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  • GGN: Now Could Be A Good Time To Pick This High Yielder Up [View article]
    ReaperLynx,

    The GABUX blog was from a few years ago, I think. I am not overly pleased with the reverse split and 50% reduction in distribution. However, the reduction will show up as a lower amount of ROC. To say the distribution was unsustainable is an understatement. GABUX just released their annual report and it looks like this - Gross investment income $99 mil; expenses $46 mil; realized gain $34 mil; unrealized gain $191 mil. Total income + appreciation $272 mil. Return of Capital $426 million.

    I am torn between the strategy of GABUX vs the actual performance. 8.9% total return for 2014 vs 28.8% for the S&P Uts Index is hardly acceptable.
    Feb 28, 2015. 08:47 AM | Likes Like |Link to Comment
  • Is It Too Late To Buy Exelon? [View article]
    Lalji,

    Thanks for reading and posting your question. I like offering reasons for my opinion so that readers have not only an understanding of the issues/potential risk/potential reward surrounding their investment selection but information they can update themselves over time. To me, this is the value of article writing.

    Even my monthly newsletter spreadsheet of the 130 companies I follow offers fundamental valuation analysis that makes it easy for subscribers to understand the reasoning behind each rating. These companies are evaluated based on 2016 PEG ratios, dividend yield and earnings yield, broker consensus for timeliness, and S&P Quality Rating.
    Feb 12, 2015. 10:45 PM | Likes Like |Link to Comment
  • Southern Company: Taking A Pass On This Quality Utility Name [View article]
    Add this to the list as well.

    Today, Mississippi Power was ordered to repay ratepayers for charges already collected on the Kemper plant. From the WSJ:

    "Mississippi’s highest court ordered a unit of Southern Co. to return $281 million to customers that the court said had been improperly charged to pay for an unfinished experimental power plant."
    Feb 12, 2015. 07:36 PM | Likes Like |Link to Comment
  • Wall Street Breakfast: Apple's Market Cap Closes Above $700B [View article]
    How about this news? I wish I had seen either of these on Brian Williams' broadcast. May be a bit more believable

    http://bit.ly/1IUVlIJ
    http://bit.ly/1IUVlZ1
    Feb 11, 2015. 02:29 PM | Likes Like |Link to Comment
  • Penn West Could Be Headed Towards CBCA Debt Restructuring If Oil Prices Remain Low [View article]
    http://bit.ly/1CSRsjG

    Mick harp is beyond even Magic Dick. From 1965 "Out of Our Heads" and well worth the next 3:35 of your life.

    Thanks for jogging my ageing memory
    Feb 10, 2015. 09:17 PM | Likes Like |Link to Comment
  • Penn West Could Be Headed Towards CBCA Debt Restructuring If Oil Prices Remain Low [View article]
    Venture,

    I have been watching on the sidelines and am intrigued by the proxy battle between Smith and Kellogg. My concern with Compton purchase was the amount of cap ex needed to just maintain production and offset the production declines, as I had seen the effect of low nat gas prices on a few other small caps such as GMXR. Even way back when, I was a bit uneasy about the opaque nature of Smith, but he seemed to pull rabbits out the air and flowers from his sleeves. I liked the businesses of Terra Nova and KHD, and was willing to oversee the opaque-ness of Smith. I did alright with the various spinoffs. Every now and again, I check on MIL to see what's up, but no re-purchases yet. I wrote a few articles here on SA concerning Smith back in 2011.
    Feb 10, 2015. 01:31 PM | 1 Like Like |Link to Comment
  • Penn West Could Be Headed Towards CBCA Debt Restructuring If Oil Prices Remain Low [View article]
    edward,

    I like your comments on Compton. I was an owner of MFC Industrial (MIL) when Compton was purchased, and sold almost immediately. Michael Smith ventured outside his expertise and I though would get burned. I had owned MIL since it was Terra Nova and KHD. I also was an investor in few unit trusts, like Sun Grow Horticulture - the largest peat moss guy in Canada - and bought Algonquin not long after it converted away from being a unit trust (still own AQUNF). As a US investor, it is important to understand not only the impact of foreign exchange on share prices and dividends but the differing business cultures/laws.
    Feb 10, 2015. 12:41 PM | 1 Like Like |Link to Comment
  • Water Utilities: American Water Works, Aqua America Are The Best Fundamental Selections [View article]
    Blue,

    Desal is an interesting topic that one day will be both cost effective and more widespread. However, first consumers will have to feel the brunt of higher water prices to pay for infrastructure improvements and the higher costs of generating potable water. Almost every region is having water issues that are not reflected in our everyday bill. It is not far fetched that someday see water pipelines similar to natural gas pipelines criss-crossing the countryside.

    I have not found a reasonable company stock to buy with a large exposure to the desal business. I have researched the names and even owned a few for a while, but nothing that I would feel overly comfortable with in my ageing years.
    Feb 10, 2015. 12:22 PM | Likes Like |Link to Comment
  • Water Utilities: American Water Works, Aqua America Are The Best Fundamental Selections [View article]
    Blue and IZZ,

    Many times, DRIP shares are newly issued Treasury shares, in which case there is no "cost" as the proceeds go straight to the company. The pricing will reflect the trading prices for determination of DRIP price and discount, but it does not mean the shares are bought. The prospectus should say if the shares are bought or issued. There sometimes is an SEC filing for a specific number of shares to be used in connection with the DRIP and this SEC filing would cover several year's worth of program shares. Once this allotment has been issued, the company does another SEC filing, and the cycle continues.

    The original concept of DRIPs was for mainly uts to generate additional capital by issuing small amounts of shares every quarter and to increase cash flow as DRIP shares were issued in new shares rather than a cash dividend. DRIPs also allowed the uts to make "secondary" offerings without the expense.

    Many times, plans with a discount use newly issued shares rather than purchasing shares.

    If the DRIP shares are bought in the open market, the answer is correct - the company makes up the difference.

    Hope this helps
    Feb 10, 2015. 12:14 PM | Likes Like |Link to Comment
  • Water Utilities: American Water Works, Aqua America Are The Best Fundamental Selections [View article]
    moat,

    LMT has a patent on Perforene that is a carbon graphite filter that is supposed to use about 100 times less energy for the desalination process. The filter is only one atom thick. However, I figure it will be about 5 yrs. before we hear of a viable commercialization of this technology.

    Thanks for reminding us of this technology as it could be one of those disruptive technology events in the desalinization business.

    http://lmt.co/1chlEZ2
    Feb 8, 2015. 08:16 PM | Likes Like |Link to Comment
  • Water Utilities: American Water Works, Aqua America Are The Best Fundamental Selections [View article]
    niceguy,

    Thanks for reading and posting your kind comments. Glad you found it useful
    Feb 8, 2015. 08:04 PM | Likes Like |Link to Comment
  • Water Utilities: American Water Works, Aqua America Are The Best Fundamental Selections [View article]
    BlueOkie and moat,

    I would look at date specific bond ETFs as a means of having a laddered bond portfolio with low duration - the key in times of rising rates. For example either high yield or corporate Guggenhiem BulletShares.

    Thanks for your comments.
    Feb 8, 2015. 04:42 PM | Likes Like |Link to Comment
  • Water Utilities: American Water Works, Aqua America Are The Best Fundamental Selections [View article]
    white,

    What I meant was no company specific news. I agree that income stocks such as uts and REITs took a drop on Fri, but I stand by my article of July that looked at previous rate cycles and utility performance. The conclusion is that it is falling rates that play havoc with uts, not rising rates. The article looks at rising interest rate cycles of 2004 to 2007, 1993 to 2000, and 1986 to 1989.

    That being said, perception of a potential problem often times becomes the problem.
    http://seekingalpha.co...
    Feb 7, 2015. 07:13 PM | 1 Like Like |Link to Comment
  • Water Utilities: American Water Works, Aqua America Are The Best Fundamental Selections [View article]
    A reader sent me an email pointing out a possible error in one of the tables. In the 3-yr ROIC and 5-yr Total Return table, WTR was listed as a 8.0% ROIC and AWR was listed as a 6.0% ROIC. Farther down, in the Net ROIC table, WTR is listed as 6.0% and AWR as 8.0%.

    Upon checking the raw data, the correct number is WTR generated a 6.0% ROIC and AWR a 8.0% ROIC. The impact on the 5-yr Total Return comparison is slight as they both were on top for both ROIC and 5-yr Returns. They flip the #1 and #3 positions. The NET ROIC table is correct as published. The average positioning in the five tables does change with AWR moving to #1 spot and WTR moving to the #3 spot. This also speaks to BlueOkie's comments of the usefulness of the last table.

    I think the premise of the article is still quite valid - American Water Works, Aqua America, and American States Water are all worthy of further research.

    Richard, thank you very much for bringing this to my attention and I hope this clears up any confusion.

    George Fisher
    Feb 7, 2015. 05:12 PM | Likes Like |Link to Comment
  • Water Utilities: American Water Works, Aqua America Are The Best Fundamental Selections [View article]
    jrs5

    Thanks for reading and posting your insightful comments. There has been an overall decline in ROE allowed and is on the low end of the historic range. Negative perception is what caused the City of Nashua to buy its water utility, Pennichuck. I also agree the values are stretched a bit, and it seems these regulated water uts are on the high side of valuations.
    Feb 7, 2015. 04:38 PM | Likes Like |Link to Comment
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