Calpine is being clobbered along with the entire electric utility industry, even though CPN is not a regulated utility. CPN is an independent power producer. At 32, with a forward PE of 35 and an earnings growth rate estimated at over 40%, I would like to know of another growth opportunity that looks this good. This is a great buying opportunity.
The power problems in California need to be solved, in major part, with the construction of new, high efficiency power plants. That is what CPN is all about. Given that much of CPN's fuel, mostly natural gas, is bought on long-term contracts, and since they own some of their own gas fields, CPN earnings should not be hurt much by rising NG prices. The rising electricity prices will continue to benefit CPN.
The only viable alternative to Calpines NG-fired combined cycle and cogeneration plants that I see is clean coal technology. Anyone have any ideas for companies that will benefit from that? I know that Siemens is big in clean coal, but they are such a big company that it will not make that much difference to them. What about very good coal companies (good environmental record, high quality reserves, proximity to power plants and electricity demand, low sulfur coal, etc.)? |
