DRXGF - Drax Group: Selling At A Discount To Book Value Due To Stranded Assets Soon To Be Removed From The Calculation
Drax Group is a British electricity generator which is trading at a significant discount to its underlying asset value. The company is nearing the end of a structural transformation away from coal generation and this should herald a re-evaluation of the company’s asset value. This year also brings several important regulatory decisions which can be expected to significantly benefit Drax.
Undervalued Due to Coal Dependency and Switching Costs
Up until recently, Drax Group operated the largest coal-fired power plant in the United Kingdom. The company’s Drax power plant remains the largest in the