Calpine (CPN)

[Joe Stocks]

Commonname, I personal target for CPN for the end of 2007 is one times book value. Currently book is at about $8. Although they are selling off plants they are also reducing debt. That and some of the new plants that are coming on line should keep book about the same I would think. Once CPN can start showing consistent profits again we should then see a multiple based on earnings. The earnings potential is a shot in the dark for me. Personally I don't see much of an upside from the $8 based on earnings. At a 2% profit margin I see only about $.40 cents a share in earnings. Maybe we can do that by 2007 - I don't know. I think it will be tough. The street is looking for a 39 cent per share loss in 2006. I think CPN does much better than that with the reduction in interest expense and hopefully better spark spreads.

We will see.