Can AGL turn the ship around?

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Question asked 18/12/2021

Can AGL turn the ship around?

Hi James and team, still enjoying the service very happy and thanks for your ( most rewarding) work. I have a question if I may, regarding AGL, I have been reading conflicting and naturally confusing analyses over the last month. It’s either a dead man walking, or a good dividend stock with a somewhat positive future….Could you shed some light for me please??( I haven’t touched it so far…) Cheers Paul,

Answer

Hi Paul,

MM bought AGL for our Active Income Portfolio late last month hence we firmly believe it’s finally offering some deep value under $6. At this stage, we view it as an asset play that will morph back into a dividend stock in the future. The assets they hold in our view are trading well below their value because earnings and thus dividends have been under pressure. They are looking to spin out their retail business to try to unlock this value which we think is a real positive, although as you rightly point out, analysts are still split on this.

Analysts / the market being split on something is not a bad thing, when one side is proved wrong, bigger moves can happen, we think on balance, that will be on the upside – I would even consider picking this as a “roughie” with a chance of surprising us all in 2022 in how far it can actually rally.

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AGL Energy (AGL)

LAST UPDATED 18/12/2021 07:19

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