Replies to post #8529 on Zeev's Turnips Patch-No Politics (ZEEV)

[KyrosL]

ILA's dividend is now 70 cents. It was cut recently a week or two after the company assured investors it was safe. It is withdrawing from the energy trading business, which comprised 50% of its profits. It is tangled with a cash burning telecom business. Its management and BOD have lost credibility. For example, they got some exorbitant bonuses earlier this year for the "success" of the trading business. There was a WSJ article about them a day or two ago.

Still, it probably is a bargain down here, but I think there are safer bets among the power producers.

Kyros

[Zeev Hed]

The whole group is weak, and I believe there are two main concerns, these companies need to roll over short term debt, and it is possible that that may not be possible (many high debt companies are hit hard like TYC and of curse the like of ILA, WMB, DYN, MIR etc), downgrading of the debt of sme of these companies influence all of them, and if they cannot roll over short tem debt they'll be in big trouble. The second thing is possibly the fact that many may have over built (I tried to read MIR financials they have some 22,000 Megawatt on line but another 6000 Megawatt under construction or committed to), and thus the returns on existing facilities may drop if what they sell becomes cheaper than what they plan they can sell for, causing write down of assets (an effect at the roots of WCOM demise). At this time, there is no enough transparency (without extensive study of each situation) to determine who will be a survivor and who not. All, IMTO, of course.

Zeev

[Bruce A Thompson]

Realist,

I just pulled the Whole Enchilada from ZACK's and they say the book value of ILA is a whopping $22.00 per share!

http://my.zacks.com/reports/reports.php3?ticker=ILA&type=100

I am still reading. Thanks for the heads up.

BT