FE is the recipient now of the herd theory.
It languished for a long time.
Its probably near where it should be.
And will probably overshoot where it should be.
That's the market.
Smart people tell you the market is always right.
I'd say the market is always reacting to news, and thanks to flash boys, shorts, and leverages, its very seldom correct, on any given day.
Best way to get a peek behind the analyst's curtain is to listen to their questions on quarterly and annual earnings calls. If they are hot on any topic, they are not bashful about asking questions. The accuracy of their models relies on getting the best info they can. Good discussion.
Sorry shortie you lose this time - div. announcement didn't create the pull back you were expecting - our long turn to LOL and collect the .36 cents as we past GO
Go - Go - First Energy - Go , keep chugging along.
And, I've had even better success with my 12 year investment in Xcel Energy stock. One needs to have conservative investments like utilities, FE and Xcel, in their portfolios for diversification and good, steady, and long term investment results. Utility stocks haven't made me rich, but they've done very well by me.
BTW, what did help to make me rich was the reinvestment of the dividends in to many other stocks/bonds/munis/mlp....etc.
Usdominator, you are correct. Except for a huge upward move to the $80 range and then a fall back to around $40 a share, the FE chart does look as though it has flat lined over the past 25 years. Not too much to see in FE's pps gains over the years, they don't exist. However, there's also another way of looking at an investment, other than the pps performance.
I have been a FE shareholder since the early 1990's, when the company went by the name of Ohio Edison. I was lucky and bought my shares for between $15-$21 a share. I ended up with a little more than 2,200 shares. What I really wanted from OE/FE was the nice dividend payout over the years. Not only was the payout much higher than offered by other financial investments, such as CD's, bank interest, treasuries.......etc.......... the dividend payouts were taxed at an advantageous tax rate, and not as ordinary income.
So, let me look back at my flat line investment, over the past 25 years. While I don't have the exact figures, my cost basis in OE/FE was about $40k and the current value of the shares is about $88k. Not great, but satisfactory for a stodgy utility investment. Furthermore, until recently, FE was paying me over $4,800 a year in dividends. During the 25 years I owned FE, my dividend payout was around $100k and covered the cost basis of my shares by a factor of about 2.5 to 1. If you look at it that way, I essentially got the shares for free.
Finally, I don't plan on cashing in my shares, I don't need the money. So I'll continue taking the divvy payouts and leave the shares to my heirs, thus avoiding any capital gains on the capital appreciation that I made on my OE/FE investment. All I can say is that I haven't become rich from my FE investment, but I'm satisfied.
You're right - take a look at the long term chart. That looks great too, kind of like a flat line on a EKG machine with a downward slope.
Sentiment: Strong Sell
Oh and then there's the matter of debt ratings.... Here's an excerpt from Moodys FE rating action from 15 July 2014. Notice the specific reference to the JCP&L rate case. If Moodys or one of the others changes their ratings, then that might wake up the analysts and big media.
@@@@@OUTLOOK The stable outlook on FE reflects our expectations for an improving financial profile over the next 2-3 years, driven by strong capacity pricing, deferred tax benefits, stabilizing conditions in the merchant power sector and a focus on regulated rate base driven investments. The outlook on all of FE's utilities, except JCP&L, is stable, reflecting our expectations for stable cash flows and continued credit supportive regulatory relationships at these utilities.
WHAT COULD CHANGE RATING -- UP Prospects for any upside movement in ratings at FE or its utility subsidiaries are currently limited. An upgrade for FE will require a substantial and sustained improvement in FE's financial profile, which would likely be predicated on deleveraging or a major turnaround in merchant cash flows. Improvement in the ratings of FE's utilities is also dependent upon a strengthening of their individual financial profiles.
WHAT COULD CHANGE RATING -- DOWN Downside risk could arise from a deterioration in the regulatory environment at any of its utilities or a weakening of financial metrics. A renewed downturn for the merchant industry, although not expected at this point, that significantly weakens the consolidated credit profile may also cause a downgrade. An unfavorable rate case outcome in New Jersey could trigger a rating downgrade at JCP&L. A downgrade of JCP&L is likely if expectations for future CFO pre-W/C to debt and CFO pre-W/C interest coverage fell further to about 10% and 3.0x, respectively.
Agree on 1. Not sure about 2. since I only see the comments as posted by various public websites like benzinga , thestreet etc and that was never spelled out. As far as 3. I saw specific references to this case in previous analyst comments, so if it was significant then I'd expect it to still be now. I guess alot of this is just spin spin spin.
To your question on the analysts. 1) They know the issue isn't totally resolved just because of the judge's ruling. 2) This judge's ruling may be better than what the analysts had in their financial models. 3) FE is quite a bit bigger than just JCPL.
It appears a ruling was issued last week. So where is the press release from JCP&L on this? Where are the analysts on this? Not a peep out of them or mainstream media which is usually gung-ho on reporting utilituy rate cases.
@@@@@1 million JCP&L customers could see big savings after judge rules against utility
Well it's Dec 31 and I don't see any decision posted on the NJ OAL website. Either the staff there are on holiday or the judge did not issue a ruling.... in which case he must have received yet another 45 day extension from the NJ BPU.
I wonder... is he ill or did FE liewyers hand out grimy cash-filled envelopes to the appropriate characters standing in the backdoor entrances of the relevant offices.
Thanks for the thoughts blackoutbuzz. Maybe the repubs will send some obummers czars packing.
This " growing " economy is built on empty egg cartons . I may miss a dollar or two but I'm ready to take some profits off the table here.
Not even Morningstar directly addresses the pending JCP&L rate case decision but they do at least mention regulatory decisions as a risk in their report on the Ohio settlement news out a couple of days ago..
@@@@FirstEnergy Refocuses on Regulated Operations Several years of depressed power prices have challenged its deregulated businesses. By Charles Fishman, CFA | 12-26-14 | 06:00 AM | Email Article
Our fair value estimate for FirstEnergy (FE) is unchanged following the company's filing of a settlement agreement with the Public Utilities Commission of Ohio for the Powering Ohio's Progress plan originally proposed in August. The proposed settlement has 15 signatories, including the city of Akron, Ohio Energy Group, business groups, and universities. Changes from the original proposal included $23 million in economic development and energy efficiency grants and $7 million to help low-income customers pay their electric bills. The agreement does not change our narrow Morningstar Economic Moat Rating.Regulatory Decisions and Power Prices Hold Risk FirstEnergy's 10 regulated utilities and FERC-regulated transmission business have experienced, for the most part, constructive regulatory decisions. However, because of the depressed earnings contribution from the unregulated competitive energy services segment, regulated businesses now represent more than 90% of consolidated earnings, and an adverse decision from regulators would negatively affect earnings and cash flow. Unconstructive regulatory decisions are more likely in a period of rising electricity rates, an event that would probably occur with increasing natural gas prices and coal plant retirements.
Here's my take since I don't have a lot of trust in analysts
Positives: Higher PJM auction rates in 2015-16, a growing economy, push towards regulated transmission
Negatives: Interest rates set to increase, likely negative ruling on JCP&L rate case, EPA push to reduce coal generation
Funny how there's no mention of the JCP&L rate case a judge is supposed to rule on by Dec 29 huh...
@@@@@NEW YORK (TheStreet) -- Jefferies raised its price target today for the Ohio-based diversified energy company FirstEnergy Corp. (FE) to $47 from $45 and maintained its "buy" rating. "We find FE shares to be attractive, trading at a P/E discount to our utility group average multiple," Jefferies said. The firm also increased its 2015 EPS estimate by 10 cents to $2.85 to reflect assumed rate relief in Pennsylvania.
Its been about a day, sine they've last bashed FE.
And its still going up.
Look at their earnings from a year and a half ago to 3 years ago.
Now compare their estimated earnings for 2015 to those earlier earnings.
And look at the stock price back then,
earnings are up nicely.
they are projected to stay up through at least 2015.
You'll soon see FE is still undervalued.
We still have to worry about future interest rate hikes and lower energy costs hurt earnings.
I'm not sure why lower energy hurts energy companies. Yes, they will lower revenues, but energy costs shouldn't have any affect on their earnings, in a perfect world.
yet if you didn't buy 3 months ago, you'd be out 5 dollars a share.
stay tuned for their next attack, and I'll be ready to tell you what is really happening, vs their biased negative view.
By the way, I'm now making money on my highest FE purchase, something I thought woudnt happen for another year.
Keep posting realist.
You know, maybe market realist is code, and people seeing the negative bias are being told to buy.
Whatever is happening, its making the market realist look pretty stupid. almost as bad as cramers last 3 , late calls.
nhat earnings have rebounded.
the market realist keeps living in the past.
when you invest, base it on how they are doing now, not 3 quarters ago.
someone keeps belittling this stock.
I'd be wary of by whom, and why.
I do own a small amount of shares.
but I see the realist as trying to scare people, with ancient history.
the realist. 5 bashing posts.
if it had half the class as seeking alpha, they would have done one story abut everything.
and it still would have been dated info.
what are they going to rehash next, converting from coal ?
to me, it looks like someone wants the price lower, so they can scoop some up, as it rises.
the realist, in its fe bashing, is saying cramer Knows nothing. he knows nothing.