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Non-Tech : The Official Guide To GOOFS
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To: Paul Weiss who wrote (155)6/11/1996 8:30:00 PM
From: Rick Sooy   of 3539
 
Buenos GOOFI's Senior Weiss, One of your criteria for GOOF's is not whether or not the stock in question pays a dividend. We need to expand our thought processes here and discard old notions that utility stocks must pay a dividend. Once deregulation is in full swing MOST of the utility stocks will have to reduce, or even cut out their dividends(I know this is heracy of the highest order for income investors) however if you read enough utility annual reports (I had 8 of them at one time) everyone without exception is trying to lower shareholders expectations for the future. Most are frantically trying to deversify and/or go overseas to try to keep their profits up. Some are comming out now, early, in plain english and telling shareholders that they plan to reduce their payout to finance these new ventures. Take a page out of the airlines book to see how deregulation helps the consumer but decimates the industry-for a decade or so. Now as far as TEP is concerned, clear your cranial cavity of preconceived notions and tell me where there is a utility stock today selling for $2-3.-before the reverse split) that pays ANYTHING (besides Niagara Mohawk who is also in the crapper and I think has suspended their dividend recently). I see TEP as maybe more like a speculative growth GOOF. Sure they still have a load of debt and plenty of risk but they appear to be doing the right things to dig their way out(although I do think they should have waited until they were in better shape to declare that reverse split. Just gives the stock farther to drop now,if they can't pull the rabbit out of the hat. I would have much rather seen the street recognize the turnaround and the stock go from say 3 to 6 or 9 and triple my money on the speculation than to see it where it is now-from a speculative standpoint you understand). I think the stock is still the red-headed stepchild of utilities because the focus group is income investors. My real question is; Down the line will they ever reinstate even a small dividend which will make the street take notice again and will there possibily be a chance for some appriciation that you normally don't see in utilities? As I said, chances for BIG speculative gains now, based on the industry average, are a lot slimmer but I guess I'll just keep my 40sh (after the re-split)and see what happens. Must be that hot GOOFI speculative blood in me-or maybe brain gas! Best Wishes good buddy.
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