Good Energy (LON:GOOD) seems to be below book value.
Is this now an opportunity to buy given it has a decent Stock Ranking and has passed 2 long screens?
I think it’s quite a divisive stock.
It was formerly primarily a generator and it sold its generation assets about two years ago and became cash rich. This wasn’t popular with one of its biggest shareholders (Dale Vince, Ecotricity founder), who then tried a hostile takeover I believe (this was before my interest in the company.
It’s pivoted to facilitating its customers to sell their own 100% green power, and expanded into other parts of the green market- eg EV charging technology. It also bought one of its smaller competitors.
The bear case is it’s a small cap with ‘too many moving parts’. I’m not sure it has a ‘moat’ particularly, although it doesn’t have any truly direct rivals I think.
The bull case is that’s it’s pivoted away from the expensive element of energy generation (mating turbines etc) and moved itself into a more profitable environment of facilitating supply of 100% green energy. The next three years project growth, increased EPS etc and it has a ROCE of about 10.5%. It’s customers ‘drink the Kool Aid’ and bought the energy even when it was more expensive in the early parts of the Ukraine crisis.
I hold.
