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Gold/Mining/Energy : CPN: Calpine Corporation
FRO 24.09+1.8%Nov 10 3:59 PM EST
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To: Drake who wrote (10)1/17/2001 1:32:15 PM
From: deepenergyfella   of 555
 
Drake,

I don't know if I'm qualified to give an answer other than my personal opinion as I'm a little weak in the academics of some of these financial ratios.

I clicked on 'industry group' for CPN and scrolled down
to see the majority of the utilities have done very well
in the past 12 months (based on share price appreciation only) which gives me the idea that the the price component of the PEG ratio could be a stronger number than it currently is and has room to increase.

If PEG is just a ratio of 'price to earnings to growth' equalling 0.62 and that ratio is a low number compared to CPN's peers in its industry group then I'd say the low number could be due to any or all the following:

a)the market has failed to accept utilities like CPN are viable growth investments because they have traditionally invested in growth stocks that had a biotech or tech flavor that seemed more marketable than a plain old utility.

b)other utilites in its industry group have more appeal by folks on wall street who may not fully understand CPN yet.

c)Perhaps the uncertainties in deregulation in some markets that Calpine is establishing itself are interpreted as too risky at this stage for some investors who have taken a wait and see stance.

that is my two cents..., I'm pretty certain Calpine is one to watch and possibly own this year especially if they do something in Calfornia.

def
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