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

To: Spekulatius who wrote (35526)	10/2/2009 11:23:49 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78715

Utilities. I am surprised how the many utility stocks I am following seem to rise and fall together in the past few days. Today, for example, except for one (GXP, up 5 cents), my screen shows all others down right now. And it's a diverse mix - geographical,gas, electric, regulated, non-reg. Somebody mentioned utility stocks rise and fall with the price of oil, and that seems to be so, right now. If so, I'm not thrilled with that. Just adds more volatility to the portfolio since I'm holding a significant amount of oil company shares.

To: Spekulatius who wrote (35526)	5/1/2010 12:28:03 PM
From: E_K_S	1 Recommendation Read Replies (2) \| Respond to of 78715

RE: Laclede Group Inc. (LG) Atmos Energy Corporation (ATO) Finally was able to start a small position after the stock sold off on poor quarterly earnings. I never got in when you first mentioned it and have been wanting to add LG to my basket of NG stocks. The company reported a 9% decrease in profits and a 4% decrease in revenues for the quarter (YOY). The drop off was due to slightly lower margins in their non regulated business but they had higher overall profits in their regulated businesses. They do continue to do better from Q1 to Q2 but their non-regulated subsidiary, Laclede Energy Resources, reported 1/2 their last year's revenues basically as a result of much lower NG prices. The company generates excellent cash flow at $11.00/share and fits Buffet's criteria for total debt to annual revenues of no more than 3:1. My thinking is that if the company is profitable with NG at historically low prices (ie $3-$4 per mcf), once NG moves to more historical price levels, earnings should benefit. Their PE at 13 is a bit less than many of the other pure NG pipeline companies I own (except ATO which I recently bought). They continue to pay a consistent 4.5% dividend reflecting 9 increases over the last 16 years (a 30% increase over 16 years) while maintaining a payout ratio below 60%. The stock sold back to its 200 day MA Friday down 3.5% from it previous day's high with only average selling volume based on their poor earnings report. Therefore, I added a small position thinking this might be a good entry point. Like you said, this is a boring stock with not much movement or trading volume. I am thinking of building the position on any additional sell off, perhaps to the low $30's and then selling an out of the money covered call on a portion of the position. The stock has traded as high at $55/share when NG and oil prices were selling much higher. Otherwise, you can expect the company to trade in a 15% banded trading range between $30/share and $35/share. Atmos Energy Corporation (ATO) has a similar financial profile but has operations in a different geographical region (ie Texas). Laclede Group Inc. (LG) has more NG storage assets which s/b in more demand as NG drilling ramps up in the next 3-5 years in the Balken and other prime US shale regions. Both LG and ATO should benefit from this increased drilling activity as Texas and Louisiana are considered prime distribution points for NG and LNG gas. finance.yahoo.com I am still trying to find companies that deliver and store NG in the Northeast Region of the U.S.. Here is a pretty good list of companies that operate in this region (Natural Gas Pipelines in the Northeast Region - eia.doe.gov ). I am specifically interested in those companies that deliver and operate LNG facilities near the coast ports. Finally, LG has underperformed several of my other basket of NG companies so it could be the next one to move higher in the group. finance.yahoo.com My starter position in LG is less than a 1% portfolio addition. However my basket of NG stocks (about 17 so far) comprise of companies that own or operate NG assets including working wells w/ long term reserves, pipeline & tanker operations, gathering & storage facilities, NG electrical generation facilities and consumer retail propane distribution franchises. These companies now account for about 15% of my taxable portfolio. I am always trying to find companies from around the world which have a NG component and theme that I can add to my growing group. I also own shares in the Tortoise Energy Infrastructure Corp. (NYSE: TYG) fund. Paul Senior first mentioned this fund last year. It operates at a reasonable management fee and trades on the NYSE w/ ok daily volume. They hold a basket of publicly-traded master limited partnerships (MLPs) that operate in the energy infrastructure sector. This allows me to stay away from owning the actual MLPs and still receive the nice dividend stream (currently yields 12.5%). tortoiseadvisors.com EKS