National Grid Share Discussion Threads

[mj19] 24/9/2017 21:24

Off gridEnergy network operator National Grid (LSE: NG) remains one of the steadiest income plays on the FTSE 100 and although I expect that to continue, its recent showing has been disappointing for fans of the stock like me. Although share price growth is secondary with a company like this one, the 10% drop over the past 12 months is still disappointing.Despite this, last financial year's performance figures were impressive, with profit before tax up 13% to £3.56bn and total EPS rising 16% to 73p. National Grid has also been making large cost savings while offloading its UK gas distribution to concentrate on faster growth prospects. However, markets appear to have lost faith in its growth potential, which is understandable given today's valuation of a toppy 16.6 times earnings.The utility giant remains a strong and stable business, one that offers a forecast yield of 4.8%, covered 1.4 times. However, 2017 EPS growth of 19% is forecast to trail away to 8% in 2018 then 4% in 2019. I would still hold National Grid in my portfolio, but I wouldn't rush to buy at today's price.

[mj19] 24/9/2017 21:17

Thanks I am holding at the moment but it does make me laugh how each week the brokers say different things also some days these broker views hit NG hard and other times the stock hardly moves.

[utyinv] 23/9/2017 10:52

MJ19,

Credit Suisse and Deutsche have their agenda!

As mentioned, IMO, things will change that may eventually catch the two brokers out.

Ask yourself what is their justification for the recommendation?

As Bonds fall, which will happen when the fed starts to off-load some of their QE securities etc. it is assumed that income from other types of Bonds will fall too. However, the UK Gov and the BBC always quote CPI inflation but what is relevant to Many pensions and income from Utilities is RPI which is currently running at 3.9%.

NG have reiterated to maintain a dividend policy based on a yield of RPI+

On top of this are the investments steered towards more profitable areas of the utility business which should, if carried out effectively, mitigate the ambitions of our Marxist Opposition.

I am also of the opinion that Suisse and Deutsche are politically motivated and in time BREXIT will come to an end, be a thing of the past much to the dismay of some Nationalists in Europe. Just like PPI which has plagued Banks profits will soon be over, with a deadline already set, any weakness in the Market should be seen as an opportunity. But please DYOR as I wouldn't wish to be misinterpreted in coercing investment.

For me, I am happy to take the 4.9% (at current prices versus the conservative return on NG dividends over the next year) and hope for some positive news on how the divestment into more profitable growth areas unfold.

[mj19] 23/9/2017 08:25

Deutsche Bank Reiterates National Grid PLC (LON:NG) As Sell; Has Price Target Of GBX 900.00; 4 Analysts Covering Embraer SA (ADR) (ERJ)September 14, 2017 - By Marguerite ChambersThe financial company have set price target of GBX 900.00 on National Grid PLC (LON:NG) shares. This is -6.45% from the last stock price. In an analyst note sent to investors and clients on Thursday morning, Deutsche Bank reiterated their Sell rating on shares of NG.

[bountyhunter] 21/9/2017 17:34

I'm thinking that's certainly a possibility UtyINV which is why I'm still holding, but watching that chart closely atm! :-)

[utyinv] 21/9/2017 16:56

Bounty,

I would expect the correlation to deviate from Guilts in the near future especially as growth and NG's policy for growth starts to deliver results. Also, as Guilts fall NG is still committed to 'at least' return RPI+ to shareholders.

All the markets will be looking to hear what TM says in her speech tomorrow in Firenze.

All IMO only :)

[bountyhunter] 21/9/2017 16:11

added SSE to the header gilt chart, not so correlated as NG.

[utyinv] 20/9/2017 20:11

NG not looking too good in the US after the Fed's decision.

Not looking good for the morning, I hope I am wrong.

[mj19] 18/9/2017 13:19

Holding strong 949... good support

[utyinv] 17/9/2017 13:13

Sept,

Like I intimated earlier there are policies in play that may come to fruition. I was talking to Dean Seavers (nice chap currently head of US business) a couple of months ago and said it makes more sense to invest in America if the political weather in the UK is anti NG investor and when the UK regulator believes NG should be a charity. I added it makes sense to invest where there is a level playing field and currently the US regulator is far more tuned in with investor v consumer balance. He smiled and confirmed in agreement adding there were policies in play to protect shareholder value!

However, this is my take and IMO! Unless the UK regulator, Gov and shadow Gov start to realise that delivering real shareholder value will benefit consumers and a stronger successful NG then more investment will be ploughed into areas like the US and interconnectors.

[septimus quaid] 17/9/2017 12:45

Yesterday's Times: NG's American business will be bigger than its British division by by the early 2020s...

Can't see Corbyn nationalising NG, there would be too big a row with US institutional investors who would come looking for his blood (and compensation).

Article continues: NG is forecasting growth rates of about 7% a year for US business compared with 4% in reg UK business.

[mani2013] 16/9/2017 22:28

DavR0s,

That's exactly correctly.

It is very much Psychological.

As humans we always want to be right (not just with investment decisions, but with generally most things in life). It is a survival mechanism. It's very hard to accept and admit defeat (and take a loss) when we are wrong. That's why so many traders fail.

Trading actually goes against the human psyche.

[davr0s] 16/9/2017 21:39

Hi mani, I can't see your message at all. In terms of the other post the hard truth that most investors can't come to terms with is investors are consistently rarely better than 50% of the time - even the very best, so the only way you can make money in the long term is you need to run your winners and cut your losers fast. So yes you can't legislate for a gap up in price or equally a gap down, but you just play probabilities and repeat. So I'm up to 85% cash earlier this week not because of choice but stuff like NG. was rolling over and no one knows where it will go from here

[mj19] 16/9/2017 10:04

We seem to have held off 949 for now

[utyinv] 15/9/2017 16:45

Bounty,

You are absolutely correct. However as you have stated NG shouldn't be too closely correlated to gilts if their strategy for growth in the US and interconnectors etc come to fruition.

On the plus side too if inflation does rise the current strategy of NG's dividend policy is to match or beat RPI. RPI is currently 3.9% and if that level continues expect divi's to exceed 45.99p (or 46p)per share. At times of uncertainty ie Brexit, NK, etc good secure income stock will be sought after. Why do you think Corbyn wants to get his hands on it? However, with an increasing investment in the US and Interconnectors (where they are joint owned between NG and foreign CO's) that ambition may be harder than MacDonnell thinks.

[bountyhunter] 15/9/2017 14:04

Easy to ditch the biggest losers (albeit I only had to identify them) when it's someone else's money but not so easy when it's your own money at stake. Emotions then take over and no one likes to admit that they got an investment decision wrong! ;-)
Re NG my main concern is that if interest rates do start to rise then .... (looking at the gilts chart in the header). There have been many false dawns re the turn in interest rates in the UK but based on what the BOE governor said yesterday it looks as though the tide is finally about to turn!? I know that logically the NG price shouldn't be so tightly correlated with gilts but in reality it does seem to be.

[utyinv] 15/9/2017 11:17

Bounty,

Interesting work and very similar logic. Risk analysis and risk management is intrinsic to the responsibilities of the Professional Engineer and Scientists too.

Not an easy job to do effectively, as you have to be objective in your philosophy and evaluate risk on probability and then the consequence of it happening. Once you calculate the overall risk as you mentioned, you act to remove or mitigate the biggest risks without emotion.
However saying that it is also worth noting that when doing the analysis you may not be in possession of all the facts which could be catastrophic if these were not factored in, ie, you can't account for something you didn't know or believe to be in the pipeline. Not an easy job to do :)

[bountyhunter] 15/9/2017 08:55

UtyINV >> Looks like we are all Physicists or Engineers or numerically minded
for my part I used to write risk management reports for a global investment bank - at times of crisis they listed all deals in descending order of loss and closed out the biggest losers

[utyinv] 15/9/2017 00:54

Mani re:post 5161,

Looks like we are all Physicists or Engineers or numerically minded; there is a common synergy at play.

Very interested in the debate and have analysed your strategy. You say that the outlook is looking towards a continuing downtrend. However, how would your statistical analysis correlate with say an announcement by National Grid which appeals to the markets and shoots the price up or a change in Gov policy that depending on its content can move the price either spiralling down or rocketing up?

Surely no matter how proficient the trending or the analysis of share price movement, it cannot cope with news that changes the trend (other than putting stops in place and minimising loses).

You are right emotion plays a big part in market movement that is why relative good news or poor news can create a fantastic deviation beyond expected trends.

IMO over the next few months NG may be in a position to update us with some interesting news. :)

[mani2013] 14/9/2017 21:01

DavR0s, My apologies. I was referring to my discussions with Pierre regarding the price behaviour and the randomness of the markets. Nice one selling yesterday ! Have sent you a private message regarding your scan routine.

[davr0s] 14/9/2017 19:54

Nothing philosophical - practically I sold yesterday. Infact sold 1/4 PF yesterday so not a forecast but not surprised by today's fall. Now 80% cash until conditions improve