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Japan: The Impact on U.S. Nuclear Utilities

This post is part of Japan: A Special Report for Investors.

"Japan continues to reel from the aftershock of the magnitude 8.9 earthquake and subsequent tsunamis; among the hardest hit is the nuclear industry, which supplies 30 percent of the country's electricity" notes utility sector expert Roger Conrad.

The editor of The Utility Forecaster explains, "There's still a lot we don't know about the crisis. We've seen a massive selloff of in all things nuclear.In my view, this drop will be reversed as the situation calms down.

Continue reading Japan: The Impact on U.S. Nuclear Utilities

The Southern Co.: For Dividend Seekers Only

The Southern Co.'s (SO) shares have meandered near $38 since November, and if you haven't already, now may be a good time to consider taking some profits off the table, if you're in at the June 19, 2009, price of $30.61, and if SO's dividend is not a primary goal for you.

However, those who are seeking a decent dividend can maintain their full position in SO: a $1.82 annual dividend, good for a 4.9% yield at the current $36.60 share price, offers a modest income stream.

Longer-term, two to three years out, SO, with its 42.9 million megawatts of generating capacity, is likely to be a decent utility sector performer, and the reason is its Atlanta-area operations.

Continue reading The Southern Co.: For Dividend Seekers Only

Analyst Calls: AB, BG, CMG, CSCO, DF, EXPE, JLL, MU, NLSN, S, SO ...

Analyst Upgrades

  • Interpublic Group (IPG) to buy from hold at Deutsche Bank.
  • Radware (RDWR) to outperform from perform at Oppenheimer.
  • Fluor (FLR) and Waddell & Reed (WDR) to buy from hold, as well as AllianceBernstein (AB) to hold from sell, at Citigroup.
  • MetroCorp (MCBI) and American Capital (AGNC) to outperform from market perform at Keefe Bruyette.
  • International Flavors (IFF) to overweight from equal weight at Barclays.
  • BioCryst (BCRX) and Southern Company (SO) to buy from neutral at BofA/Merrill.
  • Bunge (BG) to overweight from neutral at HSBC.

Continue reading Analyst Calls: AB, BG, CMG, CSCO, DF, EXPE, JLL, MU, NLSN, S, SO ...

Rate Hike Boosts Southern Company (SO)

Southern Company (SO) logo"Over the past decade, Southern Company (SO) has generated a compound annual return of nearly 12 percent," says utility sector expert Roger Conrad.

The editor of The Utility Forecaster explains, "The recent approval of the company's three-year rate hike in Georgia -- source of nearly half its revenue -- is the best possible assurance of a similarly enriching performance for the next 10 years.

"The Georgia Public Service Commission approved 70, 93 and 87 percent of the requested increases for 2011, 2012 and 2013, respectively, as well as a superior 11.15 percent target return on equity.

Continue reading Rate Hike Boosts Southern Company (SO)

Chasing Value: How to Find Value Stocks -- Part 2

In Part 1 of this series I discussed starting with a good story and then examining the metrics, or first starting with the metrics via a stock screen and then look at the story behind the numbers.

A third possibility is to start with an idea that springs off the pages of a business journal. Some years ago, in the 25th anniversary edition of Money Magazine they listed a group of stocks that had gone up during this tenure. The one I liked the best that withstood closer scrutiny was Southern Company (SO), the electric utility.

The story and the metrics were great. It was located in one of the most desirable growth areas of the country. There was a favorable business climate, cheap housing, cheap land, good weather and an abundance of labor. The numbers were strong as well.

Continue reading Chasing Value: How to Find Value Stocks -- Part 2

Analyst Calls: ATW, CIEN, DE, GMCR, GPN, MEE, MT, POT, SNDK, SO, TSO ...

Analyst Upgrades

  • SanDisk (SNDK) was upgraded to outperform from neutral at RW Baird.
  • JPMorgan resumed Potash (POT) at overweight, up from neutral.
  • Ariba (ARBA) was upgraded to buy from neutral at Roth Capital.
  • Cirrus Logic (CRUS) was upgraded to buy from hold at Jefferies.
  • Morgan Stanley upgraded Tesoro (TSO) to overweight from equal weight.
  • Solarfun Power (SOLF) was upgraded to buy from hold at Auriga.
  • Barclays upgraded Ciena (CIEN) to overweight from equal weight.
  • Optimer Pharm (OPTR) was upgraded to outperform from market perform at JMP Securities.
  • Argo Group (AGII) was upgraded to outperform from market perform at FBR Capital.
  • BofA/Merrill upgraded Green Mountain (GMCR) to buy from underperform and Southern Company (SO) to neutral from underperform.

Continue reading Analyst Calls: ATW, CIEN, DE, GMCR, GPN, MEE, MT, POT, SNDK, SO, TSO ...

Utility Trio: Income Experts' Power Plays

nuclear power plant"Rising demand for electricity has been among the surest trends on which you could bet for the past 100 years;" says utility sector and income expert Roger Conrad.

The contributing editor to Personal Finance explains, "That's money in the bank for the companies that produce and distribute power, including these three Income Portfolio power plays: Dominion Resources (D), Southern Company (SO), and Xcel Energy (XEL).

"After a dip in 2008-09, Americans' power use is climbing again, as more and more electricity-using devices become essential to modern life.

Continue reading Utility Trio: Income Experts' Power Plays

The Southern Co. Is in an Uptrend

Looking for a sleep-well-at-night stock that will offer safety with modest growth? Then consider utility The Southern Co. (SO), first discussed here on June 19, 2009, at a price of $30.61.

Southern's business model isn't sexy, but it will likely benefit your savings account. SO is likely to be top utility sector performer, and the reason is its Atlanta-area operations.

Continue reading The Southern Co. Is in an Uptrend

Chasing Value: Granny Said, 'It Has Turned into One Big Casino'

Here is a common sentiment about the stock market: "No fun at all. As I have said before, I believe it has turned into one big casino largely divorced from its original goal of providing capital to companies who produce something of value."

There's a lot of truth to what "granny" recently said to me in an e-mail. Fortunately she also noted "FYI Granny's up 5.86% + dividends." That would give her a gain of about 10% in the past ten months since I posted Where should granny put $50,000, suggesting a very conservative portfolio for an uncertain time.

Not only has she earned a very nice return, surpassing her CD account by 9.5% (20 fold), but she was able to do so with a great deal less volatility than the overall market most of us have lived through.

Continue reading Chasing Value: Granny Said, 'It Has Turned into One Big Casino'

Chasing Value: NGG, Buffett, Barron's and Me

Four weeks ago, I made the argument that National Grid (NGG) might be on Warren Buffet's radar screen as a foreign acquisition. The strategic benefits, depressed stock price and yield all made it look like a good fit.

Ten days ago, Barron's trumpeted National Grid, a British company traded on the NYSE, for all the same reasons, absent the merger and acquisition possibilities.

So last week I bought NGG on a dip as a value proposition and if by some miracle "my pal Warren" makes a play for it that would be a bonus. Not to mention my crystal ball would go up in value. If you might be interested in a 7.72% yield from a company with the cash flow to back it up, read on.

Continue reading Chasing Value: NGG, Buffett, Barron's and Me

Anadarko Petroleum Tops Bullish Volatility Skews; Millipore Tops Bearish

Anadarko APC logoOption investors are pushing call option prices higher in the Independent Oil & Gas industry and are pushing put option prices higher in the Medical Instruments & Supplies industry today.

Any time the volatility skews above 1.00, it is an indication that calls are more expensive than puts. Typically, when calls are more expensive than puts, it means the demand for calls is greater than the demand for puts because investors believe the stock is going to rise in the future and they want to take advantage of that movement by buying calls.

The opposite is also true. Any time a volatility skews below 1.00, it is an indication that puts are more expensive than calls.

Continue reading Anadarko Petroleum Tops Bullish Volatility Skews; Millipore Tops Bearish

World Markets Crumbling with Greek Ruins, So Add Low Beta Stocks

Tuesday's good economic news on consumer spending followed good news on housing prices, and a majority of earnings reports beat consensus estimates. Nevertheless, it was not enough to sustain world stock markets from racking up sizable losses as economic news about Greek debt being downgraded to junk statues made us all tremble in crises proportions as the possibility of default looms.

The Greek government has finally asked that the European Union help by releasing funds committed just recently in a $45 billion Euro package. The EU, sending shivers around the globe, is balking until they see evidence that Greece has passed meaningful debt reduction legislation. In the mean time, Greek bonds have surged to 24%. This does not surprise me having recently questioned why anyone would buy Greek bonds at market rates given so many better alternatives.

Continue reading World Markets Crumbling with Greek Ruins, So Add Low Beta Stocks

Serious Money: Greek Bonds or High Yield Stocks?

When I read that economically troubled Greece has 10-year bonds currently yielding between 6.32% and 6.44%, I wondered why these have any worth at all given the many alternatives offering a better return and greater liquidity? This baffled me.

Only Tuesday, I wrote about Telecom Corp New Zealand (NZT), a stock paying over 10% yield. The story also mentions that AT&T, Inc. (T) is currently paying a 6.4% yield and Verizon Communications Inc. (VZ) is offering 6.25%. From my perspective, these are far better bets, safer and with some upside too than Greek debt.

Continue reading Serious Money: Greek Bonds or High Yield Stocks?

Analyst Calls: CIEN, COF, DISH, ED, GME, MOS, POT, TIVO, WEN ...

Analyst Upgrades

  • JPMorgan upgraded TiVo (TIVO) to overweight from neutral as it believes Thursday's appeal win against DISH Network could lead to revenue upside. The firm raised its target price for shares to $23 from $15.
  • Collins Stewart upgraded DISH Network (DISH) to buy from hold on valuation, as it believes much of the impact from the negative appeals ruling is priced into the stock. The firm has a $30 target for shares.
  • Cowen upgraded Ciena (CIEN) to outperform from neutral. The firm believes Ciena's acquisition of MEN is transformative and will accelerate top line growth.
  • Progress Software (PRGS) was upgraded to buy from hold at Needham.
  • Allergan (AGN) was upgraded to buy from hold at Lazard Capital.
  • Public Service (PEG) was upgraded to buy from hold at Jefferies.

Continue reading Analyst Calls: CIEN, COF, DISH, ED, GME, MOS, POT, TIVO, WEN ...

Southern Co.: Steady Region, Steady Profits

The Southern Co's (SO) stock has broken through key resistance, and that's one reason I'm reiterating my buy rating for the company's shares, first recommended on June 19, 2009 at a price of $30.61.

Further, another reason is SO's Atlanta-based operations: the commercial side of energy use (primarily the industrial segment), will take longer to snap back, but a quicker residential recovery should offset that industrial sluggishness;the greater Atlanta region did not experience as large a residential housing bubble as the West and East coasts, hence the bust was not as severe, from a household formation standpoint. And as the macroeconomic tenet states-- "as household formation goes, so goes revenue." Hence, SO is in a metro area that should fare well in the years ahead.

Continue reading Southern Co.: Steady Region, Steady Profits

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DJIA-89.2312,801.23
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Last updated: February 10, 2012: 06:12 PM

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