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Gold/Mining/Energy : CPN: Calpine Corporation
FRO 24.09+1.8%3:59 PM EST
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To: Daniel G. DeBusschere who wrote (50)3/29/2001 12:46:57 PM
From: Daniel G. DeBusschere  Read Replies (2) of 555
 
Where did everybody go?
CPN is one of the current stars and no comments?
If you are interested in investing in one of the more "responsible" generators then CPN is a good candidate:
(1) They were first to cut a deal with California to provide energy at rates which would not cause a rate increase for periods of 10 to 20 years.
(2) They have a plan and capability to grow their efficient gas fired generation plants at a 64% compounded annual rate of growth for the next 5 years. This alone makes CPN a growth stock and it therefore has a low PEG (i.e. much less than one) even though the PE is well above its "peers" and other energy stocks.
(3) They are smart enough to get vertically integrated. They bought natural gas reserves in sufficient quantities to assure juicy profit margins on their long term commitments.
(4) They are headquartered in San Jose and are not mentioned in the context of "out of state energy pirates" (i.e. from Texas, Michigan, North Carolina, etc.).
(5) The CEO is well liked and respected by the "Gov" and all members of both aisles of the California state legislature.
(6) Although it is not guaranteed, it looks like CPN will be sheltered from any draconian measures enacted by the "Gov" and California state legislature. At least this is the key reason I am long and remaining long on this specific equity. I would be very nervous with holdings in any of the gas lines, energy trading, and so called out-of-state energy pirates and that's why I am not long in these issues.
(7) One big concern is that the CPN CEO is liquidating his options in the open market at a rate in excess of his tax liability. But as it has been pointed out, he is getting up in age and still maintains a significant holding.
*****************
Someone take some shots please.
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