Trade Idea – Engie

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The opportunity of opening a long position in Engie at 5y historic low price levels has been utilized on 10 November 2016. The purchase price of EUR 11.9 can be derived into a really significant dividend yield (~8%).

In line with its previously announced strategic targets the conglomerate will focus on the following main pillars in the future:

(1) activities with low CO2 emission (already made some steps to be a top global renewable generator)

(2) shifting the focus to contracted, regulated business; consequently limiting the exposure to the volatile commodity prices

(3) integrated customer solutions

These are really ambitious plans to provide a proper answer in connection with the collapsed comodity prices and to transform the 200y old energy group into a solid player of the new energy era. Majority of the analysts covering Engie’s business activites provided positive opinion on the future outlook of the company. Even in short-term we might realize some upside (taking into account the oversold measures and the high dividend yield).

Trade Idea – GDF Suez

In line with the messages of the previous post long position was established at EUR 16.35, mainly because the price was close to the lower support line and the ~30 RSI(14). With the stop loss limit of EUR 16.98 appr. 2.4% profit has already been secured during this 4-day period (subject to the risks of standard stop loss mechanisms). Now the share price is very close to the highlighted resistance level which might result in potential decrease in the price.

gdf2

souce: yahoo finance

Watchlist – GDF Suez

GDF’s share price oscillates in a downward sloping range where the bottom line has not been reached yet. Waiting for potential entry point.

 gdf_chartsouce: yahoo finance

Key investment considerations:

  • The announced dividend policy offers a relatively high EUR dividend yield compared to other utilities in the continent. The EUR 1 per share minimum payout results in more than 5% dividend yield per annum based on actual share prices.
  • Mostly buy and hold recommendations from fundamental point of view (source).
  • Depressed energy prices in Europe.