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ThoughtfulB

190 Posts.

17/11/17

13:25

Post #: 28892819
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Originally posted by anthony75 ↑

I believe that the lack of progress on the refinancing in addition to negative sentiment due to a lack of policy regarding energy in Australia is what is causing the share price to suffer. Perversely neither are bad for IFN.

Of course, current debt covenants require free cash flow to pay down existing debt. But as debt gets paid offf obviously the net equity value of the company increases. I am indifferent as to whether this money goes to me as a dividend or as an increase in the value of the company that I partly own. They've already structured a solution to finance development of new windfarms by ring-fencing this from exisitnig operations so current convenants haven't totally blocked expansion either (although it doesn't help). The main benefit from refinancing will be from lower interest rates which will be welcome when that day finally comes.

Furthermore, the lack of a bi-partisan policy for energy has made Australia a signficant sovereign risk in this sector resulting in a lack of investment in energy generation for many years now. Supply keeps coming off-line with old infrastructure retirement whilst demand increases with population growth. The result has been high electricity prices which is great for any producer and great for IFN.

I'm amazed that the share price has slackened so much despite such strong cashflows and a company that, despite having non-optimal debt is far from having and debt distress. The interest coverage ratio is huge and the P/E ratio is also amazing. As frustrating as this is now, I'll look back happily on these days when I have been able to accumulate to my already substantial holding in this cash cow company.

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Any idea what the PE is at these levels, and what impact future projects are likely to have?

IFN Price at posting: 67.0¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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Flyers Creek Approved, page-8

Top Stories

HotCopper Highlights: Your most watched stocks for Week 47, 2024

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Dale Gillham's weekly wrap: Sigma-Chemist Warehouse merger creates pharma powerhouse

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Scientific conference spotlights PYC's work on blindness disease treatment

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

Panic, paranoia, and gangland politics: HotCopper users react to Dubber's missing $26M

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

Sales growth pushes Lovisa's fortunes (and shares) upwards

Week 47 Wrap: HotCopper users' most watched; Brent lifts on Putin's scary letter; RFK dents CSL