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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (33996)	3/31/2009 12:59:02 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78748

BKH. I also don't know the key metrics pro analysts use for evaluating utilities. Given what I already said, and my observation that BKH is perhaps at a 11 or 12 year low while in that period of time dividends have steadily increased and stated book value has risen from under 10 to 27, I have to believe the $17 stock is undervalued. I assess the risks of these comments, this way: "regulators can screw up". Possible, so far though BKH has been able to work through what they (BKH) want and what regulators allow. So not a concern to me. (Maybe it should be, but it isn't -g-) "coal getting whacked". There's got to be a substitute before coal plants are shut down - if they ever are. Can't have people without reasonable substitutes. I don't believe it's there and available to BKH customers. (I could be wrong.) The big problem/issue for me is that BKH is a diversified "energy company", part of which is regulated (steady income I presume) and part of which is not. We have seen these staid/conservative/bureaucratic organizations get greedy or try to juice company profits and thus their executive bonuses by taking risks in the unregulated market that they improperly assessed and/or could not manage. And THAT has brought several to their knees or to the floor (bk). Imo this company (BKH) is not without risk. They are small and in several energy businesses. Some of which seem to be related to trading energy, the downfall of several companies. For me, I'll try to control risk here by only going for a small position and by diversifying (e.g. MIR-- another also in the unregulated market). If BKH can just continue their ways, just do okay, I expect with the 8% dividend yield and given time, the company will be a double within four or five years. I hope.