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Is it wise to chase down the purchase price of AGL I bought months ago, by buying more shares at the current lowest levels in 10 years? Is it throwing “good money after bad”?
A: If you are patient and can wear the pain, I would be inclined to hang on. “Doubling up” is a higher risk strategy. I wrote about AGL at the end of July – see
https://switzerreport.com.au/is-agl-in-buy-territory/
AGL reported a couple of weeks’ back, largely meeting expectations for FY21, but guidance of EBITDA in range $1,200m to $1,400m in FY22 was lower than the market had expected. Brokers remain negative on the stock – 3 neutrals, 2 sells – but target prices are somewhat higher. According to FN Arena, consensus target price is $7.39 – with a range from $6.88 through to $7.80.
No short term fix to AGFL’s problems, but because it has been sold down so hard, most of the pain has been taken.
