Will Government pay AGL to go Green??, page-46

I won’t discuss my purchase prices on my holding because they are unbelievable. But I do appreciate a value investment.
When you keep it simple an entry or top up of low $6’s with DRP would likely get you a cost base of $5.50 in 12 months. If this undergoes further sell offs, worst case could see low $5’s high $4’s (with probably a period without a divy 22/23) at which point a turn around would be quite likely and if a dividend returned at a more conservative FY $0.25 that’s still a healthy 5% return and if one could see a bigger yield potential within 5 years $0.6-$0.8 than think if your cost basis in this time dropped to sub $5 you’ve primed yourself for a 10%+ dividend.
Since we are talking QAN let’s discuss the strategy QAN went through to rule the roost and wipe out ANSETT. When aviation was bleeding, QAN did the unthinkable and put in super low cost airfares. The strategy cost them a lot but they knew they could sustain it, they also knew ANSETT couldn’t, they essentially wiped out the other players and they’ve been incredibly successful at keeping competition thin.
It appears there are 4 options AGL have available right now
1 - follow a conservative strategy and hope markets stabilise and return
2 - cry poor, not make any changes and hope the government can help
3 - put out 12 months of cost price energy plans and try to thin out competition. I’d totally support 0 dividends and even a CR to execute this strategy. AGL stated they are one of the lowest cost energy providers in Australia, they should use this to their advantage. Ultra low cost energy will dry out renewable competition and wipe out energy provider competition.
4 - diversify
AGL sort of seem like they are in option 1, 2 & 4. I’d say the market probably doesn’t like 4 & 2 so much, and that’s why the SP is probably hurting.
Ultra low cost plans to me seems a viable option, even if they only target it on customers without solar feed in, capture that market hard, and be happy to let solar feed in customers go to the competition, it doesn’t seem like there is much value in that market anyways. Maybe this is part of the new strategy with splitting the company, one branch targets non solar home with incredible low cost plans to turn away further solar interest and the other targets solar feed in customers with the most competitive rates on the market.
Some food for thought in this space, well I don’t feel as frustrated as I did the other day so this chat has been revitalising