Why December has been such a stellar month for AGL (ASX:AGL) shares

Can the AGL share price continue its positive run in 2022?
The post Why December has been such a stellar month for AGL (ASX:AGL) shares appeared first on The Motley Fool Australia. –

The AGL Energy Limited (ASX: AGL) share price has reversed its declining trend this month. This comes after the energy company’s shares fell to a near multi-decade low of $5.10 during mid-November.

Fast-forward to today, investors have bought up AGL shares leading to a 14% gain in December.

At yesterday’s market close, AGL shares edged slightly lower by 0.32% to $6.16 apiece.

What’s driving AGL shares higher?

It’s been a relatively quiet couple of months for the company with its last market sensitive news being its full-year results.

However, AGL shares have soared upwards as it appears investors have found the bottom. A report from the Australian Securities & Investments Commission (ASIC) last week, advised that just 1.47% of the company’s shares are being shorted.

In contrast, when AGL shares were trading at near record lows last month, 4.52% of its shares were held by short sellers.

In addition, management believes that 2022 will be a much more positive year compared to 2021. The company previously noted that a sharp decline in wholesale prices for electricity and renewable energy certificates affected its financial performance. AGL regarded the 2021 financial year as one of the most difficult energy markets on record.

As such, management has focused on reducing operating costs by $150 million by the end of FY22. Also, the sale of non-core assets for $400 million by the end of FY22 is expected to provide ample firepower to the company’s balance sheet.

Plans to turn around the company’s fortunes in becoming a more agile business towards renewable energy are progressing. AGL is aiming to split into two separate businesses by June 2022. They are bulk power generator, AGL Australia, and a carbon-neutral energy retailer, Accel Energy.

About the AGL share price

In 2021, the AGL share price has continued to plummet in value, losing almost 50% for investors.

Based on valuation metrics, AGL presides a market capitalisation of approximately $4.06 billion, with approximately 658.38 million shares outstanding.

The post Why December has been such a stellar month for AGL (ASX:AGL) shares appeared first on The Motley Fool Australia.

Should you invest $1,000 in AGL right now?

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More reading

In the ‘dog basket’: 6 ASX shares that could rebound in 2022

The stories that rocked the ASX 200 in 2021 revisited

The AGL (ASX:AGL) share price is up 16% in a month. Here’s why:

Could 2022 be a good year for the AGL (ASX:AGL) share price?

Could the worst be over for the AGL (ASX:AGL) share price?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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