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

To: Spekulatius who wrote (43859)	8/15/2011 1:04:06 PM
From: Jurgis Bekepuris	Respond to of 78634

I looked at RWE again including Q2 (H1) report. It is cheap on some metrics, but hurting on the nuclear close down. PSR is low, but it is now losing money, the tangible book is negative, d/e is ~2. If they manage to turn around without fire sale and heavy secondaries, it might be a good investment, but I think I will pass.

To: Spekulatius who wrote (43859)	9/1/2011 10:46:20 AM
From: Spekulatius	Respond to of 78634

re RWE.DE, H1 results: rwe.com Earnings down 35%, Dividend cut to follow. A- credit rating at risk and they need to keep it, otherwise their merchant energy buiz is toast (my take). They intend to sell treasury shares worth 2.5BEuro to beef up the balance sheet , in addition they plan on selling several energy business units ( grid networks, stakes in power plant, the oil exploration business) for 11B Euro and reduce Capex to 4B Euro annually. All this will reduce the earnings power of course. Their gas merchant business with Gazprom is sucking wind big time because prices are indexed to crude (boy who agreed to this idea) and they are now renegotiating. Improvements on this end not expected before 2012.... Well these are my notes. They forgot to give an earnings forcast - my guess is probably 3-4 Euro/share. if one is willing to hold for quite some time, this may work out but it's a longer shot. EON may be in better shape but I have not looked into their reports in detail. Fundamentally they are in the same boat, but the extend is the question.