Forum Archive Index - February 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

MacDunk wrote:

"PWC is a company I'm doing some homework on at the
moment has been on a long down trend for ages cant go much lower
prospects look good If they consolidate and stick to the
knitting.   The gas might be a worry but that's down the track a
bit.  Any one any info on that I need a second opinion."


I don't follow this one closely MacDunk, but PWC had a big rights 
issue to buy up some of those United Network out of Auckland assets 
didn't they?  Or was it NGC assets?   Or was it both?

PWC is a network operator, rather than an energy seller, so may be 
liable to future government regulation on what they can charge for 
line rental.  I guess the big question with them is:
 
"Where is the growth going to come from?" 

I know that Warren has bought into gas pipeline networks in the past. 
A power network is a kind of natural monopoly.  But of course Warren 
bought in when the owner of the pipes was desperate to sell and so 
bought at a good price.  The question is what sort of price did PWC 
pay for their new assets in relation to the earnings they can 
reasonably expect from them?   Answer that question and you will be a 
long way towards determining whether PWC is a good investment at 
today's prices or not.

If anyone else can add some light to the prospects of Powerco, please 
feel free to do so.

SNOOPY



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