Moody's downgraded their outlook for ILA to "Negative" on Friday after the close. As a result, their stock got clobbered today to the tune of better than 23%. It closed at $17.10 today.
I bought and sold this one a number of times a few months ago while it was UtiliCorp and going through convulsions due to its re-acquisition of Quanta. Did well with options on it, too, but couldn't get any homeruns from it. When I got out of the market to devote my time and resources to Investors Hub, I bought a bit of it to keep in my long-term portfolio, as I liked the dividend.
Their dividend yield at today's closing price is 7.09%. I did extremely well buying IKN a while back when its yield got about 5% (sold most of the position not a whole lot later as a 4-bagger), but I also bought F (and still have every share) for its dividend just a day or two before they cut the dividend in half, which tanked their stock price.
So, I'm considering buying this one as a trading stock, but will tread carefully, as it wouldn't surprise me if their next cost-cutting move is to slash the dividend.
Moody's says they've got problems. ILA says they don't and things are getting better (though their earnings confession was very disappointing), so I don't know who's right. It could be another ENE in the making (without the fraud, hopefully) or it could just be a heckuva deal right now. But either way, it seems to me this is going to be a wonderful trading stock for a while both long and short.
Earnings are scheduled during market hours on 5/1/02, so I'm inclined to think it's a great short candidate right now to be partially covered right before they're halted for the earnings call, then depending on how the call goes, it could be good for a larger position either way.
If they don't announce during the call that they're cutting the dividend, I do believe I'll be loading up on the stock itself with a side of Jul15 calls, hold the mayo. The calls are cheap enough right now, I'm thinking about getting some of them tomorrow.
So, anyone out there follow this company and/or have an opinion on it?