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

To: Grommit who wrote (37077)	3/26/2010 12:13:33 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78697

Grommit. Yes, also sold a little GOV past two days. I currently hold a little PEG with an early March ('10) buy. Stock's down a bit. I'll check to see if I'll take a little more. Your portfolio now almost entirely in stocks that pay distributions? I don't see any common stocks like oil/gas, consumer, etc. That a planned defensive move?

To: Grommit who wrote (37077)	3/26/2010 12:34:23 PM
From: Paul Senior	Respond to of 78697

PEG. Yes, I'll up my position a bit at current price.

To: Grommit who wrote (37077)	3/31/2010 4:22:40 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78697

Fwiw, I sold a bit more GOV today. Also some ABT. I'm going to try to add back if these stocks drop in price. Added just a very few shares of VSEC to the few I already have. To park some cash, I took on some more PHB. finance.yahoo.com

To: Grommit who wrote (37077)	7/8/2010 8:08:27 PM
From: E_K_S	1 Recommendation Read Replies (2) \| Respond to of 78697

Hi Grommit - Re: Empire District Electric Co. (EDE) One of my larger dividend plays, I hedged 1/2 of my position today selling the Dec $20 calls for $0.65/share. I also should receive two dividend payments of $0.32/share per quarter (September 3rd Qtr & December 4th Qtr). The 2010 analysts estimates would give a 15.6 PE at $20.00/share and for 2011 the PE would be 13.8. This is getting a bit high for my comfort zone especially since Yahoo has the EDE dividend payout ratio at 106% (this is based on lagging earnings). The company did get approval for a July 2010 rate increase for their Kansas electric customers but I believe it was only 60% of what they had asked. There are pending rate approvals in process to accelerate the recovery of capital improvement projects which will help further support the current divided. However, I do not see the company increasing their dividend any time soon. Therefore, by writing the December $20 calls, I can increase my overall return by 6% and if the stock gets called away, it becomes a source of funds for reinvestment. With a 7% dividend yield, a 6% call premium generated from writing the covered calls and a 11% potential capital gain based on my avg cost (if the stock is called away at $20.00/share), I can lock in a 22% return on one half of my EDE position by December 17, 2010. I may even be able to write the calls again after December 17, 2010 to further enhance my overall return. In the current environment, I prefer to stay in good paying utility companies (both regulated & unregulated) with PE's at 11 or lower with overall debt levels supported by current cash flows and/or non strategic assets that could be sold to reduce debt if required (eg. NG reserves owned by unregulated division of a utility, wholly owned NG pipeline subsidiary similar to what EDE owns & operates etc.). I think it pays to be on the defense in this environment. It's still not absolutely clear to me that a double dip can be avoided. EKS