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EPW

0.21%

$2.43 erm power limited

2016 Guidance Affirmed, page-59

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23/06/16

07:44

Post #: 18098666
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Originally posted by asparagii ↑

My opinion: EPW is still a good profitable company and won't go broke anytime soon. I have been buying more each day, averaging down my position. I think if you have a long term outlook, you'll do well buying at these prices (that's what I'm telling myself at any rate). All the big money is getting out, which is causing the rapid share price drop - assume things are too uncertain for them? As others have said, tax loss selling is probably also contributing? This allows the individual investor who can ignore the noise, to make good profits if you're patient. There is certainly some light at the end of the tunnel and management have outlined a plan for future growth. Time will tell if it works. They'll have to remain vigilant, but they've done a pretty good job so far IMO and it will take time for them to re-position themselves. Remember too that M in NEM stands for Market - so even if peak power prices are low at the moment, they won't always remain low. So the ERM peaker plants aren't suddenly worthless! It will take time for the correction though, so one needs to be patient.

They will surely trim the dividend at some point - makes no sense to maintain it at the current level. Frankly I don't want them to payout more than 50% of their profits via a divvy - they should stabilize the business first. This company has changed a lot over the last few years, so makes sense that the divvy policy is re-evaluated, to align with the new business. This will upset some shareholders, but no one with a long term investment perspective and ERM 's best interests in mind could argue that continuing to pay out more than 100% of profits, is sensible.

So @ $0.80 cents per share and assuming EPS is ~0.08cps for FY2016, EPW is only trading @ a forward P/E of 10. This is very cheap - esp. when compared to the current market.

Good luck to all.

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I am looking at this , the issue I think is not earnings fall , but rather what this means with their debt load

EPW Price at posting: 78.5¢ Sentiment: Hold Disclosure: Not Held
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2016 Guidance Affirmed, page-59

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