Insights for November 2015

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Posted by InvestorBob on 25 November 2015, 10:26 AM

Centrica PLC - A strong value play

Centrica PLC is a compelling BUY with an upside of up to 35% from the current levels. Currently, the company is trading 1.1% above its 52 W Low and 30% below its 52 W high. The company finished trading in the London stock exchange at £209.10 a share on Monday. However, at the current levels, it seems that the stock will start consolidating and offers a long-term opportunity for the investors. Centrica plc is an integrated energy company and has a market cap of £10.73 Billion. The Company operates through three segments namely International Downstream, International Upstream and Centrica Storage. Out of all the segments, the company generates 85% of its revenue from the international downstream segment.  This segment provides residential energy supply, residential services, and business energy supply and services in the United Kingdom, North America and the Republic of Ireland. The International Downstream segment consists of the operations of British Gas, Direct Energy and Board Gas Energy. 

However, 2014 has been a challenging year for Centrica PLC because of the extreme weather conditions in the UK and US, volatile commodity prices and the falling oil prices. Despite the roadblocks, Centrica PLC reported solid second quarter results. Though oil prices are still a matter of concern for centrica PLC, the company bounced back with the solid second quarter results, indicating towards decent 2015 results. Also, to strengthen its foothold in the challenging markets, the company is planning to pursue inorganic activities and plans to acquire Norwegian continental shelf as the company sees Norway as its main growth area for new production. (Read more)

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