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

To: Paul Senior who wrote (34592)	5/26/2009 1:37:55 PM
From: E_K_S	Read Replies (1) \| Respond to of 78744

Hi Paul - SCANA Corp. (SCG) looks interesting. I followed you in for a small starter position. I noticed that they have a few non regulated businesses specifically a 500 mile fiber optic network and several data centers ( scanacommunications.com ) that should provide some future growth to their main energy & electrical utility business which could eventually become a valuable hidden asset. Your approach of looking at the historical PE's and calculating the future value on a reversion to the mean assumption seems like a good way of identifying "potential" value in these utilities. According to SCG's 2008 statistical report ( scana.com ) the 2008-2003 historical PE's are as follows: 12.1 % 15.4 % 15.2 % 14.0 % 17.1 % 13.5 % with a six year mean value of 14.55. Based on Yahoo's 2010 analysts mean estimate of $3.02, the reversion to the historical (six year) PE mean price for SCG s/b $43.94/share, a 50% increase from the current price. The 6.4% dividend should provide a good backstop if the market turns sour again. The stock is near it's seven year low of $25/share. Any retest of the lows, this should be a good one to add to. Also, I see that SCG is tagged by Schwab as a "HTB" (Hard To Borrow) security. I am not sure why this is (perhaps arbitrage with the preferred?), but if there is any reason to begin covering, SCG could move back to it's mean PE price faster than some of the other non HTB utility stocks. EKS