The Long and the Short of it All
July 15, 2009
We are presenting a list of companies which we believe are currently mispriced, based on our estimate of fair value, by the market. We develop our fair value ranges by projected free cash flow out one year and estimating an appropriate FCF multiple based on our assessment of risk and the strength of the balance sheet.
Cisco Systems [CSCO: 23.82, -0.1101 (-0.46%)] Recent Price $17.04 Value Range 21.86 – $38.41
Cisco Systems, Inc. designs, manufactures and sells Internet protocol (IP)-based networking and other products related to the communications and information technology (IT) industry, and provides services associated with these products and their use. Read more
Stocks For An Economic Recovery – Utilities
May 16, 2009
As the economy begins its comeback, the utilities companies that will benefit the most are the ones whose stock prices have suffered for being located in poor housing markets and those with significant counter-party risk. These companies lack the stability an investor looks for in utilities companies during a time of economic hardship. However, as the economy begins its turn around, these investments will once again become attractive. Read more
Best Stocks of 2009 Review: The First Third
May 10, 2009
More than a third of the year has passed and the markets have rebounded nicely from their lows to turn a small profit on the year. It seems that the worst may be behind us when it comes to equity prices as many stocks have rallied more than 50% this year alone. Here at Bullish Bankers, we published a “Best Stocks of 2009″ newsletter at the beginning of the year, and our equities have performed very admirably when compared to our benchmark, the S&P 500. This article is designed to give a recap of how our equities have performed and give some additional explanation to our initial stock picking process. Through Friday, May 8th, our BB2009 Index has outperformed the S&P 500 by 11.51% on a geometric basis ex-dividend payments. Beside each of the sectors I have listed our three picks and the comparable ETF to show our relative performance on a sector by sector basis. Read more
Revisiting Some Previous Picks
May 4, 2009
The volatility in the markets over the past year has been staggering to say the least. Even during these turbulent times, I was always of the belief that utilities were relatively safe. As a result, I wrote about a few stocks in the past seven months or so that I thought were pretty good plays in the current market situation. For the most part, I was drawn to these stocks because of their potential for growth moving forward, their steady history, and their extremely strong dividends. Although “sure things” do not exist, I was fairly confident in the ability for these stocks to perform well. It has become quite evident that even with strong fundamentals such as those that these stocks possessed there is no guarantee that a stock is going to perform well. I thought that the safe play would be a large cap that boasted a high dividend. This is initially what attracted me to Southern Company [SO: 31.59, +0.09 (+0.29%)] when I first wrote about the company here. On the other hand, I was unsure of how a mid-cap energy stock would perform in the current economy because of volatility. I wrote about one of these, EQT Corporation [EQT: 41.95, -0.58 (-1.36%)], because I thought it looked very appealing, but I was unsure of whether or not it would perform during such a tough time. Looking back, a few months later, these two stocks have had extremely different results that prove my previous beliefs to be wrong. Read more
Five Dividends to Count On
March 20, 2009
As the fallout in the financial markets continues to unwind, a number of companies have bolted down balance sheets and insured some cash flows by cutting their once attractive dividends. In the past month we have seen the likes of General Electric [GE: 15.33, +0.90 (+6.24%)], JP Morgan Chase [JPM: 43.48, -0.39 (-0.89%)], Bank of America [BAC: 15.05, -0.08 (-0.53%)], Pfizer [PFE: 16.96, -0.06 (-0.35%)] and Alcoa [AA: 12.89, 0.00 (0.00%)] cut these coveted yields, proving that this trend has extended into and beyond the financial sector. However, one sector that has maintained its healthy yields has been the utilities sector. While equity prices in the sector have been beaten down with the overall market, there is still a basket of companies that have the means to continue redistributing lucrative cash flows to investors. By no means are all utilities companies safe from dividend cuts, but the types of regulated environments that these companies operate in helps provide secure revenue streams, making payouts more feasible relative to the broader market. The following are five companies with attractive yields that are not going away anytime soon: Read more
Best Utilities Stocks of 2009
February 26, 2009
2008 was truly a year of misery, suppression and depression in the financial markets. No sector held up well, as day after day seemed laden with negative news and panic. The utilities sector, typically seen as a safe haven, was anything but safe losing nearly 30% of its value in 2008. As the sector gears up for 2009, the stocks that should be successful are the ones that have the capacity to stand tall as the economy continues reeling; however, stocks in the utilities space need to maintain the potential to benefit from a turnaround. With that being said, the following are three stocks Read more
Steady Results From Dominion
February 2, 2009
Dominion Resources [D: 35.97, +0.16 (+0.45%)] released fourth-quarter earnings on January 29th before the bell. They announced earnings per share of $0.72 and revenue of $4.17 billion. This is compared to earnings of $0.52 per share and revenue of $
3.65 billion in the same period in 2007. This 14% increase in revenue is substantial and signs of promising things to come for Dominion. Analysts were expecting earnings per share of $0.68 and revenue of $4.03 billion. Dominion reported year end earnings of $3.16 per share compared to $2.56 per share in 2007. However, this is a little misguiding as net income dropped 28% to 1.83 billion. Dominio Read more
Consolidated Edison Fourth Quarter 2008 Earnings
January 24, 2009
Consolidated Edison [ED: 41.53, -0.02 (-0.05%)] reported earnings in the middle of the trading day on Thursday January 22nd. The company reported 4th quarter earnings of $160 million, or $0.58 per share, compared with $207 million, or $0.76 per share in the same period a year ago. Adjusted for one time items, 4Q08 earnings were $0.72 per share compared with $0.71 per share in the prior year. Earnings for 2008 were $1,196 million or $4.38 a share. This compares with $929 million or $3.49 a share in 2007. Earnings from ongoing operations in 2008 were $820 million or $3.00 a share compared with $930 million or $3.50 a share in 2007. Consolidated Edison also declared a quarterly dividend of $0.59, an increase of $0.02 over the previous dividend. Read more
Exelon Up on Down Day
January 23, 2009
Exelon Corporation [EXC: 46.70, -0.45 (-0.95%)], which owns the ComEd utility in Chicago and PECO utility in Pennsylvania, reported fourth quarter earnings for 2008 and provided the markets with some rare positive news on a rough day for the broad
exchanges. The numbers exceeded analyst’s expectations with consolidated earnings, in accordance with GAAP, the last quarter coming in at $707 million, or $1.07 per diluted share, compared with earnings of $562 million, or $0.84 per share, in the fourth quarter of 2007. Reuter’s estimates were projecting $1.03 per share. Full year 2008 consolidated earnings prepared in accordance with GAAP were $2,737 million, or $4.13 per diluted share, compared with $2,736 million, or $4.05 per diluted share in 2007.
Exelon Beats Street, Reaffirms 2009
January 23, 2009
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Before the bell today, Exelon Corporation [EXC: 46.70, -0.45 (-0.95%)], the largest United States utility company by market cap, reported fourth quarter 2008 earnings. For the quarter, the company earned a net income figure of $707 million, or $ 1.07 a share compared to $0.84 a share on net income of $562 million a year ago. This was a 26% increase. The consensus analysts’ estimate was $1.04 a share. On a full year adjusted basis, revenue dipped to $2.78 billion or $4.20 a share from $2.92 billion or $4.32 a share a year ago. The results were well within the company’s original full year guidance of $4.00 – $4.40 a share and comfortably in Exelon’s September adjusted guidance of $4.15 – $4.30 a share. Read more
