AGL is cheap at this price, $7.14. It reached an unsustainable...

AGL is cheap at this price, $7.14.

It reached an unsustainable price of $28 because wholesale price of generated electricity went through the roof when Hazelwood PS shutdown. People expected Hazelwood to shutdown in stages, but instead it gave 3 months notice, and spot prices rose as companies scrambled to get supply. AGL had excess generating capacity and made excellent profits from the wholesale electricity price increases.

The $28 per share was an opportunity to take good profits.

Covid lockdowns reduced electricity demand and electricity prices hit rock bottom. AGL share price went close to $5 and it was a great buying opportunity.

Today's share price is still a good buy.

Liddell PS shuts down in 2 months time and electricity spot prices will rise. AGL will benefit, but not as great as before when Hazelwood closed because Liddell is owned by AGL, so AGL loses some of its excess generating capacity.

AGL is flagging better returns in the near term.

AGL has 3.6 million customers, some with dual accounts, eg gas and electricity. When privatisation started in the mid 1990's a customer was valued at $1400. That was a bit pricey, but that's what the new retail businesses were paying to attract new customers. Now AGL is valued at $4.8 billion market capitalisation plus debt over $2 billion. That's approximately $2000 per customer, not a great increase over 28 years.

There's definitely improvement opportunities in how business is run. However I see this as an opportunity to accumulate.