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

To: Spekulatius who wrote (34418)	5/8/2009 3:10:03 AM
From: E_K_S	Respond to of 78735

Thanks for your opinion on CNP. I was looking at it again today and was a bit concerned by their large "transition" debt too. I believe the worse traunch of debt was rated BBB+ and the others were AAA ( investors.centerpointenergy.com ). I could not identify any preferred series so all of their financing is done with the transition bond companies. Bonds are long term and were financed in 2001 with no need for any refinance in the near future. My long term view on the NG market, specifically pipeline consolidators and distribution channels is very positive. In 10-15 years I believe there will be a transition to fueling cars and trucks with NG partially due to overwhelming cap & trade taxes. The cost per BTU of NG compared to gasoline is about 55% less. One gallon of gasoline is about $2.50 while the equivalent amount of BTUs of NG is about $1.35. Clean NG will fuel more electric power plants too. So that's my premiss for the investment. I already own NG pipelines in Canada and in the mid-west but nothing in the south. I noticed that the stock sold as low as $5.00/share in 2003. I am not too sure that they can maintain their high dividend and meet their growth projections. Their dividend has doubled since 2003 but was slashed 70% six months earlier in 2002 from $0.37/qtr to $0.10/qtr. Currently they pay $0.19/qtr. So they do have a history of cutting their dividend. I might nibble at a few shares for a starter position if it breaks $10/share. The stock goes xdividend next week (5/13/2009) at $0.19/share. I will have to look at AEP but I am trying to stay with my NG theme as it appears to be the one commodity that is really on sale now. EKS