APA - APA Group

[persistentone]

Re: APA - Australian Pipeline

Does anyone have any comments on Envestra (ENV), which APA owns a 30.6% interest in? The ENV chart looks like they have a serious liquidity problem.

The ENV cash flow statement to me suggests that they pay out dividends in excess of operating cash flows, and they take on debt to do it. They have a LOT of debt already so that is not a sustainable practice.

 

[So_Cynical]

Re: APA - Australian Pipeline

Does anyone have any comments on Envestra (ENV), which APA owns a 30.6% interest in? The ENV chart looks like they have a serious liquidity problem.

The ENV cash flow statement to me suggests that they pay out dividends in excess of operating cash flows, and they take on debt to do it. They have a LOT of debt already so that is not a sustainable practice.

I watch both but don't hold either...ENV as u suggest, has serious money issues, from memory they have quite a few tranches of debt to refinance over the next few years, however on the up side they have a great gas distribution network, i came to the conclusion a while back that APA will at some stage take over ENV as its business is a natural extension to APA;s core business...perhaps when ENV's balance sheet is a little healthier.

 

[awg]

Re: APA - Australian Pipeline

How large are APA's asset management fees?

Can anyone tell me if they are having any liquidity issues or refinancing problems, looking out for the next two years of debt coming due?

I considered this as a dividend stock recently, but it has gone ex-div now.

Probably dropped off most watchlists lately, technicals a bit weak

but with gas network consolidation possible

it would be good for some serious fundamental analysis to look at its financials

would be interesting to hear your thoughts on those, persistentone

 

[persistentone]

Re: APA - Australian Pipeline

I watch both but don't hold either...ENV as u suggest, has serious money issues, from memory they have quite a few tranches of debt to refinance over the next few years, however on the up side they have a great gas distribution network, i came to the conclusion a while back that APA will at some stage take over ENV as its business is a natural extension to APA;s core business...perhaps when ENV's balance sheet is a little healthier.

Why have you avoided APA?

ENV looks toxic to me because of both too much gearing and also because of bad management practices of overpaying the dividend. APA looks very solid to me so far.

 

[persistentone]

Re: APA - Australian Pipeline

I considered this as a dividend stock recently, but it has gone ex-div now.

Probably dropped off most watchlists lately, technicals a bit weak

but with gas network consolidation possible

it would be good for some serious fundamental analysis to look at its financials

would be interesting to hear your thoughts on those, persistentone

Do you realize that this is not a standard distribution that APA is paying? Some of the distribution is being classified as a "return of capital" and as such you do not pay tax on it, but simply adjust your cost basis on the stock. Assuming the other fundamentals check out, it looks like it would be the kind of stock you might hold for 15 years frankly, paying ever-increasing dividends highly tax-efficiently.

I haven't studied them in detail yet, but the management presentation impressed me. They are very very conscious about their gearing levels and how much they can push that given their ultra-stable revenues.

I don't like the cash flow because they are constantly borrowing and the capex seems to exceed the operating cash flow. But at least one place in their presentation they make the point that they have very low maintenance capex expenses. So most of what they are showing as capex must be growth capex. That makes it very hard to quickly understand the financials since you need to know what kinds of cash flows will those capex expenditures bring in when the building is done.

Does anyone know if ABN Amro covers this one? Any good analyst research out there?

 

[So_Cynical]

Re: APA - Australian Pipeline

Why have you avoided APA?

Haven't avoided it...sorry if i gave that impression, APA has been a very frustrating stock for me since i first tried to buy it (low ball) in March...ive lost count of the number of times ive had unfilled buy orders in for APA, every time it dips i miss out by 1 or 2 cents...or im fully invested.

Perhaps ill get aboard in the next down leg (next couple of weeks) before the breakout....cos if i miss the breakout ill be very annoyed.

 

[Tysonboss1]

Re: APA - Australian Pipeline

Do you realize that this is not a standard distribution that APA is paying? Some of the distribution is being classified as a "return of capital" and as such you do not pay tax on it, but simply adjust your cost basis on the stock. Assuming the other fundamentals check out, it looks like it would be the kind of stock you might hold for 15 years frankly, paying ever-increasing dividends highly tax-efficiently.

I haven't studied them in detail yet, but the management presentation impressed me. They are very very conscious about their gearing levels and how much they can push that given their ultra-stable revenues.

I don't like the cash flow because they are constantly borrowing and the capex seems to exceed the operating cash flow. But at least one place in their presentation they make the point that they have very low maintenance capex expenses. So most of what they are showing as capex must be growth capex. That makes it very hard to quickly understand the financials since you need to know what kinds of cash flows will those capex expenditures bring in when the building is done.

Does anyone know if ABN Amro covers this one? Any good analyst research out there?

I like APA, They have some fantastic assets that service australias biggest cities. They are a good set and forget type investment. At todays prices it's a dividend yield of more than 10%.

They are spending alot of money adding capacity on the moomba to sydney pipeline and other pipelines. Australia is set to have high growth in the usage of natural gas over the next 10 years due to several factors and APA is making investments that will allow them to transport this gas.

 

[persistentone]

Re: APA - Australian Pipeline

Haven't avoided it...sorry if i gave that impression, APA has been a very frustrating stock for me since i first tried to buy it (low ball) in March...ive lost count of the number of times ive had unfilled buy orders in for APA, every time it dips i miss out by 1 or 2 cents...or im fully invested.

Perhaps ill get aboard in the next down leg (next couple of weeks) before the breakout....cos if i miss the breakout ill be very annoyed.

Is there a specific time driven event for the next three months you are watching?

I guess they had a lot of debt in 2010 that needs to be reset? Has there been any progress on that?

 

[persistentone]

Re: APA - Australian Pipeline

A very small and poorly detailed graph of the 90 day BBSW can be found in the bottom left hand corner of this site:

https://www.termdeposit.com/

You will notice that the crash in BBSW rates from September through December 2008 seems to very closely match the movement of NFNG in this period. What is interesting to me is why NFNG started to recover in April from low 60s to low 70s.

The reaction of NFNG to the Sinochem announcements is clear.

 

[persistentone]

Re: APA - Australian Pipeline

A very small and poorly detailed graph of the 90 day BBSW can be found in the bottom left hand corner of this site:

https://www.termdeposit.com/

You will notice that the crash in BBSW rates from September through December 2008 seems to very closely match the movement of NFNG in this period. What is interesting to me is why NFNG started to recover in April from low 60s to low 70s.

The reaction of NFNG to the Sinochem announcements is clear.

I posted this to the wrong forum! Sorry about that.

If someone knows of a way to delete such posts let me know.

 

[Tysonboss1]

Re: APA - Australian Pipeline

Well It's been a good run up off late,

Apa seems to be stalling around $3.2, probally because at that price it is a dividend yield of 10%.

I hope they south for a while I was hoping to pick some more up a sub $3

 

[brianwh]

Re: APA - Australian Pipeline

Just wondered what people thought of the "2010 Security Purchase Plan" being offered to current securityholders. I am less than enthusiastic about a paltry offer of 2.5% discount on an unknown price with money up-front and no certainty of getting what you ask for. I am generally positive about the company although debt levels are high.

The money seems to be for growth projects so may not be dilutive for current shareholders.

Any thoughts?

 

[gerg]

Re: APA - Australian Pipeline

Just wondered what people thought of the "2010 Security Purchase Plan" being offered to current securityholders. I am less than enthusiastic about a paltry offer of 2.5% discount on an unknown price with money up-front and no certainty of getting what you ask for. I am generally positive about the company although debt levels are high.

The money seems to be for growth projects so may not be dilutive for current shareholders.

Any thoughts?

Hi
thinking of taking up my entitlement either $10K or 15K. However over the last 2 weeks the price has jumped to between $3.40 and 3.45 whereas before that its was hovering around the $3.20 level. As you highlight you don't exactly know the final price and thus the exact number of units you get.

The company is well regarded and always seems to pay their dividends.

However I am thinking there may be some downward drift over the next month or so which would make a buying opportunity close to $3.25 or so. This would be cheaper than the SPP I feel. Note this is just my feeling and could be totally wrong.

If you look at the chart trend line over the last year it does appear a bit high at present.

 

[Tysonboss1]

Re: APA - Australian Pipeline

Based on my analysis APA has a fair value of $4.16. it has had so strong gains recently and is currently trading at $4.02.

$4.16 is the tipping point where if you purchase this stock at levels higher than this then the likely return will be average at best heading towards poor or mediocre the higher you pay.

So I am guessing that the price should stall just short of $4.16.

 

[matty77]

Re: APA - Australian Pipeline

Based on my analysis APA has a fair value of $4.16. it has had so strong gains recently and is currently trading at $4.02.

$4.16 is the tipping point where if you purchase this stock at levels higher than this then the likely return will be average at best heading towards poor or mediocre the higher you pay.

So I am guessing that the price should stall just short of $4.16.

you seem to be pretty much correct on that one at the moment, I have added to my watch list.

Any thoughts on long term hold for this sort of stock? (I am not a short term buyer - no I dont hold)

 

[awg]

Re: APA - Australian Pipeline

Have been holding this stock as a high reliable dividend payer with good prospect of capital gain exceeding inflation.

I agree with Tyson about the price and value, has traded in a channel, and could be reliably traded imo.

The good thing is that they have pricing pretty much sewn up, and imo, it is almost certain that growth will occur in the market they supply.

Their debt and capex figures are a bit of a negative

 

[Tysonboss1]

Re: APA - Australian Pipeline

you seem to be pretty much correct on that one at the moment, I have added to my watch list.

Any thoughts on long term hold for this sort of stock? (I am not a short term buyer - no I dont hold)

this stock is a great longterm hold provided you don't overpay for it.

Why?

It pays a great dividend from free cashflow @ about 8% atcurrent prices.

the companies stated goal is increase these dividends by 5% per year, it's free cashflow pershare is over 50c and the dividend is 32c, so that extra 18c will be invested into further assets which will assure they can continue raising the dividend.

Their assets all have contracted income that takes inflation into account, and the regulated assets also have clauses to increase charges if interest rates rise.

Also Apart from the factors mentioned above, natural gas usage is going to grow significantly over time and the best way to transport the stuff is through the piplines controled by apa, so the organice growth in their businesses will be strong.

 

[Tysonboss1]

Re: APA - Australian Pipeline

Their debt and capex figures are a bit of a negative

maintaince capex is very low, most of the large capex is for increased expansion and further invesments which are generally contracted prior to construction.

The debt is not a big concern since it is maintained through contracted revenue, and comes from a good mix of sources and expire dates, and as I said they can raises prices with inflation, it's a pretty sweet deal where the profit they can make in percentage terms is always 2% above the interest rates.

 

[PinguPingu]

Re: APA - Australian Pipeline

I'm long on this via CFD's and have been allocated APA Group Nil-Paid rights...what on earth can I actually do with this?

 

[So_Cynical]

Re: APA - Australian Pipeline

I'm long on this via CFD's

Long in a gas pipeline company with the oil price in near complete collapse, like one thing has nothing to do with the other.