nk1999
02 May 2017
Jefferies "Drax double-upgraded by JefferiesStockMarketWire | Tue, 2nd May 2017 - 15:36 Jefferies International has double-upgraded its investment rating on Drax (LON
RX) and moved straight to buy (from underperform) on the expectation of an 18.5p dividend.The broker said: "We believe Drax will announce a cash flow based dividend policy with a floor dividend of £75m or 18.5p/share at the June CMD."This dividend delivers a 6% yield and passes stress tests of -20% power prices and additional OCGT capex."We believe the current valuation places limited value on retail business Haven and the US assets, which have a book value of c.£280m."The price target for the stock was upped to 400p per share from 305p.Meanwhile, equity research analysts at Barclays Capital upgraded their recommendation to overweight (from equal weight), last week, believing the post-results stock weakness was unjustified.The bank pointed out that the shares have fallen 20% since the results in mid-February, which it said was based on little more than disappointment that it didn't 'immediately' announce a new higher dividend policy.Barclays said: "We understand Drax's consultation is a genuine attempt to balance priorities of growth capex and increased returns to shareholders."We thus see no justification for the scale of Drax's recent share price reversion, and upgrade to OW."Its price target was increased to 410p per share (from 400p).At 3:36pm: (LONRX) Drax Group PLC share price was -7.8p at 315.2p"
Punilux
02 May 2017
Re: Rise Thanks for taking the trouble to answer Mr/Ms Rabbit.I understand that there a relatively few shares in circulation but history has repeated itself again today. The price rose by 5% based on bargains concerning 0.1% of the shares in circulation. For this to happen I assume that the only shares being offered for sale were priced at a 5% premium to the share price and people needing to purchase bid accordingly. As a result of this more sellers came out of the woodwork and offered their total of 0.1% of the shares in circulation at a 5% discount to the price. Don't you think that it is statistical impossibility that almost every share used to fill orders could all follow the same radical changes in bid/offer simultaneously? Even when Amber was up to her tricks the price movement was tiny by comparison and there was a specific reason for change at a specific time - when the news was released to the market.
Happy Rabbit
02 May 2017
Re: Rise Hi Punilux, Yes there are only 407 million shares and Drax is quite a small FTSE250 company, and with Invesco holding 21%, Schroders 16% Woodford about 10% and Artemis 5%, that is over half of the shares effectively off the market. There will be other fund managers with large holdings (I only looked back through a few RNS notices for the above) so the number of shares available for trading is quite small. This is why Drax is an ideal candidate for short sellers!It only takes a hedge fund with a substantial short position to get squeezed for the price to rise very substantially. Very few big funds will sell into a price spike. Why would they?There is a very good case history on the "short squeeze" with, I believe, the Saab motor company, when more shares were shorted than the company had on issue. The short seller had unknowingly gone back to the very people he had sold (shorted) the shares to, to borrow more. When his time came to close, there were not enough shares in issue to close his position. Well worth a read.Regards,
Punilux
29 Apr 2017
Re: Barclays view The translation is:"Some major shareholders are unhappy about the levels of pay/bonuses when they think that dividends should rise. In future Drax will explain their reasoning to these potential troublemakers and avoid a PR disaster".
nk1999
29 Apr 2017
Barclays view Details from ADVFN:"Drax surged on Friday as Barclays upgraded the stock to 'overweight' from 'equalweight' and lifted the price target to 410p from 400p saying post-results weakness was unjustified.It noted the shares have dropped 20% since the mid-February results, underperforming the Stoxx Europe 600 utilities index by 24%, seemingly "on little more than disappointment that Drax didn't immediately announce a new higher dividend policy", but instead said it would consult with shareholders over 1H17."We understand Drax's consultation is a genuine attempt to balance priorities of growth capex and increased returns to shareholders. We thus see no justification for the scale of Drax's recent share price reversion, and upgrade," the bank said.In addition, Barclays argued that post-results regulatory changes and acquisitions are positives."
Punilux
28 Apr 2017
Re: Rise Mr/Ms Rabbit,You are clearly one of the sharper knives in the cutlery draw so perhaps you could enlighten me regarding your posting earlier today. There are 406 million Drax shares in "circulation". How, mathematically, can there be a 7.58% (and at one point over 10%) movement based on the sale/purchase of only 2.4 million shares? I understand people needing to fill orders and bids/offers being backed up but the pumping and dumping would involve maybe 2 or 3% of the total shares and has only altered the price by a few per cent.in the past. Statistically, it must be close to impossible that almost every potential seller was offering at a massive premium to the previous closing price.
Happy Rabbit
28 Apr 2017
Re: Rise Punilux,Blackrock have been pumping and dumping for quite a while now. I guess we will see even more volatility if others join in.Regards,
Punilux
28 Apr 2017
Re: Rise The story appears t be that Drax has been upgraded by Barclays , and that the rather excessive response is due to it being extensively hedged.
dwifuc
28 Apr 2017
Re: Rise [link]
Punilux
28 Apr 2017
Rise I've obviously missed something - Have we got a contract to burn terrorist's furniture?
MNKGV
24 Apr 2017
Re: First 24hrs without Coal since Ind. ... HR "It was us not burning coal........". Absolutely, what an 'Alice in Wonderland' world our masters live in. Maybe, just maybe, they are hoping the ITER Project will work. The way they are going ,it has to.
Happy Rabbit
24 Apr 2017
Re: First 24hrs without Coal since Ind. Rev ... At considerable cost, no doubt. Let us not forget that all of the imported power is classed as low carbon (although it isn't) so it was us not burning coal rather than a coal free day!Regards,
MNKGV
23 Apr 2017
First 24hrs without Coal since Ind. Rev ! Historic , but at what cost ? Certainly more than burning coal and turning the CO2 into calcium carbonate.
Punilux
15 Apr 2017
Re: Value of biomass Obviously I'm going to disagree - I think that Drax's business model is working relatively well at the moment because we live in a dishonest world. That isn't to say that Britain is running out of democratic friends to trade with rather quickly and burning more coal, thus breaking our treaty obligations, isn't going to increase our chances in a popularity contest. As for fracking, people who have done real research, such as the LSE, don't appear to be nearly as "optimistic" as the government. It couldn't possibly be a way of massaging future financial figures so as to imply that a target will be met for deficit reduction ?
MNKGV
15 Apr 2017
Re: Value of biomass Isn't this really arguing about 'how many angels on the end of a pin' stuff ?Common sense and 'engineering went out of the window as soon as the politicians discovered how to make money out of nothing ( carbon credits ) came along.Realism will soon return when the lights go out and Caudrilla start fracking for real in the National Parks. There's always coal as a last resort.
