Shares of Centrica (LSE: CNA), the owner of British Gas, are trading at 260p, as I write a level not seen in more than five years.
Over the same period, the FTSE 100 has risen 24%. Companies in other areas of the utilities market have done even better: National Grid (+40%) and water firms Severn Trent and United Utilities (both +99%).
Whats behind Centricas dreadful performance? Well, for some time, the UK energy sector has been facing what Centricas recently departed chief executive Sam Laidlaw referred to as unprecedented public and political debate about energy bills.
Back in September 2013, Centricas shares hit an all-time high of over 400p just before Labour leader Ed Miliband promised to freeze gas and electricity prices until the end of 2017, if his party won the upcoming General Election. Centricas shares took an immediate dive and have been falling pretty relentlessly ever since.
Theyve taken another hit today, following an appearance by Miliband on the BBCs Andrew Marr Show at the weekend. The Labour leader told Marr he wanted to give energy regulator Ofgem new powers to force firms to cut bills to reflect falls in wholesale energy prices, and would be calling a vote in parliament during an opposition day debate on Wednesday.
As an side, the irony is that household bills havent come down as fast as wholesale prices in part because energy firms hedged against Milibands potential price freeze by advance buying large quantities of oil and gas at what were then higher prices. A lesson in the law of unintended consequences.
But back to the question: Has Ed Miliband turned Centrica into a great opportunity for contrarian investors?
Well, the shares of Centricas fellow Footsie energy firm SSE have produced a far less dire performance since Millibands price-freeze pledge. That implies there are other factors particular to Centrica at work which is indeed the case.
The company issued three profits warnings during 2014, downgrading earnings-per-share guidance for the year to 22-23p (in May), 21-22p (in July) and 19-20p (in November). However, much of Centricas troubles during the year were caused by the weather atypically mild in the UK, while, conversely, the companys business in North America was hit by the Polar Vortex.
Barring a repeat of this scale of meteorological mayhem, Centrica expects to deliver earnings growth in 2015 although we should note that oil and gas prices, which impact the groups upstream business, have fallen still further since that November statement.
Despite a below-par 2014, and near-term political and oil-and-gas-price uncertainty, Centrica looks appealing as a contrarian bet for long-term investors, particularly with its whopping 6.5% dividend yield.
Centricas chairman Rick Haythornthwaite and new chief executive Iain Conn have recently been buying shares in decent quantities, as has top fund manager Neil Woodford.
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