Your questions answered

There's no doubt about the quality of AGL's businesses. Over the years a diversified asset base has been developed that's now providing a springboard for the company's current growth initiatives. It's now trading on very high PER multiples so you need to ask whether the share price has run ahead of itself in recent times and what will be the driving future EPS growth. A growing number of analysts are assuming lower or relatively flat EPS growth in coming years and on PER of around 19, it's a concern. The industry is buzzing with talk about the extent of premiums paid for recent privatisation's and acquisitions. The share price is now 10% below its recent highs and is continuing to come under pressure. We will be reviewing AGL in a forthcoming issue but in the meantime, hold.