my broker likes FE , any input would be appreciated,, i,m thinking about getting in,, seen talk here of merger?,, think the price is good to get in now??, how sure is the merger? would like to find a stock , to buy and hold,,
Several market analysts who follow the utility industry have been very bearish on FirstEnery Corp . One analyst, who asked to remain anonymous made the following comments, "overall, the utility industry was hit pretty hard in 2008 when the broader market started to decline. However, the stocks in utility companies with the best overall management in place have certainly declined the least. The executive management team at FirstEnergy has struggled with recognizing the difference between their anal cavity and a hole in the ground; and as a result, their stock has dropped over 50%."
Actually, FE was very clear. All the details are in their press release. Go to the IR center on their website to find it. Record date was the 7th. Payout date(s) depend on timing of the merger.
The merger is very sure and the market agrees. A lot of the recent gains are due to the merger having passed its approval hurdles. All the pundits were skeptical and that held down price through summer and into fall. So if you get in now, be prepared that the recent price gains may slow.
That said, this is a good place to be. Price is still depressed from FE's previous levels plus the merger brings the synergy of a generator and a transmission company combined. So there's a lot of upside here. Just don't expect it to arrive all at once or with no setbacks. There will be costs from combining the two companies and new regulations that FE needs to meet. It may take awhile before earnings start to reflect the potential of the combined companies. Meanwhile, if you drip the div, you'll be building a nice position. Utilities are usually considered a conservative investment and it's not often you get the chance to buy growth potential plus a nice dividend with relatively little downside risk. I'd say go for it.
FE has received all go signs for the merger except from PA, which has the agreement of the major parties invoved, so I would say at this point with the Fed & States saying yes, it is pretty much a sure thing. The Street dumped this stock when news came out publically about the merger last year. BUT institutions are now buying & have been buying with the anticpation of the merger now going through.
Day of merger the stock will bounce up 1-2 points. AYE is doing much better in terms of key financial metrics than FE. That is why FE bought them.
Stocks price in future earnings 6 months ahead.
IF they can get back to 08 earnings you will see $80ps again.