25 November. Vanguard Buy 310, 7429, 6543. Sell 109. Not even a blip when the volume on that day for AGL was 4m+.

Nothing more than index rebalancing as index funds do.

 

[Ann]

For about a nanosecond I thought you may be on to something until I glanced at the number of buy/sells per day compared with the overall volume for AGL that day. Take 25 November. Vanguard Buy 310, 7429, 6543. Sell 109. Not even a blip when the volume on that day for AGL was 4m+.

Nothing more than index rebalancing as index funds do.

No, let's take the 30th November, forget Vanguard and the 25th we are talking BlackRock, and who knows who else on the day, they may not have had reportable holdings. The ASX report from BlackRock has two and a half pages of trading for the 30th November.

EDIT: They had about 126 trades for the 30th November

 

[Ann]

I have been watching large funds appearing to blackmail companies into submitting to CC activist pressure for many years. To me, this collapse of AGL is simply a company telling these blackmailers or should we call them greenmailers to "do your worst, mate". Well they certainly seemed to have done some damage since 2017.
Disclaimer: I have a very fine imagination and it all may be just a figment of course!

Here is an article back in May 2021 about Exxon Mobil Corp being greenmailed by CC activists.

"BlackRock and Vanguard declined to comment on their stance. Both have signed the Net Zero Asset Managers  Initiative, vowing to press portfolio companies to achieve net zero emissions by 2050 or sooner."

Climate activists urge BlackRock, Vanguard to vote against Exxon directors

Climate activists are prodding Exxon Mobil Corp's (XOM.N) top shareholders to vote against the reelection of two directors, a move that could boost a hedge fund's proxy fight to seat four candidates on the oil giant's board.

www.reuters.com

 

[sptrawler]

For AGL to remain a viable power generation, it has to somehow replace the assets it is closing down, with assets that pick up that customer base, the only advantages it has over new entrants to the space is they already have the income and infrastructure.
So the balancing act between closing down plant and at the same time installing clean replacement plant is tricky.
They don't have the gas for LNG plant, but that is a stop gap anyway, as it will be next cab off the rank, to be banned anyway.
Interesting times, a lot will depend on free cashflow, over the transition period.

IDNH

 

[Belli]

The ASX report from BlackRock has two and a half pages of trading for the 30th November.

Got the link?

IOZ has a turnover of 4.34% (across all the 203 companies) and AGL is ranked 100. IOZ has 1,470,394 shares (0.17% of the indexes assets.) And you reckon they is going to move mountains trading that number of shares where the volume may be half a mill on the day?

https://www.blackrock.com/au/individual/products/251852/fund/1478358644060.ajax?fileType=csv&fileName=IOZ_holdings&dataType=fund

 

[Ann]

Got the link?

Seriously?!

It is an ASX announcement!

AGL share price and company information for ASX:AGL

View today’s AGL share price, options, bonds, hybrids and warrants. View announcements, advanced pricing charts, trading status, fundamentals, dividend information, peer analysis and key company information.

www2.asx.com.au

Scroll down to announcements and link into "02/12/2021 10:50 am Ceasing to be a substantial holder"

 

[SyBoo]

Chart from ShortMan - Short position graph for AGL

 

[Belli]

It is an ASX announcement!

Ah, I see. Ta. Algorithmic momentum-based trading. No conscious human decision making involved in the actual trades.

 

[Ann]

Ah, I see. Ta. Algorithmic momentum-based trading. No conscious human decision making involved in the actual trades.

I should imagine so, I would doubt very much they would have a wee trainee fundie sitting there poking bid-offer all day! I also doubt all the other folk colluding....ahem, joining them to create a volume honey pot to suck in buyers, while they got out, would have their wee folk sitting going bid-offer all day long either. Dang lot of button pressing for near 60mil turnover!

 

[Ann]

Given that I have been laying into the fundies on this thread, I may as well keep it consistent even off track for AGL for just a minute.

I think this article in Bloomberg may explain why the fundies are effingoff. Finally, our government have told them to stop with their bllsht and push off.

"Trump-Era Curbs on Shareholder Activism Find Favor in Australia"
By Matthew Burgess


" Government to impose tougher rules on proxy advisory firms
The companies can have a big influence on investors’ votes"

Bloomberg - Are you a robot?

www.bloomberg.com

Now maybe we will see some action in our stockmarket!

 

[sptrawler]

For AGL to remain a viable power generation, it has to somehow replace the assets it is closing down, with assets that pick up that customer base, the only advantages it has over new entrants to the space is they already have the income and infrastructure.
So the balancing act between closing down plant and at the same time installing clean replacement plant is tricky.
They don't have the gas for LNG plant, but that is a stop gap anyway, as it will be next cab off the rank, to be banned anyway.
Interesting times, a lot will depend on free cashflow, over the transition period.

IDNH

This is what I was alluding to in the above, with regard AGL transitioning from coal to gas to H2 and may well be what Twiggy and AGL are thinking of, time will tell.
I do hold now.

https://www.ge.com/content/dam/gepower/global/en_US/documents/fuel-flexibility/GEA33861%20Power%20to%20Gas%20-%20Hydrogen%20for%20Power%20Generation.pdf

 

[Belli]

This is what I was alluding to in the above

It would appear the author works for GE. Here is a link on a similar subject by those who don't.

Hydrogen in Australian natural gas: occurrences, sources and resources

Natural or native molecular hydrogen (H2) can be a major component in natural gas, and yet its role in the global energy sector’s usage as a clean energy carrier is not normally considered. Here, we update the scarce reporting of hydrogen in Australian natural gas with new compositional and...

www.publish.csiro.au

 

[rederob]

Now on a bender, and my tip for 2022:

Then again, context and perspective tell a different story:

 

[sptrawler]

It would appear the author works for GE. Here is a link on a similar subject by those who don't.

Hydrogen in Australian natural gas: occurrences, sources and resources

Natural or native molecular hydrogen (H2) can be a major component in natural gas, and yet its role in the global energy sector’s usage as a clean energy carrier is not normally considered. Here, we update the scarce reporting of hydrogen in Australian natural gas with new compositional and...

www.publish.csiro.au

Yes I was more referring to the technical aspect of dual firing gas turbines, therefore referenced a gas turbine manufacturer, rather than a generic presentation.
This is because I would assume AGL will look at replacing the coal fired generation with gas/H2 gas turbines, as has happened at KPS in W.A.

 

[Belli]

Then again,

 

[Smurf1976]

AGL is one of my picks for the 2022 tipping competition.

My reasoning being that the share price is seriously beaten up despite the underlying industry remaining viable. So long as the company's management can regain focus then there are opportunities.

AGL's present generation portfolio is not fully but is largely protected from short term fluctuations in commodity prices thus giving financial upside from anything which affects competitors' costs and market pricing.

Not exposed to commodity prices: Coal in Victoria, wind, solar, hydro.

Exposed to commodity prices: Coal in NSW, gas everywhere although contracts provide short term protection in both cases.

On the downside, power stations by their very nature do come with physical risks of expensive incidents. Should a competitor have such an incident that potentially benefits AGL but obviously not if it's AGL which has the incident.

In short, it's a bet on improved management, commodity price risks raising market prices and indirectly benefiting AGL, and that if anyone has an incident then it happens to another company.

 

[Wedgy]

AGL is one of my picks for the 2022 tipping competition.

My reasoning being that the share price is seriously beaten up despite the underlying industry remaining viable. So long as the company's management can regain focus then there are opportunities.

AGL's present generation portfolio is not fully but is largely protected from short term fluctuations in commodity prices thus giving financial upside from anything which affects competitors' costs and market pricing.

Not exposed to commodity prices: Coal in Victoria, wind, solar, hydro.

Exposed to commodity prices: Coal in NSW, gas everywhere although contracts provide short term protection in both cases.

On the downside, power stations by their very nature do come with physical risks of expensive incidents. Should a competitor have such an incident that potentially benefits AGL but obviously not if it's AGL which has the incident.

In short, it's a bet on improved management, commodity price risks raising market prices and indirectly benefiting AGL, and that if anyone has an incident then it happens to another company.

One of my top 4 for 2022 to as well, agree that improved management is the key. Also that AGL has been well oversold and way below actual value, AGL still generates over 10 billion dollars in revenue each year, with sales of over $17 per share and a dividend yield of 7.8%. If and I believe they will, use free cash flow to invest in renewables, like green hydrogen, should do well in 2022 (or at least not drop any lower).

 

[Sean K]

@Smurf1976 and @Wedgy I think this could be a cunning pick for 2022. I'm yet to get my head fully around the fundamentals but my contrarian eyebrows raise when I see this chart. Looks like a turnaround from the Nov lows.

Trying to get my head around the separation into New AGL and PrimeCo. Not yet sure how that effects current owners or even if it's a good thing...

 

[DrBourse]

Be careful, AGL's IV is between $5.62 & $6.05 atm, so it is currently just a bit overpriced.