I am no longer short but I think it is too early to go long as...

I am no longer short but I think it is too early to go long as risks still look weighed to downside. Some of the reasons to hold back are:

1. Most basic issue is that free cash per share is the clearest indicator of value for this stock and it is going backwards by about -4.5% in this half (after adjusting for timing issues in prior period). The dividend is based on free cash flow so if free cash goes backwards so might the dividend.
2. Volumes are being forced down over time due to various policies e.g. banning new connections in Victoria. As volumes decrease so will future revenue.
3. Debt could be an issue and credit metrics are weakening. APA has started to issue hybrid debt at an eye watering 9.3% (when converted to AUD). It seems like future debt issuance might include more hybrids and there is another $2bn or so to refinance in next 12 months so real risk of a jump in interest costs.
4. Quality of revenue has decreased. Contracts lengths are getting shorter which gives less visibility on revenue. The company has stopped disclosing average contract length remaining which is a red flag.
5. Expenses are increasing faster than revenues due to new hires for "increased capability" and higher technology spending. In 4 years revenue has grown close to 20% while EBITDA has only grown about 10%.
6. Maintenance capex has ballooned and is another drag on cash to shareholders and reducing free cash flow available to shareholders. The total of stay in business capex and "foundational capex" expected in FY24 is $350m ($200m+$150m). In FY22 this total was just $165m.
7. Company indicating that cash tax will be a headwind. There was a benefit in last few years from COVID era related accelerated write offs which lowered cash tax. With this ending the cash tax will increase and free cash for shareholders will decrease.