Mike, I bought some ENE today, The massive volume yesterday
appears to be a selling climax, I've been critical of them
and have posted several articles on the conflict of interest
in the limited partnerships that the CFO was engaged in.
But I think that the company is cleaning up the problems.
the company has confirmed earnings estimates of 1.80 this
year and 2.05 for 2002. That's a PE of 11 (based on ENE
at 21) for this year and a PE of 10.24 for 2002.
The price to sales is a very low .1, actually even lower
than that.
The CEO says that there is no chance of the company being
downgraded below investment grade, and they are working
with Moody's to help them better understand the business.
It should be noted that only Moody's has put ENE no a credit
review and the the other two ratings agencies, S&P and
Fitch have not done so.
CEO Lay also indicates that they'll get try to get the
balance sheet and Quarterly numbers out in a more timely
fashion.
Energy prices continue to be volatile, as we've seen with
the recent advance in Natural Gas from 2.26 to over 3.00
the past few weeks, and they should be able to continue+
profit in their energy trading.
there is some hope longer term for their broadband business,
although the street is not factoring that into their
thinking. It's not essential for ENE to continue to
make money.
ENE should continue to grow earnings going forward, and
so a PE of 10 is very attractive.
Here are is a summary of the conference call:
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10:30 ET Enron Corp (ENE) 21.58 +0.93: -- Update -- In response to analyst question, CEO conceded the Board and everyone involved recognized there would be an inherent conflict of interest with LJM2, but said company did everything possible to ensure there would be no impropriety and that shareholders would be protected... Says there was a "Chinese Wall" between LJM and Enron... Even if dealings were entirely above-board, Briefing.com can't help but think that management should have known better than to even allow the appearance of impropriety... separately, analysts are making a point of admonishing company for not communicating better; Goldman Sachs analyst says Enron's lack of transparency creates impression that it is hiding something... Enron says it is now committed to holding additional investor calls on a more regular basis; will set another call up in next few weeks and provide FAQ area on website to help explain current situation.. call just concluded
10:08 ET Enron Corp (ENE) 21.96 +1.31: -- Update -- CEO says he doesn't think there is any chance of Enron being downgraded to below investment grade... indicates company is committed to maintaining its credit ratings and is working with Moody's to help that agency better understand the company's business
09:58 ET Enron Corp (ENE) 22.10 +1.45: -- Update -- On call, analyst asks why no balance sheet with recent earnings release given company's previous claim that it will work to offer investors greater transparency in measuring its performance... response was that balance sheet doesn't normally come together until the week after its earnings release and that it will be included in 10-Q to be filed by Nov. 14... CEO indicates that it will do a better job of improving timing of release of earnings and balance sheet in future, implying that investors won't have to wait all the way until 10-Q filing deadlines to see balance sheet
09:48 ET Enron Corp (ENE) 21.67 +1.02: -- Update -- On call addressing SEC inquiry, company's prepared remarks largely a reiteration of what has been said in recent press releases and on Q3 conference call last week... says it has the necessary liquidity to maintain normal operations and reiterates FY01 EPS guidance of $1.80 and FY02 guidance of $2.15 |
