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Strategies & Market Trends : Value Investing

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To: Michael Burry who started this subject	6/4/2002 11:23:45 AM
From: LauA	Read Replies (2) of 78673

Some time ago I posted that EP in the low 30's seemed to be a reasonable value, but EP seemed too difficult to analyze. In the low 20's, I'm not sure that you need to analyze it. Folks are worried that it could be an Enron. I would bet against that. If for no other reason than the fact that MidAmerican chose them to buy 50% of their CE Generation, LLP to maintain their status as a QF under PURPA. (The BOD is composed 50:50 MEHC:EP) EP owns a bunch of pipelines, including a big one to SoCal that accounts for 45% of the Natural Gas used there. Since ALL of the new electric generation in CA is gasfired, they won't lack customers. ie, EP has/had a trading component, but owns hard cash producing assets vs. Enron. EP's treasurer just committed suicide, but this appears illness related. If you believe their numbers EP has a cash flow of ~3.5X and a free cash flow of ~8.5. Plus a dividend ~4%. What's not to like?

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