WPL buy, page-796

Solid week for WPL holding on to the previous weeks gains.

Here is my current thinking on the stock.

Pre-Covid it was trading in the low to mid 30’s with a high dividend yield and if it wasn’t for Covid it would still be doing largely the same. With the vaccine solution looking so positive now the stock should return to these levels in the next 12 to 18 months. We are then back in that January 2020 type environment where the short/medium term demand for oil and gas was certainly there but the support for renewables and the general negative attitude towards oil companies were putting a question mark over WPL as a long term investment.

Will WPL move into the renewables space in any meaningful way ?....ie and convince the investment community that they are transitioning towards being a futuristic cross mix energy company? Oil and gas will still be a big part of this mix for another 10 or 15 years however I think they need to be seen to be transitioning.

The company appears to be officially still listed as ‘Woodside Petroleum Ltd’ though I see ‘Woodside Energy’ references here and there ......perception is important so the company would do well to move away from all references to oil and gas (a bit like when Kentucky Fried Chicken became KFC as the world became more mindful of healthier eating and ‘fried’ became a word to steer clear of - hasn’t stopped my wife calling it ‘Dirty Bird’ though !)

So in the medium term I see a return to $30 on a high dividend yield (so still a strong buy at current prices) but then to be honest once this has happened unless I see WPL positioning itself for a future in the renewables space I will begin to weigh up whether I want to hold the stock .....because by then it would be looking fully priced with a question over its growth prospects .....at low $20’s it’s purely a financial decision at the moment and a bit of a dirty one at that but if it becomes a low growth (or worse - slowly declining) dividend stock it might be time to cash in the chips.

Anyway - that’s getting ahead a bit - right now it’s nice to see the stock price continuing its rally from $16.80 ......that’s up 29% now - well done to all those that held tight through the mindless sell off ....or even better those that topped up in the 17s and 18s.

......so for those that are still on the sidelines weighing up an investment in WPL.....

"Opportunities are like sunrises. If you wait too long, you miss them."

William Arthur Ward