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>>> Xylem Inc. engages in the design, manufacture, and servicing of engineered products and solutions for the water and wastewater applications. It operates in three segments: Water Infrastructure, Applied Water, and Measurement & Control Solutions. The Water Infrastructure segment offers various products, including water and wastewater pumps; controls and systems; filtration, disinfection, and biological treatment equipment; and mobile dewatering equipment under the Flygt, Godwin, Wedeco, Sanitaire, and Leopold names for the transportation and treatment of water. The Applied Water segment provides pumps, valves, heat exchangers, controls, and dispensing equipment systems under the Goulds Water Technology, Bell & Gossett, A-C Fire Pump, Standard Xchange, Lowara, Jabsco, and Flojet brand names for residential and commercial building services, and industrial water applications. The Measurement & Control Solutions segment provides smart metering, networked communications, and measurement and control technologies, as well as critical infrastructure technologies that allow customers to use their distribution networks for the delivery, monitoring, and control of critical resources, such as water, electricity, and natural gas. It also offers software and services, including cloud-based analytics, remote monitoring, data management, leak detection, and pressure monitoring solutions and testing equipment, as well as sells smart lighting solutions. This segment sells its products under the EmNet, Pure, Sensus, Smith Blair, Valor Water, Visenti, WTW, and YSI brand names. The company markets and sells its products through a network of direct sales force, resellers, distributors, and value-added solution providers in the United States, Europe, the Asia Pacific, and internationally. Xylem Inc. is headquartered in Rye Brook, New York.
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>>> PG&E Shows Utility Stocks Aren’t Boring Anymore
Industry disruptions may be changing investors’ ideas of the risks.
Bloomberg
January 28, 2019
https://www.bloomberg.com/news/articles/2019-01-28/pg-e-shows-utility-stocks-aren-t-boring-anymore?srnd=premium
It wasn’t so long ago that investors saw utilities as safe, boring, and modestly profitable. With dependable revenue from monthly electric bills and regular dividends, they were a favorite among penny-saving retirees and portfolio managers wanting to hedge against volatility in the broader market.
That was then. Things first began to change with the deregulation of the 1990s, but global warming and rooftop solar panels have also been steadily chipping away at the notion that the sector is a safe haven. And now there’s PG&E Corp. California’s largest utility owner plans to file for Chapter 11 as early as Jan. 29 in the face of as much as $30 billion in potential liabilities from wildfires that killed more than 100 people in 2017 and 2018.
“It has absolutely become more complicated to invest in utilities,” says Jan Vrins, head of the energy practice at Navigant Consulting Inc. “The energy transformation is accelerating.” For a start, utilities are having to figure out how to navigate the rise of renewable energy sources. Utilities that invested heavily in giant nuclear and coal plants have found themselves saddled with mounting costs from generating facilities that are struggling to compete against cheap natural gas and wind and solar farms that have seen costs plunge. A wrong bet by a utility can be its undoing. Scana Corp., South Carolina’s largest utility, spent nine years working to expand a nuclear plant before pulling the plug in 2017, when projected costs ballooned to more than $20 billion. Its shares plummeted, and it was acquired by Dominion Energy Inc. this year.
And utilities that embraced solar and wind energy early have benefited, says Jay Rhame, chief executive officer at Reaves Asset Management, which has $2.8 billion under management. Look no further than NextEra Energy Inc., the largest U.S. provider of renewable energy. Its shares have doubled in value since 2014. “A lot of utilities are now trying to get into renewables after seeing NextEra’s success,” says Rhame.
The traditional utility business model is also facing competition from some of its own customers, who are generating their own power by putting solar panels on their roofs. Total U.S. residential power installed is forecast to reach 20 gigawatts next year, according to Bloomberg NEF, more than triple the amount at the end of 2015. (For comparison, a typical nuclear reactor has about 1 gigawatt of capacity.) That, along with energy-efficiency improvements and smarter homes, has sapped many utilities of a traditional source of growth: delivering more power.
Global warming is literally changing the landscape for utilities, with hotter summers making wildfires more common. And in states such as California, where strict liability laws mean power companies can be held responsible for fire damages, that means much more financial risk. PG&E has explicitly blamed its downfall on climate change after the state’s bone-dry hillsides were ravaged by fires in 2017 and 2018. Investigators have cited the company’s equipment as the ignition source of 17 blazes in 2017, though it was cleared last week in that year’s most deadly blaze. PG&E equipment remains under investigation for the 2018 Camp Fire, which killed 86 people.
Still, there’s a climate upside for some utilities. A warmer-than-normal summer last year led to increased air conditioner use, boosting earnings at companies that include Duke Energy Corp., FirstEnergy Corp., and American Electric Power Co. Stronger, more destructive hurricanes have led some power providers to increase spending on transmission lines and grid-hardening technology. Regulators give them a guaranteed return on such investments. It’s a back-to-basics strategy that many investors applaud.
“Infrastructure investment is the key theme here,’’ says Tim Winter, associate portfolio manager for the Gabelli Utilities Fund. “Utilities in general, they are as safe if not safer than they’ve ever been.” Low natural gas prices have helped keep fuel costs down, allowing utilities to avoid hitting customers with big rate increases. Winter sees the sector posting average annual earnings growth of 5 percent to 6 percent through 2021, compared with the 3 percent to 4 percent utilities have typically earned in the past.
The safest utility investments are those that own only own poles and wires, not power plants, says Michael Weinstein, a utility analyst at Credit Suisse Group AG. In the 1990s, regulators in some states made generating power and delivering it to customers into separate businesses. Companies that had long enjoyed monopolies now had to compete for revenue. Many utilities got burned in the process, making them seem risky for traditional investors. Weinstein says companies that have stuck to running the power grids still benefit from predictable returns. “A lot of investors want the pure-play utility,” he says. “The less complicated the better.”
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>>> Middlesex Water Company, together with its subsidiaries, owns and operates regulated water utility and wastewater systems. It operates in two segments, Regulated and Non-Regulated. The Regulated segment engages in collecting, treating, and distributing water on a retail and wholesale basis to residential, commercial, industrial, and fire protection customers in parts of New Jersey, Delaware, and Pennsylvania. This segment also includes regulated wastewater systems in New Jersey and Delaware. The Non-Regulated segment provides non-regulated contract services for the operation and maintenance of municipal and private water and wastewater systems in New Jersey and Delaware. Middlesex Water Company was founded in 1897 and is headquartered in Iselin, New Jersey. <<<
>>> Why Allete (ALE) is a Great Dividend Stock Right Now
Zacks Equity Research
October 11, 2018
https://finance.yahoo.com/news/why-allete-ale-great-dividend-131501393.html
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Allete in Focus
Headquartered in Duluth, Allete (ALE) is a Utilities stock that has seen a price change of 4.09% so far this year. The power company owner is paying out a dividend of $0.56 per share at the moment, with a dividend yield of 2.89% compared to the Utility - Electric Power industry's yield of 3.24% and the S&P 500's yield of 1.88%.
Looking at dividend growth, the company's current annualized dividend of $2.24 is up 4.7% from last year. Over the last 5 years, Allete has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.26%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Allete's payout ratio is 69%, which means it paid out 69% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ALE for this fiscal year. The Zacks Consensus Estimate for 2018 is $3.35 per share, with earnings expected to increase 5.02% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that ALE is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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>>> Utilities New Jersey Resources, South Jersey Industries Hold Merger Talks
Rising revenue has fueled takeover interest in natural-gas producers
By Dana Mattioli and Dana Cimilluca
April 4, 2017
https://www.wsj.com/articles/utilities-new-jersey-resources-south-jersey-industries-hold-merger-talks-1491322741
New Jersey Resources Corp. NJR -0.33% is considering a combination with South Jersey Industries Inc., SJI 0.15% a deal that would bring together two natural-gas utilities in the state, according to people familiar with the matter.
Details of the talks couldn’t be learned and it is possible that there won’t be a deal. As of Tuesday morning, New Jersey Resources had a market value of $3.4 billion. South Jersey Industries was valued at $2.8 billion.
New Jersey Resources, based in Wall, N.J., provides natural gas and other services to homes and businesses from the Gulf Coast to Canada, according to its website. It is the parent company of New Jersey Natural Gas, which serves more than 486,000 customers in Monmouth, Ocean, Middlesex, Morris and Burlington counties. New Jersey Resources also operates a 6,700 mile natural-gas transportation and distribution network serving almost 500,000 customers, according to the website.
South Jersey Industries, based in Folsom, N.J., traces its roots back more than 100 years to two Atlantic City gas companies. It provides natural gas to about 377,000 customers in the southern part of the state, according to the company’s website.
Rising revenue has fueled takeover interest in natural-gas producers and there has been a flurry of deal making over the past year. In January, Canada’s AltaGas Ltd. agreed to buy WGL Holdings Inc., Washington, D.C.’s natural-gas utility. NextEra Energy Inc. has agreed to buy bankrupt Energy Future Holdings Corp.’s Oncor electricity-transmission unit, one of the largest such businesses in the country, but Texas regulators have moved to block the deal.
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>>> Connecticut Water Service, Inc. is a non-operating holding company. The Company's income is derived from the earnings of its subsidiary companies, including The Connecticut Water Company (Connecticut Water), The Maine Water Company (Maine Water), New England Water Utility Services, Inc. (NEWUS),The Avon Water Company (AWC) and Chester Realty Company (Chester Realty). It operates through three segments: Water Operations, Real Estate Transactions, and Services and Rentals. The Water Activities segment consists of its regulated water activities to supply public drinking water to customers. The Real Estate Transactions segment involves the sale or donation for income tax benefits of its real estate holdings. Services and Rentals segment provides contracted services to water and wastewater utilities and other clients, and also leases certain of the Company's properties to third parties through unregulated companies in the State of Connecticut and through Maine Water in the State of Maine. <<<
>>> American States Water Co. is a holding company, which engages in the purchase, production, distribution, and sale of water. It operates through the following segments: Water, Electric, and Contracted Services. The company was founded on December 1, 1929 and is headquartered in San Dimas, CA. <<<
>>> American Water Works Co. (AWK), the largest publicly traded U.S. water utility, boosted third-quarter profit after completing four acquisitions.
Net income from continuing operations gained 4.5 percent to $156.6 million, or 87 cents a share, compared with a year ago, the Voorhees, New Jersey-based company said today in a statement. Revenue increased 2.9 percent to $846.2 million.
American Water added about 2,200 customers through its four acquisitions in the quarter and received the company’s 11th military base contract, according to the statement.
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http://www.bloomberg.com/news/2014-11-06/american-water-quarterly-income-advances-with-four-acquisitions.html?cmpid=yhoo
>>>The Southern Company (SO)
https://www.thestreet.com/story/13646215/4/10-best-dividend-stocks-to-own-now-for-a-safe-retirement.html
A safe retirement entails knowing there will be money coming in like clockwork, and the utilities sector is one of the best sectors for dividend income because these companies are so predictable.
All the better if the utility serves a growing population with a diverse array of energy resources. That is where The Southern Company stands out. The energy sources are diverse with 33 hydroelectric and 32 fossil fuel generating plants, 16 solar farms, and 1 each wind, biomass and landfill. They are the largest utility serving the vibrant states of Alabama, Georgia, Florida and Mississippi. These are areas where retirees are migrating.
The Federal Energy Regulatory Commission (FERC) regulates the sale and prices of energy sold between Southern Company and other utilities. The right to operate a utility within its service market and the prices charged are regulated the various Public Service Commissions in each state.
Alternative sources like solar and wind supplied by other, non-regulated entities give customers a choice of supply. Thus far there have been enough cost advantages to create a meaningful threat. Rather, companies like The Southern Company has bought or built sources of alternative energy.
Southern Company has paid dividends continuously since 1948, a record that qualifies the company as one of the most reliable dividend-paying stocks in the market. Over the past decade, dividends have grown at a 3.6% average annual rate and 3.1% over the past five.
Effective May 12, the annual payout was raised 6.6% to $2.24 per share. The payout ratio for 2015 was 83% but will drop to 79% based on consensus estimates for 2016 per share profits. A record $7 billion in capital spending in 2015 shows there are good opportunities to invest capital and once this pays off the company's 2.2% historic rate of earnings according to consensus estimates will tick up to 3.3% with dividend growth very likely to match.
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>>> South Jersey Industries, Inc., through its subsidiaries, provides energy-related products and services. It engages in the purchase, transmission, and sale of natural gas. The company also sells natural gas and pipeline transportation capacity on a wholesale basis to residential, commercial, and industrial customers on the interstate pipeline system, as well as transports natural gas purchased directly from producers or suppliers to their customers. As of December 31, 2015, it had approximately 122.7 miles of mains in the transmission system and 6,503 miles of mains in the distribution system; and served 373,100 residential, commercial, and industrial customers in southern New Jersey. In addition, the company develops, owns, and operates energy projects, such as thermal facilities, combined heat and power facilities, landfill gas-fired electric production facilities, and solar projects that provide cooling, heating, and emergency power. Further, it markets natural gas storage, commodity, and transportation assets on a wholesale basis for energy marketers, electric and gas utilities, power plants, and natural gas producers in the mid-Atlantic, Appalachian, and southern regions of the United States. Additionally, the company acquires and markets natural gas and electricity to retail end users, as well as markets total energy management services; owns oil, gas, and mineral rights in the Marcellus Shale region of Pennsylvania; and services residential and small commercial HVAC systems, and installs small commercial HVAC systems, as well as provides plumbing services and services appliances. South Jersey Industries, Inc. was founded in 1910 and is based in Folsom, New Jersey. <<<
>>> Eversource Energy
http://www.thestreet.com/story/13405610/3/3-high-dividend-utility-stocks-that-will-prosper-despite-rising-interest-rates.html
Eversource Energy is another diversified utility stock. It trades at 16.3 times forward earnings and offers a dividend yield of 3.34%. The company has grown dividend payouts by 8.7% compounded annually (CAGR) between 2011 and 2015 (2015 payout is $1.67 a share and in 2011 it was $1.10).
After growing EPS by 9%-to-10% for the 2013 and 2014 fiscal years, the number clocks in over 6% in the fiscal year, 2016.
Between 2010 and 2014, Eversource out-performed the regulated electric stocks every year and it's proved to be a better wealth protector in the 2015 YTD with it shares reflecting a loss of 2.46% as against a loss of 5.11% for its peer set (on a total returns basis).
The company has an impressive reach with over three million electric and natural gas customers in Connecticut, Massachusetts and New Hampshire. Over 4,200 miles of electric transmission lines, 72,000 miles of electric distribution lines and 6,500 miles of natural gas distribution lines gives it a wide area of operations.
Here are three reasons to buy the stock: 1) The company has projected a long-term EPS growth of 6%-to-8%; 2) The management is confident of its ability to reduce operations and maintenance costs by an average of 3% annually through 2018; and 3) It possesses the only "A" credit rating in the industry.
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>>> Xcel Energy Inc., through its subsidiaries, engages primarily in the generation, purchase, transmission, distribution, and sale of electricity in the United States. It operates through Regulated Electric Utility, Regulated Natural Gas Utility, and All Other segments. The company generates electricity using coal, nuclear, natural gas, hydro, solar, biomass, oil and refuse, and wind energy sources. It is also involved in the purchase, transportation, distribution, and sale of natural gas. In addition, the company engages in developing and leasing natural gas pipelines, and storage and compression facilities; and investing in rental housing projects. It serves residential, commercial, and industrial customers, as well as public authorities in the portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. Xcel Energy Inc. was founded in 1909 and is based in Minneapolis, Minnesota. <<<
>>> American States Water Company, together with its subsidiaries, provides water, electric, and contracted services in the United States. It operates in three segments: Water, Electric, and Contracted Services. The company purchases, produces, and distributes water in 75 communities in 10 counties in the State of California; and provides electric service to the City of Big Bear Lake and surrounding areas in San Bernardino County, California. As of December 31, 2013, it served 257,102 water customers and 23,615 electric customers. The company also provides water and/or wastewater services, including the operation, maintenance, renewal, and replacement of the water and/or wastewater systems at various military installations. American States Water Company was founded in 1929 and is headquartered in San Dimas, California. <<<
>>> American Water Works Co. (AWK), the largest publicly traded U.S. water utility, boosted third-quarter profit after completing four acquisitions.
Net income from continuing operations gained 4.5 percent to $156.6 million, or 87 cents a share, compared with a year ago, the Voorhees, New Jersey-based company said today in a statement. Revenue increased 2.9 percent to $846.2 million.
American Water added about 2,200 customers through its four acquisitions in the quarter and received the company’s 11th military base contract, according to the statement.
<<<
http://www.bloomberg.com/news/2014-11-06/american-water-quarterly-income-advances-with-four-acquisitions.html?cmpid=yhoo
>>> American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States and Canada. The company?s Regulated Businesses segment offers water and wastewater services to approximately 1,500 communities in 16 states. It operates approximately 80 surface water treatment plants; 500 groundwater treatment plants; 1,000 groundwater wells; 100 wastewater treatment facilities; 1,200 treated water storage facilities; 1,300 pumping stations; 87 dams; and 47,000 miles of mains and collection pipes. This segment serves residential customers; commercial customers, such as shops and businesses; industrial customers, including manufacturing and production operations; public authorities, which comprise government buildings and other public sector facilities; and other water utilities, as well as supplies water to public fire hydrants for firefighting purposes, and private fire customers for use in fire suppression systems in office buildings and other facilities. Its Market-Based Operations segment undertakes contracts to design, build, operate, and maintain water and wastewater facilities for the United States military, municipalities, the food and beverage industry, and other customers; provides services to homeowners and smaller commercial establishments to protect against the cost of repairing broken or leaking water pipes, and clogged or blocked sewer pipes inside and outside their accommodations; and offers biosolids management, transport, and disposal services to municipal and industrial customers, as well as products for cleansing water and wastewater, and wastewater residuals management services. American Water Works Company, Inc. serves approximately 14 million people with drinking water, wastewater, and other water-related services in approximately 40 states and 2 Canadian provinces. The company was founded in 1886 and is headquartered in Voorhees, New Jersey. <<<
>>> New Jersey Resources Corporation, an energy services holding company, provides retail and wholesale natural gas energy services. The company operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Midstream. The Natural Gas Distribution segment offers natural gas service to residential and commercial customers in central and northern New Jersey; and participates in the off-system sales and capacity release markets. The Clean Energy Ventures segment invests, owns, and operates renewable energy projects comprising commercial and residential solar projects, and on-shore wind investments projects. The Energy Services segment maintains and transacts a portfolio of natural gas storage and transportation positions; and provides wholesale energy and energy management services. The Midstream segment invests in natural gas transportation and storage facilities. The company also provides heating, ventilation, and cooling services, as well as solar installation services; holds and develops commercial real estate properties; and provides plumbing repair and installation services. New Jersey Resources Corporation was founded in 1922 and is based in Wall, New Jersey. <<<
Good afternoon Utility Sector Ideas looking for a strong hour of power!
>>> Can New Jersey Resources (NJR) Continue to Surge?
By Zacks Equity Research
April 2, 2014
https://finance.yahoo.com/news/jersey-resources-njr-continue-surge-104535256.html
One company that should be on your radar is New Jersey Resources Corp. (NJR). The stock of this Gas Distribution company has seen its Zacks Rank surge over the past four weeks, moving from Sell territory to its current position as a Buy.
A key reason for this move has been the positive trend in the earnings estimate revisions picture. For NJR’s full year estimate, we have seen 3 estimates go higher in the past 30 days, compared to no lower. This trend has helped the consensus estimate to trend higher, going from $2.87 a share a month ago to its current level at $3.99.
This positive shift in estimates has made some investors take notice and buy the stock. In fact, NJR has seen some pretty solid trading lately, as the company has moved higher by 12.1% in the past month.
If New Jersey Resources can keep up this great momentum on the earnings estimate front and continue to impress analysts, we could see more gains ahead for this company, suggesting that you might want to put NJR on your watch list for the future.
Other top-ranked stocks worth considering in this space include Delta Natural Gas Company, Inc. (DGAS), Atmos Energy Corporation (ATO) and Piedmont Natural Gas Co. Inc. (PNY). While Delta Natural holds a Zacks Rank #1 (Strong Buy), Atmos and Piedmont carry a Zacks Rank #2 (Buy).
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Wisconsin Energy -- >>> Buffett's Hunt for Power Sets Wisconsin Energy in His Sights: Real M&A
Bloomberg
By Tara Lachapelle and Mark Chediak
March 4, 2014
http://finance.yahoo.com/news/buffetts-hunt-power-sets-wisconsin-151811767.html
Warren Buffett's drive for power is far from over.
Buffett signaled in his latest annual letter to shareholders that Berkshire Hathaway Inc.'s MidAmerican Energy Holdings Co. (BRK/A) has the appetite for another "major" acquisition after paying more than $5 billion last year for an electricity provider in Nevada. Utilities that meet Buffett's takeover criteria include Wisconsin Energy Corp. (WEC), a $9.8 billion company with a return on equity of 14 percent in 2013, and Alliant Energy Corp. (LNT), according to data compiled by Bloomberg.
"He wants to be offered utility assets" and his remarks may increase deal flow, said Richard Cook, co-founder of Cook & Bynum Capital Management LLC in Birmingham, Alabama, without naming possible targets. If he sees one that fits with existing operations, is priced attractively and offers better than 10 percent returns, "he's probably willing to buy," said Cook, whose firm owns Berkshire shares.
Wisconsin Energy has a well-respected management team -- a trait Buffett prefers -- and that utility and Alliant operate in states with favorable regulatory environments, Gabelli & Co. said. Alliant is also expanding into renewable energy, which Buffett signaled could be a focus for large investments, according to Morningstar Inc. Pipeline master-limited partnerships such as Plains All American Pipeline LP (PAA) also would appeal to Buffett, Robert W. Baird & Co. said.
Brian Manthey, a spokesman for Wisconsin Energy, and Scott Reigstad, a spokesman for Alliant, said the companies don't comment on takeover speculation.
MidAmerican, which generated about $1.8 billion of pre-tax profit last year, is among Omaha, Nebraska-based Berkshire's dozens of non-insurance businesses. In December, the unit completed its purchase of NV Energy Inc., the largest electricity provider in Nevada. Including net debt, the transaction was valued at more than $10 billion, data compiled by Bloomberg show.
NV Energy "will not be MidAmerican's last major acquisition," Buffett, 83, wrote in his annual letter to Berkshire shareholders posted on the company's website March 1.
Buffett said he's "eager to hear" from companies that meet his usual criteria. He prefers "simple" businesses with at least $75 million of pre-tax income, "consistent" earnings power and "good" returns on equity while employing little or no debt. He also prefers to keep management in place.
Stable Business
There are 19 utility and pipeline owners with market values from $5 billion to $30 billion that meet the minimum profit requirement and have a return on equity exceeding 10 percent, data compiled by Bloomberg show.
Utilities are typically "predictable, stable and modestly growing," Timothy Winter, an analyst at Gabelli, said in a phone interview. "It's a business where, if you prudently invest capital in the business, you can earn a 10 to 11 percent return on your investment."
Wisconsin Energy is among the utilities that may appeal to Buffett, Winter said. The provider of electricity and natural gas to Wisconsin and Michigan residents earned about $915 million before taxes last year, the data show.
Wisconsin Energy has "an exceptional management team," Winter said. And from a regulatory standpoint, Wisconsin and Michigan are "good states to be in."
Regulatory Climate
State regulators set allowed earnings at gas and electricity providers, and some states are more favorable to the utilities than others, he said. Gabelli is a unit of Gamco Investors Inc. in Rye, New York.
Alliant, valued at $5.9 billion yesterday, and $4.4 billion Westar Energy Inc. (WR) also could be appealing targets for Buffett, Mark Barnett, an analyst for Morningstar, said in a phone interview.
Alliant, which had a 10.4 percent return on equity, distributes electricity and natural gas to 1.4 million homes and businesses in Iowa, Minnesota and Wisconsin. Westar, based in Topeka, Kansas, has about 700,000 customers. Gina Penzig, a spokeswoman for Westar, said the company doesn't comment on speculation.
Both have solid leadership teams, offer the potential for high growth and require capital investments, Barnett said. Westar is in the midst of one of the largest capital-investment programs relative to its size in the U.S., with plans to spend $3.4 billion from 2014 to 2018 on generation and power lines, according to Morningstar and company filings.
‘Incredible Advantage'
Buffett "is likely looking at a lot of small, regulated utilities that have a lot of growth on the table where his low cost of capital is an incredible advantage," Barnett said. These companies "fit the bill."
Today, Wisconsin Energy shares gained 1.8 percent to $44.22, the highest since May. Alliant rose 1.5 percent to a record $54.29 and Westar climbed 1.1 percent to $34.49.
Pipeline businesses also may appeal to Buffett because they typically provide stable streams of cash flow and an attractive return on investment, said Andy Pusateri, an analyst at Edward Jones & Co. in St. Louis. A target could be an MLP because many pipelines have taken on that structure, he said.
MLPs don't pay federal income taxes and distribute most of their cash to owners of their units, which trade like shares in a corporation.
"High-quality MLPs would certainly make good targets," Ethan Bellamy, a Denver-based analyst for Robert W. Baird, said in an e-mail. "How much more potent could one of these firms be if they had the backing of a giant free-cash-flow machine and no requirement to time project developments in order to pay stable distributions to investors?"
Good Value
MarkWest Energy Partners LP (MWE), valued at $11 billion yesterday, and Plains All American, at $19 billion, are two MLPs that stand out, Bellamy said.
"You would be hard pressed to find a firm that could produce more value relative to its footprint if given a blank checkbook than MarkWest," he said. As for Plains, "if Buffett wanted to own the single best management team in the single best segment of MLPs, this would be it."
MarkWest processes and transports natural gas from U.S. shale basins including the Marcellus and Utica. Plains transports crude oil and natural gas liquids.
Representatives for Plains and MarkWest didn't immediately respond to phone calls or e-mails seeking comment.
Pricey Valuations
Today, Plains shares fell 1 cent to $54.36, and MarkWest climbed 1.7 percent to $65.27.
Most MLPs are trading at pricey valuations, which may deter Buffett, according to Bradley Olsen, a Houston-based analyst at Tudor Pickering Holt & Co. It's also more difficult for MidAmerican to aggressively bid for an MLP company, versus a competing suitor that's also an MLP, he said. Berkshire said in its annual report that it doesn't participate in deal auctions.
"You don't have that same financing vehicle logic inside of a large company like Berkshire Hathaway," Olsen said in a phone interview. "MidAmerican's pipelines are kind of buried inside of an overall stable utility business."
What makes utilities particularly attractive for Berkshire is the opportunity to reinvest earnings, Winter of Gabelli said. Utilities pay 60 percent to 70 percent of their earnings in the form of dividends, he said, whereas Buffett's letter said MidAmerican retained more dollars of earnings than any other U.S. electricity provider.
"If Berkshire owns these themselves, they don't have to pay the dividend and the cash flow can be reinvested back into the business," Winter said.
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>>> Wave of Coal Retirements Coming by 2016
Joao Peixe
February 17, 2014
http://wallstcheatsheet.com/business/stock-news/wave-of-coal-retirements-coming-by-2016.html/?ref=YF
There will be many more closures of coal-fired power plants around the country over the next two years than has been announced thus far, according to the Energy Information Administration. As of December 2013, data from power plant companies that reported their plans to the EIA over the next few years suggest that utilities will close 40 gigawatts of coal capacity by 2016. A mix of low electricity demand, low natural gas prices, and environmental regulations are forcing coal plants out of the market.
However, the EIA projects in its Annual Energy Outlook 2014 that coal retirements will be much higher than what power companies are reporting. EIA predicts that around 60 GW of coal capacity will be shuttered by 2020, which would account for about one-fifth of the existing 310 GW of coal-fired capacity. But about 90 percent of those retirements would come before 2016 because new limits on mercury take effect in 2015 (with a possible one-year extension allowed), which will require power plant operators to install equipment to limit emissions of mercury, acid gases, and toxic metals. This pollution control technology is too expensive in many cases, forcing operators to shut the plants down instead.
Utilities have already shut down many coal plants in recent years. For example, in 2012 alone, 85 generating units accounting for 10.2 GW of power were closed. However, plants that closed in the past were much older, smaller, and less efficient. The average size of a coal plant that closed between 2010 and 2012 was only 97 megawatts. Over the next 10 years, the average size of closed plants will be about 145 megawatts. This merely demonstrates that as environmental regulations bite in the coming years, they will begin to cut more into the core of the nation’s coal fleet.
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>>> PowerShares Global Water (PIO) -
Holdings -
Roper Industries, Inc. Common S
ROP
8.39
Pentair, Ltd. Registered Share
PNR
8.31
Flowserve Corporation Common St
FLS
8.08
VEOLIA ENVIRONN.
VIE.PA
7.68
United Utilities Group PLC
UUGWF.L
6.99
Waters Corporation Common Stock
WAT
4.34
American Water Works Company, I
AWK
4.33
SUEZ ENV. CPY
SEV.PA
4.21
Geberit AG
GEBN
4.18
KURITA WATER INDS LT
KTWIF
4.06
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American Water Works -- >>> The Basic Needs Portfolio
By Sean Williams
November 11, 2013
http://www.fool.com/investing/general/2013/11/11/the-basic-needs-portfolio.aspx
-In May, I announced my intention to create a portfolio that embodied life's basic needs. To that end, over a period of 10 weeks I detailed 10 diverse companies that I think will outperform the broad-based S&P 500 over a three-year period because of their ability to outperform in both bull and bear markets, as well as command incredible pricing power in nearly any economic environment.
If you'd like a closer look at my reasoning behind each selection, just click on any, or all, of the following portfolio components:
•Waste Management
•Intel
•NextEra Energy
•MasterCard
•Chevron
•Select Medical
•Ford
•American Water Works
•Procter & Gamble
•AvalonBay Communities
With the majority of earnings reports out of the way, we once again turned our attention to dividends within the Basic Needs Portfolio -- but not before one last quarterly report.
Let the good times flow
Water utility giant American Water Works (NYSE: AWK ) was the lone company within the portfolio to report third-quarter results last week. For the quarter, American Water delivered a 2.2% decline in net income to $150.7 million, or an adjusted $0.84 per share, as cooler-than-expected weather negatively affected water usage. The $0.84 per-share profit was a penny shy of estimates. American Water boosted the low end of its guidance for the full year but chopped a bit off the top to a new range of $2.17-$2.22. One thing to keep in mind, though, is that American Water Works' costs remain very much under control and water demand, even with a reported negative weather effect of $0.03-$0.06 through the first nine months, is relatively consistent, so there's no reason to believe the utility won't keep churning out steady profits.
Dividends, dividends, dividends
As I mentioned above, the big news this week was the receipt of one dividend payment and two other stocks going ex-dividend, signaling that payouts are right around the corner.
Although it's somewhat laughable given MasterCard's (NYSE: MA ) gigantic share price, last week we collected our $0.60 per-share quarterly dividend from the credit payment facilitator (NYSE: MA ) . MasterCard is, without question, the weakest-yielding stock of this bunch, but it also has the most promise for growth, given that the majority of overseas markets still rely on cash for transactions. With $6 billion in cash, no debt, and a minuscule payout ratio of 8% -- and with rival Visa having recently boosted its dividend -- MasterCard has the potential to easily double its dividend (or more) from here.
In addition to receiving our quarterly stipend from MasterCard, we saw Select Medical (NYSE: SEM ) and Intel (NASDAQ: INTC ) go ex-dividend this week.
Hospital and outpatient rehabilitation center operator Select Medical remains this portfolio's highest-yielding company at 4.8%. It is set to pay a $0.10 dividend on Nov. 22 to shareholders of record as of Nov. 12. Select Medical has a lot riding on the success of Obamacare, given that more people with insurance should help lower its uncollectable revenue. That would make its dividend even more sustainable.
Intel is primed to pay a quarterly stipend of $0.225 on Dec. 1 for shareholders of record as of Nov. 7. Intel has been mired in a bit of a struggle for the past year as PC sales have slumped in favor of mobile devices like smartphones and tablets. Although Intel has been investing heavily in research and development of cloud and mobile-based processors, which has certainly stymied earnings growth in the interim, its still-strong free cash flow should continue to fuel its very attractive 3.7% yield.
The China surge
In the automotive sector, Ford (NYSE: F ) donned its cape and did its best Superman impression by reporting a 55% increase in wholesale auto sales in China for October to 93,969 units. For the year, Ford has now increased sales in China by 52%, and it's well on the way to meeting its goal of 5% market share in the rapidly growing overseas market, perhaps by the end of this year. Ford's improving fuel economy, mixed with fresh styling and reasonable pricing, should keep fueling its results. I would estimate it may lead to market share of nearly 10% before 2016 if this trend continues.
Back to basics
It was another rather ho-hum week for the Basic Needs Portfolio, with these generally low-beta stocks losing ground to the S&P 500. Let's keep in mind that ex-dividends did play a small role in the week's underperformance, but we can also expect a nice bevy of dividends to roll in over the next four weeks from a number of companies as a result. This portfolio is ultimately primed to deliver incredible cash flow in any economic environment, and I'm convinced that this group of companies will handily outperform the S&P 500 when we look back three years from now.
Check back next week for the latest update on this portfolio and its 10 components.
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American Water Works -- >>> The Basic Needs Portfolio
By Sean Williams
September 16, 2013
http://www.fool.com/investing/general/2013/09/16/the-basic-needs-portfolio.aspx
In May, I announced my intention to create a portfolio that embodied life's basic needs. Understandably, many of the truly basic needs in our everyday lives have transcended far beyond just the need for water and shelter. To that end, over a period of 10 weeks I detailed 10 diverse companies that I think will outperform the broad-based S&P 500 over a three-year period because of their ability to outperform in both bull and bear markets, and command incredible pricing power in nearly any economic environment.
If you'd like a closer look at what my reasoning was behind each selection, you can do so by clicking on any, or all, of the following portfolio components:
•Waste Management
•Intel
•NextEra Energy
•MasterCard
•Chevron
•Select Medical
•Ford
•American Water Works
•Procter & Gamble
•AvalonBay Communities
As you might have anticipated with a portfolio of basic needs stocks, dividends were once again the talk of the week, with two companies paying out their quarterly distribution and another announcing their third-quarter dividend.
Show me the money!
Although it's been far and away the worst performer thus far, electric utility NextEra Energy (NYSE: NEE ) delivered a $0.66 per-share dividend to shareholders as of today. Electric utilities provide some of life's most basic necessities (electricity), but they also have a tendency to underperform when the market is roaring higher since they're most often viewed as defensive plays. I wouldn't read too much into NextEra's recent weakness, especially considering that its energy portfolio is focused on promoting rapidly growing and clean alternative energies.
In addition to NextEra, shareholders in Chevron (NYSE: CVX ) on Tuesday received their quarterly $1 per-share stipend. On top of receiving this hefty dividend, shareholders were also treated to good news when Chevron announced a settlement with Brazilian lawmakers who levied $17.5 billion in lawsuits against it and Transocean for an oil spill in Nov. 2011 for a mere $42 million. Owning a global oil giant like Chevron does expose investors to the possibility of adverse events like a spill; however, rarely -- with the exception of the BP spill -- do these adverse events translate into monstrous fines and penalties.
We also heard from rental REIT AvalonBay Communities (NYSE: AVB ) this week, which announced a third-quarter dividend of $1.07 that'll be payable to shareholders on Oct. 15 that are on record as of Sept. 30. If I were an AvalonBay shareholder I would be pretty excited about the prospect of 30-year mortgage rates rising. Higher lending rates tend to discourage prospective homebuyers from pulling the trigger and have the effect of pushing those people back into renting. I find it very likely that AvalonBay's pricing power and occupancy rate is only going to improve moving forward.
But don't forget these moves ...
Payment processing facilitator MasterCard (NYSE: MA ) had a particularly strong week after receiving a price target boost on Thursday from Jefferies to $758, with the research firm holding to its "buy" rating on the company. The reason for the target price hike relates to the 85% of worldwide transactions still being conducted in cash, giving MasterCard ample opportunities for growth over the coming decades. This is a point I've touched on numerous times and is a primary reason I selected MasterCard to this basic needs portfolio. Also, as a bonus, keep in mind that since MasterCard is a payment processor and not a direct lender, it has zero worries about consumer credit quality.
Also not to be overlooked, water utility American Water Works (NYSE: AWK ) announced an increase to its revolving credit limit of $250 million to $1.25 billion while also pushing $1.1 billion of existing debt due in October 2017 out an additional 12 months. The move makes sense given the historically low lending rates we're seeing right now. It's even more important if you consider that the water utility business sees most of its growth through synergies from acquisitions, so expanding American Water Works' available credit looks like a smart strategic move.
Back to basics
Despite the S&P 500 having a very good week, this portfolio of conservative and basic needs stocks managed to outperform it, albeit marginally, by 0.1%. So far this portfolio is doing everything expected of it; it's producing substantial dividend income and it's not causing us to lose sleep overnight with wild vacillations. Over the next three years I expect the combination of dividend income and projected outperformance in both boom and bust economies to drive a substantial outperformance over the S&P 500.
Check back next week for the latest update on this portfolio and its 10 components.
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NextEra Energy - profile -
>>> NextEra Energy, Inc., (NEE) through its subsidiaries, engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada. The company is involved in the generation of renewable energy from wind and solar projects. It also generates electricity through natural gas, nuclear, oil and coal, and hydro power plants. The company serves approximately 8.9 million people through approximately 4.6 million customer accounts in the east and lower west coasts of Florida. In addition, it leases wholesale fiber-optic network capacity and dark fiber to telephone, wireless, Internet, and other telecommunications companies. As of December 31, 2011, NextEra Energy, Inc. had approximately 41,000 mega watts of generating capacity. The company was formerly known as FPL Group, Inc. and changed its name to NextEra Energy, Inc. in May 2010. NextEra Energy, Inc. was founded in 1984 and is headquartered in Juno Beach, Florida. <<<
Water Sector -- >>> 4 Water Plays for a Thirsty Portfolio
By Leo Sun
May 3, 2013
Tickers: AWK, PIO, PHO, XYL
http://beta.fool.com/leokornsun/2013/05/03/four-water-plays-for-a-thirsty-portfolio/33148/?source=eogyholnk0000001
When most people think about valuable commodities, they tend to think about gold or oil. Most people neglect the world’s most important commodity -- fresh water.
Although water covers 70% of the Earth’s surface, only 1% of the world’s water is available for drinking. 97.5% of the planet’s water is seawater, and 70% of our available fresh water is frozen in glaciers. Meanwhile, climate change, water pollution, and poor management of water resources has led to a rapid depletion of the world’s fresh water. Parts of the world (including the United States) have been hit with prolonged droughts, which have caused food prices to skyrocket.
Worst of all, the world’s population, currently at 7 billion, is projected to reach 9 billion by 2025. By that time, the UN estimates that 67% of the world’s population will be lacking continual access to fresh water. In addition, the UN has estimated that fresh water demand has risen threefold over the past five decades.
Let’s explore a few ways that investors can benefit from the upcoming fresh water crisis. Since water isn’t a tradeable, priced commodity that can be purchased on the futures market, there are three simple ways that investors can invest in water: infrastructure, utilities and ETFs.
Infrastructure
Water infrastructure companies will become increasingly important in the next decade, since many water pipes within the United States are more than 60 years old, with some exceeding 100 years old. This has led to water main breaks, sinkholes and leaking pipes across the country. The costs to repair the U.S. water infrastructure, which leaks around 1.7 trillion gallons of water daily, is estimated to be around $1 trillion. The rest of the world faces similar challenges.
Xylem (NYSE: XYL) is a solid pure water infrastructure play that has a presence in 150 countries worldwide. Xylem operates in two business segments - Water Infrastructure and Applied Water Systems. In the first quarter, Xylem earned $0.27 per share, down from $0.36 a year ago, and revenue declined $46 million to $879 million.
Xylem’s Water Infrastructure segment focuses on providing clean water delivery, wastewater transportation and treatment, and analytical instruments. During the first quarter, this segment's revenue declined 6% from the prior year quarter, which the company primarily attributed to U.S. industrial weakness and challenges in the European market. The segment reported lower volumes and higher expenses from acquisitions and investments.
Meanwhile, its Applied Water segment consists of water products and services for residential and commercial buildings, along with industrial and agricultural businesses. Revenue for this segment slid 3% for the same reasons as the Water Infrastructure business. However, U.S. residential buildings and agricultural end markets showed substantial strength that offset some losses.
To most investors, Xylem’s top and bottom figures look mediocre, but it’s important to remember that water stocks are long-term investments that should be held for one or two decades. Meanwhile, Xylem has been focusing on strengthening its brand portfolio. This quarter, it acquired U.K.-based wastewater service PIMS and Australian water and wastewater control company MultiTrode. It also introduced new dewatering solutions from its Godwin and Flygt brands, and new analytical instruments from its YSI and OI brands.
Xylem recently conducted a market survey, in which 88% of respondents stated that the U.S. government should be investing more heavily in improving water infrastructure, with 65% stating that they would accept higher monthly bills to cover the costs.
Utilities
Another simple way to invest in water is through investor-owned water and wastewater utilities. The biggest name in this field is American Water Works (NYSE: AWK). American Water Works operates primarily in the United States and Canada, covering 15 million people in 30 states and two Canadian provinces. The company, founded in 1886, has grown rapidly by buying up local utility companies. In 2012, it acquired 16 new water systems, which added 55,000 customers for the cost of $44.6 million.
In the fourth quarter of 2012, American Water Works’ net income came in at $0.31 per diluted share, down from $0.34 in the prior year quarter. However, revenue rose 7.9% to $2.9 billion. For the full year, the company’s earnings came in at $2.11, up from $1.73 in 2011.
Since the U.S. water infrastructure is aging quickly, American Water Works has invested a lot of capital into upgrading and maintaining its water systems. In 2012, the company invested $929 million in company-funded capital improvements, up from $925 million in the previous year. It completed two major projects in New Jersey and Pennsylvania, which cost a combined $176 million. The two projects will benefit over 625,000 people. The company noted that many of those upgrades were to its underground water systems, the importance of which was highlighted last year during Hurricane Sandy.
In 2012, the company’s subsidiary, American Water Resources, was chosen by the New York City Water Board as the office service line protection provider for the city’s five boroughs. This is the largest municipal-partnered water and sewer line protection contract in history, and will take effect in the first quarter of 2013.
Just like Xylem, investors in American Water Works shouldn’t expect big overnight profits. Rather, they should think of the investment like the water utility on a Monopoly board -- steady returns that pile up over time. In the meantime, the company pays a decent quarterly dividend of $0.25 per share.
ETFs
Last but not least, investors should consider two water ETFs for a more diverse slice of the market -- PowerShares Water Resources (NYSEMKT: PHO) and PowerShares Global Water (NYSEMKT: PIO).
PowerShares Water Resources is a domestic play that attempts to invest at least 90% of its total assets into the underlying components of the NASDAQ OMX US Water Index. The ETF is spread out over a wide range of water-related companies that specialize in water treatment, utilities, pipe and pump manufacturing. Considering the urgent necessity of upgrading America’s water infrastructure, this ETF is sure to rise in the long term.
Meanwhile, PowerShares Global Water is focused on international markets. This ETF attempts to invest 90% of its assets into tracking the underlying securities of the NASDAQ OMX Global Water Index. It mainly consists of international water infrastructure stocks that focus on conserving and purifying water for residential, commercial and industrial buildings. It consists of ADRs (American Depositary Receipts) and GDRs (Global Depositary Receipts) of companies based in 24 countries that span across the Americas, Europe, Africa and Asia.
You’ll notice that neither ETF has stayed ahead of the S&P 500 over the past three years, which means that these stocks should not comprise the core of your portfolio. Instead, they should be extended period satellite investments.
The Foolish Bottom Line
For now, water stocks are some of the most boring, slowest-growing stocks you can own. However, if you’re a young investor with time on your side, then I recommend picking up some shares of each of these long-term water plays, so you can capitalize on that day in the near future when the world realizes that fresh water, our most precious resource, is more valuable than oil.
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American States Water -- >>> In a World of Scarce Resources, Consider these Stocks
By Robert Ciura
February 13, 2013|
Tickers: AWR, ADM, DE, MON
http://beta.fool.com/rciura/2013/02/13/world-scarce-resources-consider-these-stocks/24122/?ticker=MON&source=eogyholnk0000001
The human population was estimated to be nearly 7 billion in 2011 by The World Bank. Last year, the U.S. Census Bureau estimated the number to be slightly higher than that. The world’s population keeps growing, and emerging economies continue to develop. As a result, commodity prices have risen in recent years and are likely to keep rising over time. With that in mind, the following companies have business models poised to profit from the reality of scarce resources.
Monsanto (NYSE: MON) is the $55 billion agricultural giant that provides products for farmers worldwide. It operates in two segments, Seeds and Genomics, and Agricultural Productivity. Last October, the company reported its full-year financial results, which were very good.
Total revenues rose more than 14% year over year, and earnings per share climbed more than 28% versus the prior year. Since 2008, Monsanto achieved four-year compound annual growth in sales of 4.4%.
Furthermore, the company got off to a great start in fiscal 2013, reporting first-quarter sales growth of more than 20%. Monsanto’s stock has been on fire recently, rising more than 30% in 2012 and has increased more than 6% to begin 2013.
Archer Daniels Midland (NYSE: ADM) carries a $20 billion market capitalization and manufactures and sells protein meal, vegetable oil, corn sweeteners, flour, biodiesel, and ethanol. In early February, the company reported 2012 second-quarter earnings per share of $0.60, up 18% from the previous year. In addition, the company provided investors with a 9% dividend increase.
Archer Daniels Midland has an impressive dividend track record, having paid dividends for 325 consecutive quarters. The company has raised its dividend every year since 2002. At current prices, the stock looks to be attractive for both value and dividend investors, with a trailing price-to-earnings ratio of less than 15 and a 2.5% yield.
Deere (NYSE: DE) manufactures and distributes agriculture and turf equipment, and construction and forestry equipment, worldwide, commanding a $36 billion market value.
Deere is certainly not an expensive stock, with trailing and forward P/Es of 12 and 10, respectively. In addition, the stock trades for a price-to-earnings growth ratio of 1.13, indicating that the company is priced conservatively in relation to its future growth expectations.
In December, Deere provided investors its annual results, reporting sales and earnings per share growth of 13% and 15%, respectively. In addition, in 2012 Deere raised its dividend by more than 12% and should raise its dividend in time for its next payout.
American States Water Company (NYSE: AWR) provides the most scarce resource of all: water. The company purchases and distributes water in California.
The company is the gold standard for dividend-raisers. American States Water Company has increased its dividend every year since 1955, a streak amounting to 58 consecutive years. Its last dividend raise was an impressive 27% in 2012.
American States Water Company is a small-cap stock with only a $1 billion valuation. Clearly, the company has room to grow, and considering it provides an absolute essential product to society, would be interesting to research for both growth and income investors.
The Bottom Line
As the number of people on this planet keeps rising, its available resources remain constant. There is only so much water and land on this planet available for food production. Developing economies, such as the BRIC nations (Brazil, Russia, India, and China) have experienced high economic growth and consequently high demand for commodities such as wheat, corn, and water.
Value investors may prefer Archer Daniels Midland and American States Water Company because of their market-beating dividend yields and reasonable valuations. More growth-oriented investors probably would prefer Monsanto and Deere; their yields are slightly lower, but they offer a compelling combination of high dividend growth and the opportunity to profit handsomely from the global economic growth story. No matter an investor's preference, each of the three companies above has an extremely successful business model and will continue to succeed in a world of scarce resources.
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CPFL Energia - >>> 3 Stocks to Get on Your Watchlist
By Sean Williams
September 26, 2012
http://www.fool.com/investing/general/2012/09/26/3-stocks-to-get-on-your-watchlist.aspx
CPFL Energia
I figured I'd start us off by looking at a very unloved electric utility company in Brazil, CPFL Energia. The utility has been under pressure recently because of expectations of slow GDP growth in Brazil (just 2% this year) and concerns that the Brazilian government may push to lower electric costs by as much as 10% to curb a further growth slowdown.
I'm looking at things a bit differently. I do see a competitive utility space and possible negative implications from a government reduction in electricity costs. However, over the long term I see Brazil significantly outperforming more industrialized nations, which affords a greater growth opportunity to CPFL. In addition to paying out a remarkably large dividend (which is given out semiannually), CPFL's entire energy lineup is renewable: thermoelectric, hydroelectric, biomass, and wind power plants. With big investments flowing into alternative energy, CPFL Energia is an attractive name that should remain near the top of your watchlist.
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>>> Water - Good as gold for investors
8/31/2012
|
By Jim Jubak
MSN
http://money.msn.com/investing/water-good-as-gold-for-investors
Water: Good as gold for investors
The world's most critical commodity is getting harder to find, which makes it an attractive investment. Here are 10 ways to play it.
Water.
It's the global commodity that most deserves a place in your portfolio -- ahead of gold, iron ore, copper or oil, I'd argue.
And it's also the toughest to invest in. Water isn't traded -- in fact, in many countries it's not even metered. Pure-play water companies are hard to find, especially if you rule out the obvious but slow-growing water utilities. The leading companies in big swaths of the market are industrial conglomerates in which water has historically made up a relatively small share of revenues.
For example, among the top 10 companies in the Guggenheim S&P Global Water (CGW 0.00%, news) exchange-traded fund, which is designed to track the Standard & Poor's Global Water Index, I'd call five of them water utilities and two diversified industrial companies with a presence in water. That leaves only three, or about 30% of the ETF and index, anywhere near the sweet spot in water. (More about what the sweet spots are later in this column.)
How bad is the US drought?
But this is changing.
As the individual parts of the water market get bigger, investors are seeing a wider array of pure plays. For example, orders for desalination equipment to convert seawater into water for drinking and industrial processing hit $5 billion in 2011, according to Global Water Intelligence. Those orders are forecast to hit a record $17 billion in 2016.
And it doesn't hurt that both companies and investors see water bucking the trend of other environmental sectors. As of Aug. 29, the Guggenheim S&P Global Water ETF was up 8.85% from last year, versus a brutal 38.53% drop for the PowerShares WilderHill Clean Energy (PBW 0.00%, news) ETF.
A resource you can't live without
You can put together the investment case for water from the headlines.
Supply is falling. Droughts devastate -- depending on the year -- the United States, Australia, India, China and Argentina. Evidence mounts that the global climate is becoming more volatile, putting historic water-carrying weather patterns such as India's monsoon season, at risk. Supplies of clean water shrink as underground aquifers are mined for limited supplies of water accumulated over millions of years. Clean water supplies also dwindle as existing sources are polluted by farm chemicals, inadequately treated industrial discharge and untreated urban sewage.
Amid all this, demand is rising. According to data from the United Nations, withdrawals of fresh water have tripled in the last 50 years, with demand for fresh water increasing by 64 billion cubic meters (64 trillion liters, or 16.9 trillion gallons) a year. Some of that is from global population growth of about 80 million people a year, at current rates. Some is from changes in lifestyles and eating habits that increase per-capita water consumption. And some is from soaring demand for clean water from farmers, industry and city dwellers. Add in increases in energy production (because tapping sources such as oil sands and biofuels requires more water than extracting from traditional sources of oil and natural gas).
The math is pretty simple: Falling supply and rising demand will drive the price of the commodity higher. Want to know where to invest in water? Follow the flow. In this column, it takes me to 10 water stocks in three categories.
1. Global water utilities
Rising prices for water will produce gains for global water utilities, even if those returns are capped by regulators at a specific return on invested capital. The best bet here is on water utilities that are building out infrastructure in places where water demand is rising most rapidly and new investment represents a large percentage increase over existing investment.
If that sounds like a prescription for investing in water utilities in developing economies, it is.
For example, Manila Water (trading in Manila as MWC.PM), which already supplies water for half the Philippine capital, has recently bought a 47% stake of Vietnamese water distributor Kenh Dong Water Supply and 49% of treatment-plant operator Thu Duc Water. The stock is up 43.86% in the last year.
Or Guangdong Investment (GGDVY 0.00%, news), which supplies Hong Kong's water (and is up 33.97% in the last year). Or Companhia de Saneamento Basico do Estado de São Paulo (SBS 0.00%, news), which collects, treats and supplies water in Brazil's São Paulo state (and is up 60.62% in the last year).
2. Wastewater companies
That math also adds up for investing in companies that handle and treat wastewater. More water consumed means more water as waste. More water demand means more demand for treatment services that turn dirty water back into clean water.
For example, Xylem (XYL), an October 2011 spinoff from ITT (ITT), focuses on moving water from distant sources and through increasingly complex supply systems, then treating and testing it. The company's water infrastructure unit -- which accounts for about half of its revenue -- gets its income from transportation equipment/pumps (73%), treatment (18%) and testing (9%). In 2011, 64% of the company's revenues came from outside the United States, which exposed the company to the recession in European economies (37% of revenue). As a result, the stock was down 5.36% in 2012 as of Aug. 29.
Since most of the company's European business is in the water-infrastructure unit, where customers are water utilities that derive revenue from their customers' water bills, I think the pullback to date is understandable. And it creates a buying opportunity for patient investors. I'll be adding shares of Xylem to my Jubak's Picks Portfolio.
3. Companies making more water
The biggest opportunity suggested by that math is investing in companies that create more clean water. God may not be making any more water, but human beings -- with enough money and energy -- are turning part of the current supply of seawater (and other brackish water) into water fit for drinking or industrial uses.
Current technologies for desalination use huge amounts of energy, so they produce water at a high cost. But when the alternative is moving San Diego to a wetter climate or giving up on the Saudi royal family's dream of an economy that can feed itself and turn its raw commodities into higher-margin chemicals, the high cost of desalinated water is relatively unimportant.
The cost is falling, though. Reverse osmosis, the current desalination technology of choice, produces clean water for about $1 per cubic meter. That's about 10 times the cost of water from traditional sources (which are limited, of course), but about half the price of water from desalination 20 years ago, according to the International Desalination Association.
If you'd like to get your desalination (and general water) exposure as part of an industrial equipment company with its fingers in a lot of infrastructure pies, I'd recommend General Electric (GE). The stock has been a member of my Jubak Dividend Income Portfolio since February.
.
If you're looking for more-concentrated exposure to desalination, I'd suggest turning to Singapore, which has become a world leader in the technology, thanks to the challenge of being a tiny city-nation with very limited sources of natural water.
Keppel (KPELY) combines three very timely businesses: construction of deepwater drilling rigs; waste disposal and waste-to-energy in Asia; and water desalination and wastewater treatment in Singapore, the Middle East and China. (The stock is up 2.7% in the last year.)
A more concentrated Singapore water play is Hyflux (HYFXY). The company has just completed a water desalination plant in Algeria and has begun work on a desalination plant in India. Profit in the second quarter climbed 21% year over year. China currently accounts for 20% of the company's revenue, and Hyflux is looking to grow that share to 33% within the next two years. (The shares are down 20.14% in the last year.)
And in building your water portfolio, I wouldn't forget about some longtime favorites, such as pump-maker Flowserve (FLS), and water-meter makers Badger Meter (BMI) and Itron (ITRI).
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Wisconsin Energy -- >>> WEC Plant to Switch to Nat Gas
By Zacks Equity Research
Aug 21, 2012
http://finance.yahoo.com/news/wec-plant-switch-nat-gas-181435322.html
Energy utility Wisconsin Energy Corporation (WEC) announced that its unit We Energies is planning to convert the 280 MW, coal fired Valley Power Plant generation unit to natural gas. The primary reason for such a conversion is to make the plant more cost effective and reduce the emission of green house gases.
The company has already filed an application with the Public Service Commission of Wisconsin for the necessary permission to make the switch in fuel source. On gaining regulatory nod, the company hopes to convert the plant by 2015 or 2016. In the process, Wisconsin Energy will incur costs in the range of $60 million to $65 million.
Utility operators are gradually converting their coal based power plants to natural gas mainly due to nat gas’ clean burning nature, cheaper price, abundant domestic availability and its adherence to the stringent environmental regulation outlined by the authorities. As per Energy Information Administration’s (EIA) reports, 96.65 GW of new electric generation will be added in the U.S. within 2009 -2015, out of which 20% will be natural gas-fired plants.
Another large utility operator Duke Energy Corporation’s (DUK) subsidiary Progress Energy Carolinas has decided to shut down its coal fired generation units earlier than the scheduled 2013. The retirement is a part of the ongoing modernization process and the closed coal fired units will be replaced by natural gas fired units and oil-fired combustion turbines.
Natural gas will gradually become a major source of power generation and along with utilization of alternate energy the carbon footprints for power generation will substantially decline. The share of natural gas for power generation is projected to grow from 24% in 2010 to 28% in 2035, as per the EIA’s long-term outlook.
Besides converting its coal based power plant to natural gas, the company is also working on constructing a biomass-fueled power plant in northern Wisconsin. The Zacks Consensus Estimates for the third quarter and full year 2012 are 57 cents and $2.31, respectively.
Wisconsin Energy Corporation currently retains a Zacks #2 Rank, which translates into a short-term Buy rating.
Based in Milwaukee, Wisconsin, Wisconsin Energy, through its subsidiaries, generates and distributes electricity in Southeastern, East Central, and Northern Wisconsin, as well as in the Upper Peninsula of Michigan. The company also distributes natural gas.
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Hill Intl (HIL) -
>>> Hill International, Inc. provides project management and construction claims services worldwide. The company?s Project Management Group segment offers fee-based or agency construction management services, including program and project management, construction management, project management oversight, troubled project turnaround, staff augmentation, estimating and cost management, project labor agreements, and management consulting. It manages various phases of the construction process on behalf of project owners and developers; and undertakes activities, such as planning, scheduling, estimating, budgeting, design review, constructability analyses, value engineering, regulatory compliance, development of project procedures, procurement, project reporting, expediting, inspection, quality assurance/quality control, safety oversight, contract administration, change order processing, and claims management, as well as on-site management of contractors, subcontractors, and suppliers. The company?s Construction Claims Group segment advises clients for preventing or resolving claims and disputes based upon schedule delays, cost overruns, and other problems on construction projects. This segment undertakes various activities, which include claims preparation, analysis and review, litigation support, lender advisory, cost/damages assessment, delay/disruption analysis, contract review and assessment, risk assessment, adjudication, and expert witness testimony; and assists owners or contractors in adversarial situations. Its clients comprise construction project owners, contractors, subcontractors, architects, engineers, attorneys, lenders, and insurance companies. The company serves the United States and other national governments and their agencies; state and local governments and their agencies; and the private sector. Hill International, Inc. was founded in 1976 and is headquartered in Marlton, New Jersey. <<<
Toxic financing info -
>>> Toxic financing
http://investorstemcell.com/forum/act-stock-talk-pps-charts-volume-capital-structure-etc/8034.htm
Found this post on the ihub board. Thanks to locksflooring for posting. I'm the first to admit, i am really stupid when it comes to the business aspect of this company. I was just hoping that Rocky or others more adept at this aspect of the company could give some feedback and insight as to the validity of this post. Granted, i think we're in a much better situation than some of the companies (cord blood america) mentioned in this article, but it could be one reason out of many as to why our pps has never been able to stabilize.
IS JMJ THE REASON ACTC IS BEING HELD BACK ! Must read !! Quite Interesting, if you look into what is being discussed.
The downturn in the stock market was especially severe in the third quarter, as sovereign debt fears in Europe and recession concerns in the United States caused the S&P 500 to decline 14%, the worst quarterly performance since the financial crisis of 2008. While equities suffered globally, no more pain was felt than by those who owned small and microcap stocks. The Russell Microcap Index plunged more than 20% in the third quarter, and is down more than 20% for the year. However, out of declines come opportunities, and the downturn in tiny stocks has spawned a new breed of predatory investors who prey on small, unsophisticated cash-starved companies the same way that some animals eat their young. Although funds like NIR Group have shut down due to SEC lawsuits and issuer litigation, other groups such as JMJ Financial, Ironridge Global Partners and Southridge Capital Management have taken their place. We’ll take a brief look at each and why when you see them in your portfolio you should run the other way.
JMJ Financial
The group, founded by Justin Keener, who bills himself as a “lifetime entrepreneur” according to its web site, typically invests $400,000-$1,250,000 up-front in small companies. The structures are generally convertible transactions, in which Notes are converted into equity at a time of JMJ’s choosing. So far, so good. The “toxic” part however is that there is no floor. When JMJ converts, it is almost always at prices between 50-80% of the market price for the stock, wherever the stock is at the time it chooses to convert. The “good news” for investors is that the conversion opportunity doesn’t generally occur for six months, as it purchases securities that are restricted. However, once the conversion opportunity occurs, the results are often not pretty.
One such company who appears to be a “repeat offender” with JMJ is Cord Blood America (OTCBB: CBAI), a company that provides collection and storage of stem cells. On January 12, 2011, the Company issued a $1,050,000 "Convertible Promissory Note" to JMJ according to regulatory filings with the SEC. The three-year Note bears interest in the form of a one- time interest charge of 10%, payable on the maturity date. The problem is that the Note is also convertible at any time into common stock at a per share conversion price equal to 85% of the average of the 5 lowest traded prices for the Company's common stock in the 20 trading days previous to the effective date of each such conversion. In essence, regardless of when JMJ converts, the lender is assured of at least a 15% discount to the price at the time of conversion, and likely a lot more than that as it can pick the lowest prices during the conversion price. Not surprisingly, the company said in the same regulatory filing with the SEC it owed the investor liquidated damages from a previous transaction. The penalties included a reduced conversion price, and an increase in principal of more than 30%. The stock has lost more than 90% of its value since the middle of May this year, just two months before JMJ could start converting. Unfortunately, many of the other stocks that JMJ has funded have experienced similar results.
Ironridge Global Partners
Perhaps the most predatory of all groups is the newest. Co-founded earlier this year by John Kirkland, an attorney who worked for Marc Dreier, currently serving 20 years in jail after pleading guilty to a $700 million fraud and Brendan T. O’Neil who has run two funds that have folded in the last three years, Ironridge bills itself, according to its web site, as “supplying innovative financing solutions and flexible capital, as it seeks to unlock the full potential of cash-constrained businesses.” There is certainly some truth to that statement, as the companies it has completed deals with seem on the verge of going out of business. Ironridge usually doesn’t fund the company until after it sells the stock, as the filings show that payments are often not made until at least 20 days after they have received free-trading shares (imagine borrowing money from somebody and having to provide them with the money to make your loan before you receive any proceeds from them). The destruction in stocks they have completed transactions with makes the devastation from Hurricane Irene seem tame by comparison. Just two weeks ago, Uluru (NYSE: ULU) announced a “$1.6 million financing at a premium to market with Ironridge.” The problem is that the company neither received $1.6 million, nor was the deal done at a premium. The details in the 8-k suggest that the press release was misleading, as the company will receive proceeds only after a certain dollar amount of stock trades, and Ironridge’s actual cost to buy the stock is a fraction of the advertised price. Investors don’t seem fooled, as ULU’s stock is down nearly 50% in two weeks since the deal was announced. Less than two weeks after announcing the deal with Ironridge, the regulatory arm of the NYSE AMEX notified Uluru that it was not in compliance with listing standards and that it faced delisting. Uluru, like all of the companies Ironridge has completed transactions with, currently has a nominal market capitalization, in this case less than $2 million.
Uluru is not the only company in Ironridge’s portfolio facing delisting. PositiveID Corporation (OTCBB: PSID) was delisted from the Nasdaq less than five weeks after entering into “Strategic Financings for Up to $13.8 Million at a Premium to Current Share Price” with Ironridge. Shortly after the announcement, however, the company acknowledged in an 8-k filing that it did not receive the funds it had anticipated and that the price of the deal was being revised lower (think floorless financing). According to the filing made nearly two months after the deal was announced, the company has still not received the $1.5 million it was anticipating receiving as the first part of the funding. Approximately one month after the deal was announced, the CEO resigned. The stock has lost approximately 60% of its value in two months since the deal was announced.
Apparently inking a deal with Ironridge is not a career-enhancing move for a CEO. Less than three weeks after announcing an initial round of funding of approximately $1.12 million from Ironridge, the CEO of High Plains Gas (OTCBB: HPGS) resigned in the wake of the stock’s loss of more than 65% of its price. Like other companies which have done business with Ironridge, neither High Plains nor its creditors had received funding weeks after the deal was completed. Imagine losing your job, destroying your stock and not receiving proceeds after all of that. On average, from the time a regulatory filing was made announcing a deal with Ironridge, companies saw their stocks lose more than half their value within one month.
Southridge Capital Management
While Ironridge in a short period of time has become notorious for destroying small companies, Southridge has been at it for much longer. Apparently, the SEC decided that if companies couldn’t protect themselves from the group that it would step in and attempt to halt the predatory investment practices. Less than one year ago, both the SEC and Connecticut filed suit against the fund, accusing it of filing “ false financial statements and other violations of the funds’ private placement memoranda and charging excessive fees to the funds’ investors,” according to the state’s complaint, “based on misleading and fraudulent valuations of the assets Southridge managed on behalf of the funds and their investors.”
The fund’s investors are not the only ones however taking it to court. Hyperdynamics sued Southridge in a Georgia court charging that it “conspired to engage in fraud and market manipulation involving toxic convertible financing transactions with companies seeking private placement investors. According to Hyperdynamics, Southridge used an offshore financial structure to conceal both the true identity of, and the relationship between, the Defendants when preying upon unsuspecting businesses seeking financing. The Defendants are alleged to enter into toxic convertible financing agreements with the then-present intent to surreptitiously use short sales and naked short sales to manipulate the value of the company's stock by driving the price downward, and to then acquire a majority position in the company upon the conversion of the investor's preferred securities to common stock. Hyperdynamics is just one of many companies who has sued Southridge for destroying its business.”
Limited access to the capital markets has made for tough times for small companies. Many large and small companies have seen significant declines in the price of their stocks. But dealing with these groups seems to represent the last step before a company shuts its doors, leaving investors holding worthless securities. If you see one of the companies in your portfolio announce a deal with one of these groups, beware that it is likely not one it appears to be and that the stock and your bankroll is likely to suffer significant damage. Caveat emptor!
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Uni Core Holdings -
Looking at large shareholders, I see Ironbridge recently received 97.5 mil shares as part of a settlement for outstanding debt owed them of $1.48 mil. Based in the Virgin Islands, Ironbridge looks like an outfit that acquires debts at a discount and then takes shares of the company in lieu of cash. Ironbridge is limited to getting 9.99% of UCHC's outstanding shares, but if the share count goes up, Ironbridge can get additional shares up to the 9.99% limit.
Tonaquint reported owning just under 46 mil shares in May, the proceeds from converting their two convertible notes ($2.53 mil) back in late 2011.
Calculating the latest share count, Ironbridge based their 9.99% figure on 879 mil shares, so adding in their 97.5 mil shares gives a current share count of approx 975 mil shares, so figure 1 billion shares, giving a market cap of approx $780 K.
At the current pps of .0008/shr, Ironbridge's 97.5 mil shares are worth only $78 K, and Tonaquint's 46 mil shares (if they still have them) are worth only $37 K.
Energy Solutions -
Nuclear
Investors saw Energy Solutions (ES) get hammered yesterday as shares fell $1.97 (54.87%) to close at $1.62/share on volume of 32.1 million. There was huge volume for the stock, which was over 30 times the three month average on news that the company lowered guidance, hired a new Chief Executive Officer and a new Chief Financial Officer. All of this contributed to the downward movement as the market absolutely did not like this. The shares hit a new 52-week low in yesterday's trading and at this point investors should simply stay away. Not a whole lot is going correctly for the company and those are usually situations you want to stay away and not attempt to be a contrarian - especially in a market such as the one we currently find ourselves in.
http://seekingalpha.com/article/653191-5-commodity-stocks-moving-on-news?source=yahoo
FactSet Research (FDS) plunged 9% in massive volume after reporting that Q3 revenue rose 10% to $202.3 million, a shade below the $202.9 million analysts expected. EPS rose 13% to $1.05 — a penny above estimates. The company's earnings guidance was at the low end of analysts' forecasts while its revenue guidance was below views.
The stock pierced its 50-day moving average and briefly sank below its 200-day line before rebounding above the key support level.
http://news.investors.com/article/614527/201206121212/stocks-gains-accelerate-at-midday-in-mixed-volume.htm?ven=yahoocp,yahoo
Energy Solutions -
>>> The non-Dow component EnergySolutions (NYSE: ES ) was by far the worst performer today, down more than 50%, as the nuclear decontamination and decommissioning firm suddenly announced a change in leadership, with Val John Christensen out and David Lockwood becoming the new skipper. In addition to the sudden and unexpected change, EnergySolutions revised its annual outlook, from a range of $150 million to $160 million down to a range of $130 million to $140 million. Lowering a company's economic outlook or sudden changes in key personal typically causes sharp spikes in equity prices, but a 50% drop makes us believe there is more trouble on the horizon.
RadWaste Monitor, a trade publication, reported that EnergySolutions could be splitting the company by selling its nuclear waste government-projects group. The company lost a five-year, $121.2 million contract in March, which comes on the heels of a 45% drop over the past year of the government group's revenue. <<<
http://www.fool.com/investing/general/2012/06/11/debt-issues-weigh-down-the-dow.aspx
>>> DigitalGlobe, GeoEye jump on nod for imagery funding
GeoEye offers to buy DigitalGlobe for $792 million
Fri, May 4 2012
By Andrea Shalal-Esa
http://www.reuters.com/article/2012/05/26/us-digitalglobe-geoeye-shares-idUSBRE84P00520120526?feedType=RSS&feedName=globalMarketsNews&rpc=43
WASHINGTON | Fri May 25, 2012 8:03pm EDT
(Reuters) - DigitalGlobe Inc (DGI.N) and GeoEye Inc (GEOY.O) on Friday welcomed a decision by the Senate Armed Services Committee to authorize continued funding for commercial imagery purchases, a move that sent the two companies' shares sharply higher.
Shares of DigitalGlobe rose as much as 10 pct while those of GeoEye jumped 9 percent in response to the first positive news for the sector in quite a while.
Both DigitalGlobe and GeoEye provide digital imagery services to U.S. military and intelligence agencies and are working on next-generation satellites to double their capacity.
But their shares have been hammered in recent months amid news that the U.S. National Geospatial-Intelligence Agency plans to sharply reduce and possibly halve its purchases of those products over the next years.
The prospect of sharply lower U.S. government orders has prompted an unusual flurry of takeover negotiations between DigitalGlobe, which had a market capitalization of $731.26 million on Friday, and GeoEye, with a market capitalization of $426.87 million. The situation is at an impasse at the moment, but industry analysts do not believe the lower level of orders will be great enough over the longer term to sustain both companies.
The Senate Armed Services Committee announced late on Thursday that it had voted to authorize $125 million in continued funding for commercial imagery purchases in fiscal year 2013, which begins in October, restoring funds cut by the Pentagon in its proposed budget.
The move would maintain funding at fiscal year 2012 levels and mandates a study by the Joint Staff and the Congressional Budget Office on the requirements for commercial imagery. A full report is due to be released in early June.
But the funding still has a long way to go before becoming law. It must still be approved by the full Senate and the House of Representatives, and will need action by both House and Senate appropriations committees before it can take effect.
U.S. defense officials say cutting funding for commercial imagery was a difficult, but necessary choice given Pentagon plans to cut funding by $487 billion over the next decade.
COMPANIES WELCOME SENATE PANEL'S MOVE
Many U.S. military commanders like using commercial imagery because it is easier to share with allies, but defense officials say they are trying to find ways to improve their ability to share even classified data with allies. They also say they expect to double the production of digital satellite imagery with their own new government-owned satellites.
DigitalGlobe, which says it is better positioned to weather the cuts than GeoEye since it provides more imagery to the government at lower cost, said the committee's decision underscored the value of commercial imagery.
"DigitalGlobe is committed to continuing our legacy of providing superior value and performance to the U.S. government and taxpayers in support of our customer and national defense," the company said in a statement.
GeoEye also welcomed the news and said it continued to work on its new satellite, GeoEye-2, which it said would be the world's highest resolution and most accurate commercial satellite in orbit, when it is launched next year.
"While these are challenging fiscal times, the Senate Armed Services Committee and other defense and intelligence committees continue to express concerns with the risk reflected in the proposed budget," said Steve Wallach, GeoEye senior vice president for national security strategy.
GeoEye got another shot in the arm last week when it passed a key milestone on its new satellite, which will pave the way for the company to receive $111 million in cost-share funding already set aside by NGA, according to two sources familiar with the situation.
NGA is also taking steps to temporarily extend a service contract with GeoEye that is due to expire in September, said one of the sources, who was not authorized to speak publicly. That move will keep the company's work "on life support" until the future funding issue is resolved with Congress.
GeoEye has said its service agreement will be fully funded in fiscal 2012, but analysts say the company is unlikely to receive the full amount of cost-share funding for the new satellite that the federal government initially promised, analysts believe.
Dougherty & Company analyst Andrea James said shares were clearly buoyed by the Senate committee's move.
"The Senate is showing public support for commercial satellite imagery programs, which save taxpayer money ... this is the first concrete positive development that investors have seen in a while," she said via email.
DigitalGlobe shares rose $1.07, or 6.8 percent higher, to close at $16.76 on the New York Stock Exchange while GeoEye shares closed $1.29 higher, up 6.75 percent, at $20.39 on the Nasdaq.
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>>> It's Tax Day: What if you can't file?
http://money.msn.com/tax-preparation/tax-day-what-if-you-can-not-file-schnepper.aspx
There's no excuse for paying a late penalty if you can't file your tax return on time. You've got an alternative.
Today is Tax Day. What do you do if you know you can't file your income tax return on time?
You could simply ignore the problem and hope the Internal Revenue Service doesn't notice.
Uh . . . that's not a good idea. If you have filed before, the IRS will notice, and you will probably pay penalties.
You could always panic. Or you could use Schnepper's easy, short-term fix: File for an extension. It's a snap.
A 6-month reprieve with Form 4868
The IRS has a simple form that allows you an automatic six-month extension to file your taxes. It's Form 4868 (.pdf file), and it's easy to complete -- even without an accountant.
The form starts by asking for your name, address and Social Security number. It then asks you to estimate your tax liability and send any balance due. If you make this payment and cover at least 90% of your real liability, you win. You won't owe a late-filing or late-payment penalty.
You can use the IRS' Free File system online, pick up the form at any IRS office or order it toll-free at 1-800-TAX-FORM (1-800-829-3676). If you're using tax-preparation software at home, you can file by computer and receive an acknowledgement by email.
You must file it by the regular due date of your return. It is an automatic extension. You don't have to give the IRS any reason. You can get it even if the only reason you haven't filed is that you were lazy or didn't want to think about it.
Form 4868 gives you until Oct. 15 to complete and send in your return. But regardless of the form, if you think you owe money to the government, you must send it in by today.
You can ask for only one extension. So you really do have to file by Oct. 15.
The pain of penalties
It can hurt if you don't file for the extension. The IRS can hit you with a late-filing penalty of 5% of the tax not paid by the due date for each month -- or partial month -- your return is late. Generally, the maximum penalty is 25%. But if your return is more than 60 days late, the minimum penalty is $100 or the balance of the tax due on your return, whichever is smaller.
On top of the penalty for filing late, there is a penalty for paying late. This is usually 0.5% of any tax not paid by the due date. It is charged for the part of a month that the tax is unpaid. The maximum penalty is 25%.
The late-payment penalty can be excused if you can show "reasonable cause" for not paying on time. You are considered to have reasonable cause if at least 90% of your actual liability is paid before the regular due date of your return through withholding or estimated tax payments.
However, you'll owe interest on any tax not paid by the due date of your return. This interest runs until you pay the tax. Even if you have a good reason for not paying on time, you'll still owe the interest. Neither the interest nor the penalties are deductible.
If you're out of the country . . .
If you're a U.S. citizen or resident and were out of the country, you automatically get a two-month extension to file your return without filing Form 4868. But you still have to file by Oct. 15. "Out of the country" means either:
•You live outside the United States and Puerto Rico, and your main place of work is outside the U.S. and Puerto Rico.
•You're serving in the military (including naval service)
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More on Targacept (TRGT) -
http://stockpickr.com/5-stocks-under-10-set-soar.html-1
>>> One name under-$10 name in the biotechnology and drugs complex that’s worth keeping on your trading radar is Targacept (TRGT), which is engaged in the design, discovery and development of neuronal nicotinic receptor therapeutics for the treatment of diseases and disorders of the nervous system. The sellers have destroyed this stock in 2011, with shares off by 70%.
If you take a look at the chart for Targacept, you’ll see that this stock gapped down huge in November from $19.54 to under $8 a share. That gap down came on monster volume, which demonstrates that everyone who wanted out of this stock got out. Since that move, the stock has started to rebound and make higher lows and higher highs, which is bullish. Now the stock is setting up to breakout above some near-term overhead resistance levels, which if taken out, could spark a big move in this stock.
Market players should now watch TRGT for a breakout trade if it can manage to clear and close above $7.80 to $8 a share on high-volume. Look for volume that tracks in close to or above its three-month average action of 867,956 shares. The stock hit $8.05 already today, so watch for a close near the daily highs on TRGT. Volume so far is decent with almost 300,000 shares traded.
You could be a buyer of TRGT on any move or close above $7.80 to $8 on high volume. I would simply use a stop just below $7.52 or even tighter if you get long off strength. You could also buy off weakness with a mental stop just below $7.22. I would add to either position once TRGT takes out its gap down day high of $9.49 with volume. A move over $9.49 should set this stock up to fill some of that huge gap down from $19.54.
This is another heavily shorted stock by the bears. The current short interest as a percentage of the float for TRGT is a rather large 12.7%. The bears have also been increasing their bets form the last reporting period by 15.4%, or by about 566,500 shares. Any move back into that gap should set off a monster short-squeeze for TRGT, so keep this name on your trading radar.
Targacept shows up on a recent list of 10 Biotech Stocks Loved and Hated by the Pros. <<<
Name | Symbol | % Assets |
---|---|---|
NextEra Energy Inc | NEE | 11.29% |
Duke Energy Corp | DUK | 6.79% |
Dominion Energy Inc | D | 6.55% |
Southern Co | SO | 6.45% |
American Electric Power Co Inc | AEP | 4.61% |
Exelon Corp | EXC | 4.37% |
Sempra Energy | SRE | 3.92% |
Xcel Energy Inc | XEL | 3.23% |
Public Service Enterprise Group Inc | PEG | 3.17% |
Consolidated Edison Inc | ED | 2.98% |
Name | Symbol | % Assets |
---|---|---|
NextEra Energy Inc | NEE | 13.21% |
Duke Energy Corp | DUK | 7.79% |
Dominion Energy Inc | D | 7.69% |
Southern Co | SO | 7.43% |
American Electric Power Co Inc | AEP | 5.29% |
Exelon Corp | EXC | 5.01% |
Sempra Energy | SRE | 4.50% |
Xcel Energy Inc | XEL | 3.78% |
Public Service Enterprise Group Inc | PEG | 3.63% |
Consolidated Edison Inc | ED | 3.47% |
Name | Symbol | % Assets |
---|---|---|
NextEra Energy Inc | NEE | 11.26% |
Duke Energy Corp | DUK | 6.77% |
Dominion Energy Inc | D | 6.53% |
Southern Co | SO | 6.16% |
American Electric Power Co Inc | AEP | 4.59% |
Exelon Corp | EXC | 4.36% |
Sempra Energy | SRE | 3.91% |
Xcel Energy Inc | XEL | 3.22% |
Public Service Enterprise Group Inc | PEG | 3.16% |
Consolidated Edison Inc | ED | 2.98% |
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