My thoughts exactly.
The power producers were in danger of following the
same trajectory as the natural gas producers when they
first deregulated the natural gas industry. From my
recollection, when they lifted price controls/regulated
prices, natural gas prices first shot way up and
producers were all making a ton of money. Industry
forecasts were for a continuation of high prices;
producers overinvested, ended up bringing way too
much capacity on line, and the price of natural gas
crashed along with the profits and stock prices of
natural gas producers. Adding insult to injury was
that the problem of capacity overhang served to depress
the industry for several years.
With Moody's enforcing market discipline through
their bond rating downgrades, the widespread
cancellation of plant construction actually bodes
"well" for the future.
By the way, my understanding is that Moody's is the
big stick that most bond investors follow, at least
in this sector, so the fact that Fitch's and S&P did
not follow along with similar bond downgrades is not
as, or that meaningful.
Wondering if anyone has any comments on this link:
nasdaq.com`&symbol=MANU`&symbol=CSCO`&symbol=IMIC`&symbol=SUNW`&symbol=ARBA`&symbol=DVIN`&symbol=IBM&symbol=OMKT&symbol=ITOW&selected=MIR&FormType=summary
which shows institutions accumulated/bought 55 millions
shares more than they sold. No other companies in this
sector show such one-sidedness (AES, CPN, DYN, etc.)
regarding shares bought as opposed to shares sold.
I'm thinking it may be an anomaly tied to Mirant equity
offering in December. Would be interested in anybody
else's take.
Good luck to all. Peter.
Disclosure: Long Mirant |
