Stock market tip: Buy shares from gas companies

Stock market analysts working for Prime Transaction and SSIF Broker Cluj Napoca recommend buying Transgaz (TNG) and Romgaz (SNG) shares which, according to estimations, have a growth potential of 26%, 23% respectively.

Transgaz shares could increase to a target price of RON 232 per title, from RON 182/title which is the current price. TNG shares dropped in value over the past two years after:

– the Government made a public sale offer (two years ago);

– Fondul Proprietatea sold its stock ;

– the Nabucco project failed.

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Prime Transaction argues now is the time to invest:

– the dividends are very attractive (11% brute return, if 85% of the company’s profit will be distributed)

– raising tariffs on natural gas deliveries by June 30;

– the free-float (percentage of shares in free circulation) will climb to 41.5%, which increases market liquidity, thus encouraging investors to buy.

“These changes will partially compensate the negative effects caused by the monopoly tax, the Nabucco provision and the tendency to reduce gas consumption in the industrial sector (as a result of the liberalization process”, Prime Transaction brokers argue for economica.net.

Broker Cluj analysts indicate a target price of RON 41.8 / SNG share, according investors quoted by ZFcorporate.ro. The increase potential is almost 23%, spurred by liberalization, big dividends and market liquidity.

Warning

The aforementioned estimates are not definite and stock buyers must assume full responsibility for their decisions. Analysts estimate prices based on company assets and through comparison with other companies, based on different criteria.

Changes in the market or new information can always overturn the perspectives. Estimates are guidelines but not suggestions, even if they are called recommendations.