Greenko Share Discussion Threads

[bikwik] 12/6/2015 16:31

Just as an aside. For anyone who does look at charts. Take a look at the volatility line on any chart that maybe you are looking to trade and see where it is. It may get you in to say a buy trade just at the right time - i.e. just as its about to take off. Always a pain when after you buy it, it then proceeds to go sideways for the next week or two!

Also, when it has run up quite a lot, hopefully, a high volatility level will warn you that it will soon go into a non-trending mode, so time to take some profits for example.

[bikwik] 12/6/2015 16:19

Two key things really:

Selling pressure has all but dried up in the last four days and buyers are beginning to return, particularly today when most of the blue chip stocks are down.

The bottom line on the chart measures the volatility of GKO, ie basically showing when the price trends (can be either up or down) and when the price is not trending - when it is in a sideways range.

As you can see volatility has got back to the lower side of the range and therefore reflects the current non-trending state of the share price. Since April the volatility line has been nice and cyclical, and while you can't be sure it will continue this way, it would not be unreasonable to expect volatility start to rise very soon, likely next week, seeing as it appears to be on the verge of turning up.

Granted, it could trend down.....heaven forbid! However, we have quite a few clues, which I have already posted previously and the bullish volume action this week, that suggests it is going to be up.

It is probably better to not know anything about the fundamentals to cloud the technical state of the price market in GKO. However, of course sometimes it helps, particularly that the underlying business is doing rather well, its just the dilution issue which has seemingly provided the downside catalyst to the share price for many months now. However of course I think the market is beginning to realise that it may have overdone the dilution element rather a lot. Thus we have a potential upside catalyst.

Of course time will tell if I am right!

[bikwik] 12/6/2015 16:02

Noticed the overwhelming number of buyers today compared with sellers yet the price has not budged a great deal. Of course with footsie down 80 points that's pretty good.

Also I think things may start to get decidely better for GKO before not too long. I had a look at the latest chart, here it is:


free stock charts from uk.advfn.com

[nosnibord] 12/6/2015 14:05

There has been some seemingly good buying pressure today but the offer at 45 keeps getting refilled. Once that goes, there might be some action.

[seball] 12/6/2015 13:25

Just topped up at 45p not many share left at 45p IMO. Once stock at 45p has gone this will rise swiftly IMO. Good risk/reward at this level IMO

[seball] 12/6/2015 11:50

Agreed I think a deal will be done between the board, GIC and GEF. It is in all their interests for a higher share price. Operationally Greenko are performing very well with talk of payments to shareholders and main market listing. Drop has been over done here imo.

[hounddog10] 12/6/2015 11:02

Yup some of that buying is me. The dilution is alarming (and on current share price of epic proportions) but I am betting that there will be a deal because it is pointless the holders of the dilutive instruments diluting Mahesh and Anil out of sight as they are absolutely central to this business. I suppose a deal could be struck that incentivises management and screws existing shareholders completely but the Singapore guys are a reputable bunch and there are big UK institutional shareholders in this stock. Also Aloe has its stake and it was there right from the start and Vivek Tandon will not want to lose out after all the risk they took at the beginning. After this and esp if they go main market they need to get a proper FD. The dilutive instruments should have had much tighter backstops. Typical of an Indian company not to have one though.

[seball] 12/6/2015 09:42

Buying continues today. Just need a bit more volume, once 45p is broken then this will rise rapidly imo

[nosnibord] 11/6/2015 15:45

What's your target BIKWIK?

[seball] 09/6/2015 11:16

This is still oversold. Fundamentals are solid and on track to hit 1000 MW by July. sharp rebound on any positive news. Aim market sometimes gives us opportunities like this. Looking for a return of cash to shareholders September and possible main listing this year. Good luck

[bikwik] 09/6/2015 09:39

free stock charts from uk.advfn.com

[bikwik] 09/6/2015 09:39

Looks to me like an inverted head and shoulders base is forming and is possibly nearly complete. Maybe another couple of days. Courtesy of today's sellers we appear to be forming the right shoulder. Once over the neckline the price should start to motor.

Currently we have sceptics, just what one expects during the basing process. You need these to provide the down dips within the pattern. Logical really. However, of course the price is so overextended on the downside that once the upside trigger point is tripped (neckline)then buyers will start to increase noticeably.

[henryatkin] 09/6/2015 08:00

Hutch...thanks, I wasn't looking at the ENLARGED figure which makes quite a difference. Even fully diluted I still believe a figure of 70p - 100p is a very realistic valuation. However, I can't see many new investors buying in until there is more clarity so I'll wait & watch for a while. Good luck all.

[seball] 08/6/2015 20:25

He said the company is contemplating migrating from AIM to a mainstream exchange, such as the London Stock Exchange, as and when the company hits operational capacity of 1,000MW.
“AIM helped us as a growth company, but we became bigger for an AIM exchange,” Chalamalasetty said.

[seball] 08/6/2015 20:24

He said the company is contemplating migrating from AIM to a mainstream exchange, such as the London Stock Exchange, as and when the company hits operational capacity of 1,000MW.
“AIM helped us as a growth company, but we became bigger for an AIM exchange,” Chalamalasetty said.

[hutch_pod] 08/6/2015 15:54

Hi Henryatkin

My understanding is that at £1, GEF's would convert to 75m shares, and GIC (which is capped at 30% of the enlarged share capital) would get 99m shares.

HP

[henryatkin] 08/6/2015 15:32

Hutch...excuse me if I'm missing something, I'm new to this thread. From what I read new share holdings are capped below 30% of the company valuation so the limit for GIC that means they can only covert into 46m shares at todays s/p. GEF have a smaller stake so could convert their whole 14%. Thats an additional 46.6m new shares for GIG + 21.8m new shares for GEF, a total of 68.44m new shares giving a new total share in issue of 224.5m. That equates to approximately 30% dilution in EPS.

What I can't get my head around is the current forecasts for this year of £21m profit before tax as quoted on Sharescope & Sharelockholmes. If I divide that £21m by 156m shares I get 13.5p per share or if divided by 224m shares I get 9p per share yet the actual broker forecasts are for an EPS of 7.5p Either way it looks to me like the forecasts have priced in dilution which makes Investec's £1 like quite on the cards. Even looking on the pessimistic side @ 7.5p EPS, £1 share price still looks very good value.

Hope I haven't missed something obvious.

Edit. Its of no value to GIG to drive the share price down as they are already capped @ 30% so could not benefit from a lower s/p.

[seball] 08/6/2015 14:39

Looking for a return of some cash to share holders.

'The Company has operating assets of 715 MW and is well on track to reach the targeted 1,000 MW in 2015. This, together with our reduced borrowing cost and improved debt repayment profile, will provide free cash flow to contribute to future growth projects. However, the Board also recognises that this cash flow should contribute to improved returns to our shareholders in the coming years. As a result, when our half year results are announced in September 2015, and our major construction projects are essentially complete, we will give active consideration to the most appropriate routes to return cash to shareholders.'

[hutch_pod] 08/6/2015 13:44

I think there is now some clarity over the possible extent of the dilution albeit subject to the current share price / negotiated compromise price.

So based on today's share price as a possible worst case, you can actually work out an approximate 2016 EPS based on a pretty monumental dilution, which might give say 9c EPS. Or alternatively a modest compromise price at 75p might give say 11c EPS. Or, IC quote Investec's £1, which gives 12.3c.

From that base, EPS is then free to grow along with net income (ignoring of course future fund raisings / additional net income from new projects).

[dr_smith] 08/6/2015 12:53

I have bought big chunks of GKO in past and sold at proft around 1.65- 1.75 and think how lucky I was.
The value of company versus buy/sell volume dictated price, compunded with sister company agreements makes all hard to fathom.
Is the Singapore entity manipulating the market to enhance the merger in their favour?
If LIBOR etc can be manipulated, then so can GKO.
I believe the sharebase is mainly a few big entities, with us small PI's more marginal than typical.
There are too many answered quesions, so even a calculated risk cannot be calculated. Leave well alone in my view, if you can.
I am taking this as a lesson in how things can go pear shaped, despite treading ernestly, and relieved I sold when I did.

[seball] 08/6/2015 11:43

IC update

I published a detailed analysis of the issues facing Greenko (GKO: 44p), the Indian developer, owner and operator of clean energy projects, only three weeks ago but given the share price slide since then another update is warranted.

To recap, I initiated coverage on the shares when they were 138p ('Buy signal flashing green', 18 March 2013), the price subsequently hit a high of 190p and I then downgraded my advice to hold at 104p post the fiscal 2014 results announcement ('Small cap updates', 31 March 2015).

There has been no corporate newsflow since my last article (‘Break-out looms for mobile wonder’, 12 May 2015), but clearly some investors have bailed out, hence the share price drop from 70p to 44p in the past three weeks. This has resulted in Greenko now being valued at £68m, or almost £100m less than its equity shareholder funds, and reflects the potential for a dilutive share issue on the conversion (into ordinary shares) of the minority interests in Greenko Mauritius held by the Government of Singapore (GIC) (whose investment has a value of £140m), and Global Environment Emerging Markets (investment has a value of £75m).

I raised this specific issue in both my March and May articles, noting that GIC has the right to exchange its 17.38 per cent interest in Greenko Mauritius into Greenko ordinary shares anytime between 1 July 2015 and 30 June 2017. True, the number of shares that can be issued to GIC is capped to prevent it from owning more than 29.9 per cent of Greenko's enlarged ordinary share capital. But with Greenko’s share price now so depressed, then if GIC takes up its conversion rights next month then it will not only be issued with a chunk of new equity in Greenko, but will also end up owning a minority interest in Greenko Mauritius as well. The same applies to Global Environment Emerging Markets (GEF) which has the right to exchange its 14.09 per cent interest in Greenko Mauritius into Greenko ordinary shares anytime between 1 July 2015 and 30 June 2017.

Clearly, there needs to be discussions between GIC and GEF and the board of Greenko to resolve the conversion issue as a matter of urgency. It would be negligent for the board of directors not to protect the interests of their own shareholders. Furthermore, it makes sense for all parties to come to some sort of compromise agreement as soon as possible, and preferably before the first exercise date on 1 July 2015, in order to reverse the steep fall in Greenko’s share price which has so undermined investor confidence even though the business has been making strong progress operationally.

From a technical perspective, I would point out that Greenko’s share price is as oversold as it ever has been: the monthly RSI is below the level at the March 2009 bear market low, and the weekly and daily readings are in extreme oversold territory. At the intraday low of 40p yesterday, the price was also close to testing the support level at those March 2009 lows. From my lens at least, this technical set up is such that any positive news regarding a resolution to the conversion issue should lead to a very sharp bounce in Greenko’s share price given the massively oversold technical conditions. In the circumstances, my advice is to hold on.

[bluerunner] 08/6/2015 11:41

After last week, a bit of profit taking was not unexpected this morning.But the most conservative broker target from within the past month is 82p - almost double the current share price.