July 20, 2024

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You insult us

You insult us

By Apostolos Manthos

What happened in the last few weeks in TERNA Energy (TENERG) stocks is now so obvious that it’s starting to insult our intelligence. Some “those in the know” who may have on hand the outflows from removing the stock from MSCI Standard Greece and converting it to MSCI Greece Small Cap since the end of last June have been immersed in incredible bearish speculation, sending the stock price down to -25.5% from high Levels recorded on June 20 at €21.34. Some other market “makers” reported that more than 3 million lots were offered to the market averaging over €18.6 with the aim of as low as €2.5 to reap the abnormal difference in all neglected for such a short period of time. The main “clients” in this movement, other than investors who see the downside and decide to take the loss, are the MSCI index funds that have to carry out forced sales due to restructuring. It happened in the past and looks like it will happen again in the future.

From June 20 until yesterday’s meeting, more than 7.88 million shares have been traded, accounting for 6.6% of the total share capital of 118.1 million shares. This small percentage, which becomes even smaller if we take the daily and limited trading in and out of the share, has strangely managed to reduce the capitalization of TERNA Energy to less than 2 billion euros. For now, of course.

Moving now to the in-depth analysis and applying the Fixed Range Volume Profiler (FRVP) to the duration of the strong decline, we see that the first bearish wave that occurred from June 20th, €21.34 to July 18th, €17.60 was accomplished with a trading volume of 3.67m shares and a Vwap of 19.22. euro. But the next wave of downward pressure until yesterday occurred with 4.21m shares but with a new estimated Vwap at €17.14. So now one can understand that the decline started “easily” with lower cuts but at a higher average price while it continued with a larger volume but much lower average price which gives a significant downside profit advantage to the price differential between them.

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However, FRVP, since it mainly recognizes daily transactions and does not count them in the total volume of transactions, comes in with a net volume of 5.508 million blocks out of the 7.88 million blocks I mentioned above. The actual Vwap now gives a net trading volume of 17.91€ and this is because the large trading volume which is 19% of the total occurred in a sideways stabilization movement between July 28th and August 10th and between 17.70 with 17.03€. During that period, it is very likely that some short-term investors came to play MSCI’s restructuring by buying TERNA Energy to stay in the index, but eventually fell into the trap of shareholders, who knew the news, and then pushed it out. Direct sales lowered the share price even if it was preceded by a -20% drop.

From the indications so far, as we still have several meetings until the August 31st rebalancing, it seems that the key that could cause damage to shareholders is the stock rising above the level of 18.07 € to 18.30 €. There it is very likely that buyers will rush to cover the ‘opening’ which will push the stock price higher. But for this to happen, only a large “interested” investor, whether institutional or not, can get “ears” by buying, at such a nice discount that the share price now enjoys, a large number of shares.

I remember a similar case of serious undervalued speculation that took place in the spring of 2007 with PPC prices ranging from 22 to 20 euros. Some powerful people took advantage of them and drove the share above 30 euros, forcing them to buy Aaron Aaron, which drove the share even to 37 euros.

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I’m not saying that the profit should be from the “short” of the position, but within the limits of what is permissible and for companies that present a problem in their fundamentals and justify the -25%. But not in TERNA Energy, which is currently the leader in one of the hottest sectors worldwide and is expected to play an important role in Greece’s energy transition in the coming years.

Not in a group that shows rapid growth, but set as a strategic objective the creation of a portfolio of renewable energy projects with a total capacity of 3.3 GW by 2025 and 6.4 GW by 2029, thus establishing a strategic investment program of up to 5 5 billion euros and will be able to generate annual revenues of more than of €1.25 billion and an EBITDA of over €700 million.

Even those who know about green and renewable energy projects understand how important the group is at this moment when interest in the local market has soared with “deep” investment portfolios trying to anticipate the coming energy boom. the shift. In fact, the value increases even more if we consider that the bulk of the RES in TERNA Energy is already “insured”, while for someone who starts today and wants a piece of the giant green energy pie, he has to literally take out the “white hair” in order to get from the first stage For study and licensing to the final stage of connection to the electricity network and the supply contract. In short… many grooms but only one bride.

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Graphically, the stock is now approaching the semi-weekly price chart, the very strong support level of €15.85, which will force many to get their hands dirty.

Restructuring and restructuring, this area of ​​€16.20 to €15.65 can only be described as an important opportunity for any mid-term investor who wants to play green energy and the dance of deals that have been made around it aiming for prices above €22.

* Apostolos Manthos is responsible for technical analysis and investment strategy