Australia's largest stock trading and investment forum Australia's #1 stock forum

IFN

Click for more information

0.00%

93.0¢ infigen energy

IFN still a long term winner, page-2

First 2 Last

Share
Profile

Follow
Sewerat

305 Posts.

35

07/02/20

12:16

Post #: 42800539
Share

Originally posted by anticyclical ↑

Hi all

I thought i'd start this post by saying don't worry about whats happened today and simply stick to the plan

Brookfield are simply unsatisfied they got in a 65c and waited 2 years for no real return at 71c (4% pa) seeing a opportunity in the market and made a decision to buy something else..

The way any investor should look at a stock is to understand the stocks true current value and its projection in sales over say a 3 year period, after establishing this taking into consideration the stocks competitive advantages in the market along with its financial health.

IFN for that matter is creating a revenue of just shy of $250m and since 2015 has grown revenue on avg 17%!!!! per annum consistently!!!!

To add EBITDA growth from $91m in 2015 to $171m avg being % 17.6!!! so for my i bought this stock seeing this value at 47c and the stock was highly undervalued.

To add the current true value for IFN is $1.20 at a 10% return valuation and for a electricity company i think that is pretty reasonable being cinema businesses like village roadshow are selling for the same yields without any significant protection in the market place.

In other words I'd rather bet on electricity that consumer NEED than movies....

To add there are strong incentive that IFN is thriving on, helping the business to grow while it can and get to a stage where Income is Steadily consistent and even if subsidies are removed which they wont be for a long time, the business still can well and truly stand in its own right.

Another point which is the dark horse I don't believe the market is correctly factoring in is the gas plants the business has purchased and looking to do more of to FIRM prices for customers (this allows IFN to create electricity when the wind isnt blowing and avg the business sale price of its electricity HIGHER) . This allows IFN to in theory charge retail/wholesale prices to major players tied up in Pre purchase agreements rather than taking the spot price at the grid which at the moment is where IFN is gathering it returns from.

Remember IFN produces power for little running cost Free wind and its all paid for by revenue generate and government incentive.

Yes the company has $565M in debt however it can pay that back entirely should i choose to in about 4 years.... the debt is not a issue with 2.55 times interest rate cover.

My bet now and this will be kept on record is that this stock has will be above $1 this year somethime and within 3 years above $2 being a labour government will be in by then and will amplify the incentive's.

This stock got sold short today...see the opportunity

Warren Buffett quoted "It doesn't matter if your right or wrong because a 1000 people agree or disagree with you all that matters is that your facts and reasoning are right"

Btw he is one of the largest renewables generator in the US

Expand

I agree with all the above except that it's worth clarifying the 17.6% return pa is the basic uncompounded. It's 13.4% pa growth (as compound annual growth rate), ie. Rate of Return (pa) = [(Ending Value / Beginning Value) ^ (1 / # of Years)] – 1
Sorry for my pedantry.
Worth noting that the obvious major risk here is a major economic downturn that supresses power prices and also drives up debt dramatically. Thus the need to pay down debt now and hedge interest rates a bit.

IFN Price at posting: 70.0¢ Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

With financials holding the fort, materials must step up with some heavy lifting to stimulate stocks

Time for retail therapy buying in the shopping Scentre for hot stocks

End of FY is a time to juggle wins, losses and capital gains taxes

Eurozone-based companies find new ways to secure a regional lithium supply

SS1

Sun Silver submits US$60M Silver Paste Funding Application to US DoE

First 2 Last

Add IFN (ASX) to my watchlist