I agree with noo, but I wouldnt call AGL a "green energy" stock :) But yes they have a defensive green strategy and the current largest green infrastructure. They are investing in the most established green products (wind, hydro etc) rather than going for the more risky options (they do have a 10% stake in TEY, but origin has invested more in GDY and look at all the problems they're having).
Why is the SP trending down? Green infrastructure is expensive and the government's 20% and CPRS coming in will potentially mean less profits...BUT I think what will happen in reality is that Origin and AGL will simply buck-pass down to the consumer level to keep existing margins. AGL's larger investment in green energy will be beneficial when CPRS comes in. Also the 2 desal VIC/SA deals announced recently are great long term government contracts which secures sales for their green infrastructure. With all this in mind, any share price weakness when CPRS is announced may be a good time to buy some stock.
To me the sell off of its overseas assets (chile and PNG) and focusing more on the Australian market is a more defensive move but may be worth it in the longer term. With the wiggle room they now have debt-wise they should do well out of NSW government assets going up for sale. Financial review had more about this in last week's paper, IIRC the analyst predicted that they might do a share issue to raise money for purchases.
Overall a good defensive stock if you just want to park money in it and not worry about it - can't go wrong with electricity and gas! Current share price is in line with a 10 year trend (if you adjust oillman's bottom trend line to pass along 04-06 bottom instead of 03-04 bottom).
AGK Price at posting:
$13.46 Sentiment: Hold Disclosure: Held
