National Grid Share Discussion Threads

[pierre oreilly] 10/6/2013 09:16

In in my view, your last sentence indicates a lack of appreciation of how this company is different from most others, where your view may apply.

NG. is central to our energy supply, and is a critical component of the Uk's well being, even to the extent of being central to our defence. Hence why it is government controlled (as it always has been, formerly as the intelligent central part of the cegb, and even after it's privatisation) while at the same time being non-nationalised. The governemnt, via the regulator, gives ngc a return on investment to keep it viable and it's functions active. It wouldn't let debt - or anything else - be a threat to its survival or even it's allowable investor return to any great extent.

The risk here is, imo, not as you indicate, but almost purely on the whim of the regulator/government who effectively decide the level of its returns. (for example, if interest rates rose and NG had large debt linked to it, then the regulator would allow an extra uplift to cover the extra interest, in my opinion). But don't expect to find an rns with that stated.

[darias] 09/6/2013 14:08

It was not ordered by the regulator to spend "billions on infrastructure"

"The Board believes that raising £3.2 billion through the Rights Issue will give it the scope and appropriate financial flexibility to deliver the Group's strategy. In particular, the Board believes it will allow the Group to fund a significant increase in capital investment and continue to deliver attractive
returns to shareholders, whilst maintaining single A credit ratings for National Grid's UK operating companies in a more volatile economic environment. The B oard also believes that raising equity today will strengthen the Company's long-term competitive position to take advantage of an appropriate
share of UK growth opportunities."

So there is the admission that the rights issue was to "deliver attractive returns to shareholders" in other words give us your money and we will maintain our attractive dividend.

As for the buy backs where is the evidence that this supported the share price. Between 2006 and 2008 when buy backs were taking place the share price went from £6 to £7:10 from the beginning of 2008 when most share buy backs took place the price fell from £8:60 to £7:10 with a low of £6:40 so all you can say is that the share buy backs would have prevented the stock falling further.

As far as regulation is concerned much of the capital investment was in America and not regulated by our government.

As for net debt compare it to Centrica where net debt is 73% (according to ADVFN) BG. another privatised company net debt is only 50%(according to ADVFN) and they have discovered gas/oil of the south american coast.

Debt puts a company in the hands of the financiers with constant vigilance required with regard to interest rates.

[pierre oreilly] 09/6/2013 12:48

I don't really understand what points you are trying to make. Is it that they have had both share buybacks and rights issues? Like thousands of other companies. The timing and scale are completely different - buybacks when the company has spare cash to support the share price, and rights (on a scale orders of magnitude larger) when it is ordered by the regulator to spend billions on infrastructure.

What's the debt to asset ratio of similar companies? Is 80% unusual? The income stream is guaranteed for ng. , simply a markup on the electricity as it is passed from generator to supplier. No risk there, no bad debt, just a guaranteed and predictable cash income. The markup is arranged by the regulator as a return on assets, so the more billions ng spends on infrastructure, the more income is guaranteed.

As for acting like a nationalised company - well it is, in all but name. It really has little freedom to do anything at all without the government, via the regulator, giving the go ahead, and you might as well view the regulator as the MD who formulates almost everything it does.

Fair enough if you don't like this company, and fair enough if you are shorting it. But I really don't think you are talking much sense.

[darias] 09/6/2013 12:05

I suppose it could be compared to a Ponzi scheme however with the Ponzi scheme that organisation did not generate income. National Grid does generate income but do not seem to pay off debt. Debt represents, according to ADVFN, over 80% of their assets.

[mroalan] 09/6/2013 11:57

Cheers,so its a ponzi scheme,more debt than assets?

[darias] 09/6/2013 11:41

The company shares are owned by the major insurance companies and trust funds and they just keep taking the money and fees on buy backs and rights issues.

[darias] 09/6/2013 11:40

Following reports the rights issue note 2 for 5.

hxxp://www.nationalgrid.com/NR/rdonlyres/17606A5B-3621-4968-A7D3-3DE7D97B7C6F/41271/Otago135cStatementFINAL.pdf


Following was the last buy back of shares in September 2008

hxxp://otp.investis.com/clients/uk/national_grid/rns/regulatory-story.aspx?cid=374&newsid=74611


Which had been going on since 2006 with money borrowed

hxxp://otp.investis.com/clients/uk/national_grid/rns/regulatory-story.aspx?cid=374&newsid=73939

It is my view that the company plays with money rather than develop a real strategy. More than any other privatised company this behaves like a nationalised organisation with access to easy money and a captive market.

[mroalan] 09/6/2013 10:52

Darias 9 Jun'13 - 10:31 - 2737 of 2737 0 0

"The dividend yield on this company has been paid by dilution after a period of share buy backs. The board need to answer a number of financial questions but the insurance companies do not want to rock the boat."
Darias, could you explain please?

[darias] 09/6/2013 10:31

The dividend yield on this company has been paid by dilution after a period of share buy backs. The board need to answer a number of financial questions but the insurance companies do not want to rock the boat.

[eeza] 07/6/2013 12:25

Daily Moving Average.
See Chart above.
50MA=50 day moving average - etc

[zeppo] 07/6/2013 12:15

100 MA? 200MA?

Help please?


z

[eeza] 07/6/2013 09:08

Looks like it will drop to the 200MA.

[pal44] 07/6/2013 08:58

agree share price moves after falling thro 100 MA..

[gbb483] 06/6/2013 12:56

Maybe its got further to drop.

[spacecake] 06/6/2013 11:56

Not much interest here.. would have thought the price correction would have brought in the bargain hunters... if its a bargain!

[gbb483] 05/6/2013 18:57

We are shortly going to be quantitatively easing into a share price collapse across the board.

[lord gnome] 05/6/2013 18:45

That chart reminds me of the old saying. 'The bull climbs the stairs while the bear jumps out of the window'. Sooner or later we will hit the deck.

[careful] 05/6/2013 17:52

all this b/s over dividend yield.
it takes 12 months to get a couple of dividends.
the share price is marked down by the exact amount on ex divi day so it makes no difference at all.

and the share prices can fall by 20% in weeks.
and the divi can be reduced anyway.

[careful] 05/6/2013 17:49

the regulator will never allow such fat dividends at the next review.
out of line with interest rates.

it is just a matter of when to jump ship.
it has already started.

[hjs] 05/6/2013 17:31

Newbank, Losos - spot on. Everybody is looking for the "easy route" which causes no/less hassle.

I notice that the share price has come down almost 100p in a short period of time (today the ex div amounts to 26.36p). There was some talk in the press of a dividend cut.

Did anyone read that?

[spacecake] 05/6/2013 17:19

National Grid Stock Getting Very Oversold... Forbes

Morgan Stanley Reiterates "Overweight" Rating for National Grid plc (NG.)

Sharecast...
1158: Footsie continues to trade near its lows of the day and to threaten with losing its 50 day moving average, although allowance must be made for a sufficient 'filtre' and any signals have to be on the basis of end of day prices.
Some market commentary is attributing today's fall in the share price of National Grid to infrastructure issues, as a key power cable is forced to operate at 50 per cent capacity for the next 2 weeks as essential maintenance work is carried out. Matt Basi at CMC Markets UK, however, pointed out to Sharecast that this report is 'dated.' In that regard, he believes that excluding the impact of having gone 'ex-dividend' National Grid is only down by about 1.5 per cent, in-line with the broader market.

[eeza] 05/6/2013 15:59

200MA @ 728p - looks likely now.

[pierre oreilly] 05/6/2013 13:17

newbank, losos, I'd agree with all of that. Another factor is qe becoming scarcer, hitting gilt prices increasing their effective yeild which has a knock on to high yeilders, as the differential is less. More thsn the usual number of factors at work atm. Regarding any possible tax increase, I think that will be accounted for when the regulatior next fixes ngc's return, allowing for extra uplift to cover the extra tax. (i.e. the extra tax will effectively be passed onto consumers to maintain ngc's return on assest).

[losos] 05/6/2013 12:40

Newbank - "and NG appear to be an easy touch."

You know what - I am getting increasingly annoyed at all the people and organisations that just take 'the easy way out' rather than sitting down and reworking the taxation laws so that American multi-nationals do legally have to pay tax in UK they just go after the soft targets. You see it in so many aspects of life these days, doctors who sign sicknotes 'cos it's easier than telling a patient he is fit to work, judges who hand down pathetically short sentances 'cos it's easier than risking all kinds of media attention, the media themselves who fly out to Turkey and report a revolution before it's happened (But of course all those lazy reporters want a revolution in Turkey, it won't half look good on their C.V.) and don't get me started on all the mortgage applications (up to 2008) which ought to have been rejected but it was easier to approve them and pick up a bonus along the way grrrrrrrr Has anyone ever heard of ONE SINGLE prosecution by a bank for a fraudelent mortgage application, there must have been tens of thousands up to 2008.

Oh well that's my 'rant of the day' feel better now lol

[eeza] 05/6/2013 09:40

Sitting on 50MA trend line now.