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  • Exelon: An Unreliable Performing Utility For Investors Or Customers [View article]
    This is the same crap that this "analyst" has be spewing for weeks....WEC is better than EXC yada yada. There is nothing new here. Same old, Same old carping, trying to talk up WEC since he is long on WEC.

    Save your breath. EXC is a bargain now, and it is a strong, competitive, best-in-breed nuclear based fleet in the nation!
    Nov 29 12:48 PM | 8 Likes Like |Link to Comment
  • Protecting Your Income Portfolios In Today's Market: Consider Defensive Utility Stocks [View article]
    Thanks for writing your very detailed analyses of these utilities. I agree that Scana and SO are good choices. They are also investing in building new nuclear plants for base electric load with zero emission generation. As for Con Edison, they have have not upgraded their plants, and are too dependent on the fossil units they own and operate. Con Ed divested the Indian Point Nuclear plants first IP Unit 2 in the mid 1970s selling it for 1 dollar (!!!!!) along with the Astoria 6 oil burning unit to the Power Authority of the State of New York, which was renamed as the New York Power Authoriy in the early 1980's. Unit 3 belonged to NYPA (my icon has a picture I took on the Hudson of the units when I worked there!!) and eventually both IP2 and IP3 were taken over by Entergy.
    Con Ed's infrastructure is abysmal. They really depend on the upstate hydro power produced by the NYPA. The power to NYC public buildings, street lights, subways etc. is covered by a "wheeling" charge or at -busbar- cost pass-through costs to NYPA. This means that Con Ed has no reason to invest in upgrading those electric lines, transformers, etc., and they only fix them if they explode or burn..... If the Obama administration pushes the "Carbon tax" and new EPA limits, Con Ed will be adversely hurt since it is too dependent on fossil generation.
    So Scana and SO, very solid, and Edison is questionable.
    Jun 27 02:41 PM | 7 Likes Like |Link to Comment
  • Exelon 38% Undervalued With A 5.4% Yield Based On Normalized Cash Flow [View article]
    Naive approach and too many errors in your analysis!! Get the yield correct please and recalculate!! Today's yield is 4.6% based on the $27.4 price. Also you need to look at the details about the natural gas consumption/prices in the annual reports and S&P SEC documents. EXC has long term contracts for natural gas and coal for years in advance, so they don't use spot market priced gas or coal.

    Exelon does have some of the characteristics presented but the author has failed to adjust his predictions using the following information:
    1. Exelon management seems to be spastic (I am being diplomatic here!!).
    2. EXC shares are low because of the Constellation buyout, and the purchase has yet to provide any good turn-around benefits.
    3. The EXC dividend has been cut, and may not be increased for at least 5 years, IMHO.
    4. The nuclear plant fleet that EXC has is huge, over a large geographic area, and so it cannot be centrally managed--each plant has its own culture, operations issues, etc. There may be some lessons-learned sharing, central fuel management, safety analyses centers in IL done at the main HQ, but each plant has a separate engineering team that does not interact with other EXC plants.
    5. Many of the nuclear plants that EXC has are older boiling water reactor designs (Dresden, Quad Cities, etc) and will have to make major capital improvements for the NRC-mandated upgrades post Fukishima Daiichi accident, including hardened venting, new piping, valves, etc. Big $$$$
    6. EXC management is NOT really committed to keeping their nuclear plants, see the shutdown of the 2 ZION units in IL as evidence. Those plants could have continued to operate, but....
    7. EXC has focused markets in depressed cities, rural areas that will take a long time to recover--Chicago, Baltimore, etc.
    8. The EXC nukes are base-load plants, built to handle a large electricity demand, that has shrunk down to 1990's levels. See recent EIA/DOE report about the dropping electricity consumption levels, and look at the regional data!! BTW, less electricity consumption is a good thing, brought on by non-incandescent light bulbs, energy star appliances, and folks using notebooks, ipads etc. vs. using desktop computers that are energy-sucking vipers.

    I am long EXC shares, but I bought them years ago at a $10/share cost basis. I considered selling today for tax issues, but why bother? Just hold the shares for another decade or 2. Maybe the management will change and environmental constraints become more helpful for EXC bottom line.

    BTW I have other utilities as well, but others put FE in as a choice utility---I wouldn't buy FE even if you gave me the money!! Worst nuclear operations in US
    Dec 31 04:22 PM | 6 Likes Like |Link to Comment
  • A Novel Way To Value Silver Wheaton [View article]
    Thanks for a well written article, to show how SLW's leveraging really works and how it reflects silver prices but doesn't match or exactly follow the price of Silver.
    Obviously the nay-sayers (asclepius8 above) and others in the SLW bloggosphere still don't get it yet. If you chart silver prices, vs. SLV, vs. SLW you can see that there is a "trend" but not an exact following mode. SLW is not as volatile as silver prices or even gold or rare metal miners stock.
    Dumping stock?? No way. Waiting for a new entry point to buy more. The industrial, jewerly, commodity, demand curves show why this is a more stable, safer investment than GLD, some mining stocks, and SLV and direct silver commodity hedging.
    May 31 10:44 AM | 6 Likes Like |Link to Comment
  • Southern Company - Another Dividend Hike, But Is There Really Much Appeal Besides Dividends? [View article]
    The author and some making comments have made some erroneous remarks that need to be corrected:
    1. Kemper is not the first plant with the technology, but it is a recent plant-build that has had problems, but its cost will be recovered over its long lifetime.
    2. The concept that solar, renewables, etc. could reduce energy consumption by 20-25% is naive, and that the solar installation costs can overcome its inherent inefficient operation is quite unrealistic. This stale mantra has yet to even show a break-even, due to the subsidies, solar inefficient power conversion, high cost for manufacture, upkeep, etc. Even with government credits, installation loans, etc. we have not seen large numbers of households going for solar installations. Even if the installation company services the units, the maintenance costs are high.
    3. The concept that banks or investors will not provide loans for new coal or nuclear plants is not correct. The utilities do not have to go to banks for loans--they become their own bank, issue preferred stocks, debentures, bonds etc. to self-finance projects, thus saving on interest paid to banks!
    4. It is VERY CLEAR that the author does not understand or even read annual reports when he says he hasn't seen the latest balance sheets! His statements about high debt levels, vs. income, cash flow etc. show ignorance about how/why utilities self-finance large projects!
    5. The author states that utility investors take a high risk because Southern for example is a highly regulated utility. Nonsense! It is because SO is highly regulated, there is a strong guarantee that the electricity rates will be charged to meet the true costs of generation, O&M, costs of capital, etc.! There is a guaranteed revenue stream! If SO was non-regulated, perhaps in a merchant generator situation, the cost recovery would be more difficult!
    6. The author compares SO regular stock risk to US Treasuries' risk. Well, let's look at the US Government risk, debt ratio, revenue stream, and the horrible situation the Obama administration has put our economy into--13+ trillion in debt, less than half of the population paying any taxes, more freebies, OBAMA-care etc. --this means that Treasuries and bonds are significantly riskier than any utilities (even FE, EXC, etc.!)
    May 5 12:45 PM | 5 Likes Like |Link to Comment
  • Southern Company's 4.8% Yield May Not Be Sustainable [View article]
    My 2 cents: Somehow the mention of nuclear power is a big risk--but coal plants have more accidents, coal mining incidents maim workers etc. Case in point: The TVA Kingston coal plant ash and "slag" pile erupted over the retaining wall and destroyed homes, contaminated acres of land with the mercury-laden ash, poisoned the river etc. Yet it is never mentioned. See:
    At least with any nuclear power events, the radioactivity decreases over time for the isotopes that produce the highest doses (I-131, I-135, Cs, and others), but mercury does not decrease!
    Aug 27 12:47 PM | 5 Likes Like |Link to Comment
  • 2 Deeply Undervalued Oil And Gas Stocks That Are A Strong Buy, 1 With Huge Downside [View article]
    Caveat Emptor!

    This "contributor" is clueless and has faulty data, poor analysis, and no dogs in the fight. This article is clearly off and should be ignored.
    Jul 19 12:46 PM | 5 Likes Like |Link to Comment
  • 5 High-Dividend Electric Utilities For Strong Income [View article]
    Going for the high dividend levels without looking at the RISK and factors for getting these yields is unwise. HE has to import/transport all of the fossil fuel it burns so the generating costs have fluctuated greatly. No natural gas pipelines there! Other utilities mentioned have not sustained these dividends, and may have to reduce them; see the quick ratio. Their market caps are smaller than most electric utilities on the S&P 500. Incomes are shaky, earnings are variable--warning signs for any conservative, small investor. Before you jump on these trying to catch yields, look for safer bets.
    Apr 18 02:58 PM | 5 Likes Like |Link to Comment
  • Exelon Is A Case Study Of 'Sneaky Dilution' [View article]
    Folks, the main question is WHY EXC bought BGE/Constellation, and why it is buying PEPCO. The BOD is not acting capriciously, or with "anti-shareholder" intent. Also the WHY behind the "dilution" of shares, dividend cut etc. should be asked as well.
    Folks who dumped EXC in 30s, and whine, or complain really have no skin in the game. I am long EXC (bought years ago at 10-15!!) for several reasons:
    1. EXC has the biggest NUCLEAR fleet, and buying into BGE/Constellation they get Calvert Cliffs. They tried to get PSE&G and got shunned. Constellation is low hanging fruit. EXC runs their reactors well, and by having non-fossil generation assets they will not be hurt with the anti-coal crap from EPA and Obama administration.
    2. By getting PEPCO which only distributes power, and doesn't have any generation to speak off allows EXC to have a STRONG guaranteed market, with a pass-through-the-cost, REGULATED market bonus. After the PJM auction mess, making sure that they have a large market to sell their power makes sense!
    3. Even though the dividend was cut, they are still handling the payout ratio, debt creation, well. EXC took its lumps, and all the weak-knee folks bailed out. It is coming back strong.
    4. One respondent commented that EXC is a "growth" stock. Come on now!! It is not a nifty 50 or "growth" stock like a hare or jack rabbit. It is a tortus, plodding along slowly, and will win the race via dividends for those who are patient.

    Other companies, issue new shares or bonds, that dilute earnings per share. OK, utilities usually don't issue new stock, but issue bonds, debentures etc. But by getting the capital by issuing stock, EXC has been able to buy a market.  
    Jun 30 12:34 PM | 4 Likes Like |Link to Comment
  • The New Chowder Rule And How To Find Value In Owner Earnings [View article]
    I hate to tell you this but I think you are simply adding 2 numbers that are not congruent, or matched properly and should NOT be summed!
    Let me be specific:
    First the profit per share (Normalized EBIT Share Value) is a number, and should be unitless if it is normalized properly, namely ($ earnings before taxes)/ $ cost of each share.
    Next, the profit growth per share (OE Growth Rate Number) is a RATE, that means per year and is NOT unitless! So it would have be change in a number (difference in EBIT year over year in $)/($ cost per share)/YEAR.
    So you are adding: Normalized number (no units) + (change in number/year).
    This means your new chowder "number" has mixed units and therefore is meaningless!!
    Jun 26 02:33 PM | 4 Likes Like |Link to Comment
  • Constructing And Designing The Stock Portfolio That's Just Right For You: Part 1 [View article]
    Thank you for your detailed, and very prompt reply! Your answers were very clear, and have helped me understand your approach better.

    Again, it is great to be taught by such a clear, patient, and very thoughtful Professor of Stock and Portfolio Analysis!
    Apr 17 02:00 PM | 4 Likes Like |Link to Comment
  • No Dead-Cat Bounce - A Dead-Serious Warning From Uranium [View article]
    Hanshaw: Beryllium is TOXIC and does not prevent melt down. It is now only used in small research reactors for neutron reflector and not inside the fuel!! Berylium is NOT used in commercial nuclear power plants' fuel anywhere in the world. Just so you know Beryllium has the LOWEST melting point for any metal--that is why it is used in fire sprinkler heads, tapes in quick-action dampers in HVAC etc.

    Uranium/plutonium/thorium fuel with any beryllium would melt down FASTER.......

    The DOE is working on "accident tolerant fuels" where the zirconium alloy tubing used to clad the fuel rods will be replaced by high-strength Silicon Carbide composite tubes. The zircaloy/steam reaction produces hydrogen that is explosive (e.g. Fukushima and TMI events) would be avoided by using advanced Silicon carbide ceramic cladding. Also DOE has made major advances with its TRISO fuel, small three layers coated fuel kernels, that are compacted (glued) with a matrix material to form fuel pellets. The SiC tubing and the TRISO coated with SiC fuel is very accident tolerant and does not produce hydrogen, and can survive extremely high temperatures.

    Beryllium's toxicity is well-known and its use even in research reactors' reflector regions has been reduced....
    Dec 6 01:30 PM | 4 Likes Like |Link to Comment
  • These Nuclear Energy Stocks Could Be Next To Soar Like The Solar Sector [View article]
    Answer and links:

    The USA: 30,000 deaths/yr from coal pollution of 2,000 TWh/yr, or 15 deaths/yr/TWh, a ratio that will likely remain about the same over the years.

    China: 500,000 deaths/yr from coal pollution of 1,800 TWh/yr, or 278 deaths/yr/TWh, a ratio that will likely decline, as China implements safer mining practices and more efficient, cleaner-burning coal power plants over the years.

    Energy Source Mortality Rates; Deaths/yr/TWh

    Coal - world average, 161
    Coal - China, 278
    Coal - USA, 15
    Oil - 36
    Natural Gas - 4
    Biofuel/Biomass - 12
    Peat - 12
    Solar/rooftop - 0.44-0.83
    Wind - 0.15
    Hydro - world, 0.10
    Hydro - world*, 1.4
    Nuclear - 0.04

    * Includes the 170,000 deaths from the failure of the Banquao Reservoir Dam in China in 1975

    Nuclear is the safest power source in the world in terms of fatalities.
    Dec 4 02:22 PM | 4 Likes Like |Link to Comment
  • Coca-Cola: Take Profits As Shares Approach All-Time Highs [View article]
    I agree with Buyandhold. Even if the price sags a little bit for a few years, the KO market will grow, even for sugary soft drinks. The bottled water area will grow as potable water sources are depleted around the world. So investing for the long term makes sense, vs. short term trading!
    Apr 16 05:25 PM | 4 Likes Like |Link to Comment
  • Investing In The Stone Age [View article]
    Thanks for writing your article. I think it is important to point out that the "Average Joe" or Rosa actually think that the financial news media has some sort of inside or advanced knowledge, or expertise that they could never have. The media (CNBC, Jim Cramer) etc. have been saying that buy-and-hold doesn't work anymore, and that investors need to be trading often, spending 1 hr per week for each stock etc. If we remember that the financial news media has to create "news" and a "buzz" every hour, wants to explain every up and down in stocks and the market, then it is easy to discern that most of it is just hype! Since the media focuses on the STOCK prices and not the companies, folks focus on prices vs. the long-term growth of the company.
    Even my stock broker suggests trading more often, even though he is on a fixed fee (% of portfolio) and hates my conservative, value driven, dividend growth, lower beta, buy-and-hold method. But it works.
    Jan 14 10:51 AM | 4 Likes Like |Link to Comment