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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Podsiadlik who wrote (17179)	10/11/2002 2:24:41 PM
From: ItsAllCyclical	Read Replies (2) \| Respond to of 18998

Quoting Cramer? Oh brother. He's very rarely ahead of the curve. Look at EP's annual report. Only 34% of their EBIT comes from the merchant trading business. Write that down to 0 (which I doubt) and you still have significant assets that far exceed their debt. Look at my previous posts and do the math. Lumping EP in with Enron is a classic Cramer move. I remember just a few years back when oil was $12. Cramer was short the entire initial move. He then totally missed the gold move when the markets fell apart. He finally embraced ABX the biggest hedger...LOL. If there's one sector Cramer just does understand it's the energy sector. Have you bothered reading EP's response to the FERC ruling? elpaso.com FERC ruling is dangerous legal precedent if it holds (very doubtful): biz.yahoo.com "It raises a question in particular over whether or not a pipeline has the discretion to reduce capacity for maintenance or safety reasons," Welton said. Worst case scenario will be a compromise of some sorts. Am I holding out for $60 to $70 again? Hell no. At $15-20 I'll be gone with most of my shares. EP is selling some of it's assets which means they're unlikely to trade back to their former highs any time soon, however, it also means they're preparing for a worst case scenario and they won't be going BK with 5 bil in cash and their asset reserve. This is a gift long at these levels. Short of BK, the bad news is more than priced in here. It was a great short at 70, 60 and 50. I just think the "short side" is old news here. As the facts come out El Paso will be differentiated from the DYNs ENEs and IPP's out there.

To: Kevin Podsiadlik who wrote (17179)	10/11/2002 2:51:03 PM
From: ItsAllCyclical	Read Replies (1) \| Respond to of 18998

>> Enronitis Germ Lives on in Utilities << Here is the crux of Cramer's problem in comparing ENE to EP. ENE went under precisely because they shed all their physical assets (their E&P side) looking to become a pure-play in the trading sector. When they ran into problems they had no reserves so to speak. The IPP's are going down due to debt load and reliance upon ENE and that sub-sector of the energy business. EP still has substantial physical assets. Only a small part of their business came from ENE type transactions. Only 800 mil of EP's debt is coming due next year and they have cash flow of over 3 bil. When the CA crisis hit EP didn't go out and build massive amounts of infrasture like some of the IPP's (CPN). As such their debt is very manageable. In a worst case scenario they can always cut the dividend which is about 500 mil/year. If they don't cut it soon the shorts surely aren't going to enjoy paying the 15% annual dividend as it comes due quarterly. Is anyone out there saying that TYC is going to 0? No. In spite of their accounting issues they still have substantial assets. But because EP has a small portion of their business in Merchant trading it's suddenly painted with the same brush as ENE. ABSURD.