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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerAlliant Energy Corporation (NYSE: LNT) is a
Midwestern U.S. energy utility, serving approximately one million electric and 400,000 natural gas customers through regulated subsidiaries Interstate Power and Light and Wisconsin Power and Light. Nonregulated operations include rail and marine transportation services, independent power production and real estate. Alliant also provides engineering, consulting, and management services. Xcel Energy (NYSE: XEL) is a major competitor.
The company pleased investors last month, when it reported Q2 EPS of 47 cents and revenues of $827.4 million. Analysts had been looking for 39 cents and $770 million. The CEO noted that Alliant had secured 500 megawatts of wind turbine generators during the quarter, expecting wind to play an integral part in meeting future customer needs. Management also guided FY08 EPS to $2.60-$2.80, versus Street consensus of $2.57.
The LNT
share price popped on the news and then moved into a bullish "pennant" consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with two "strong buys" and two "holds". The LNT P/E ratio (8.87), Price to Sales ratio (1.07), Price to Book ratio (1.40), Price to Cash Flow ratio (5.41), EPS Growth rate (17.50%), Operating Margin (20.91%) and Net Profit Margin (12.07%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 59% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past fifty-two weeks, it has traded between $31.25 and $43.41. A stop-loss of $31.20 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in either of the stocks mentioned above.
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