They are paying 77% now so all is not lost , the storm damage of the last two years has cut net earnings and piled on some debt while there was revenue growth FE receives no credit for . With all the acquisitions it is time to evaluate and trim off underperforming assets to retire debt and continue to fund the dividend or omit it and retire some shares ( have not read the revolver terms but FE has a solid credit rating ) . There is no doubt in my mind their service territories are some of the best in the Nation and also have been among hardest hit during this latest economic turndown . The rebound in the stock market has started to impact investment and the economy in a positive way . Expect to see FE bounce along here and respond with a better PPS as soon as the company announces a restructuring , retires some of the 2 billion drawdown on the revolver and demand for electricity increases as the economy returns to growth . Even back in the Financial Dunkirk Years investors in Utilities faired pretty well on a total return basis in relation to money in a savings account . All and all FE should continue to provide its normal historic 13 % total return . The time to buy is at low points not the top and we are closer to the bottom then the top now I think we can all agree on that . Have a great day , only long term money that can park for 5 years or longer should play . When the institutions enter again we will see the old highs within a few years . Everything points to a bottom here but we all know the market overshoots all reasonable bottoms . That is why we buy a little at a time on pronounced weakness spread out overtime when accumulating new shares .
I would be more interested in hearing about any news on the accounting in China . I know some of those brands Cooper Invested in have been around a long time distributing to the US and will definitely print money when the economy picks up again . Coopers balance sheet and metrics outshine those of GT IMHO . The venture into new automobile sales is very exciting .
I have held a few shares for many years . Not enough to worry about the fall from 35 . I really believe in Cooper Tire and I believe they are worth more then 35 in two years on their own if they can put this all behind them . I would not sell one share down here and myself am planning on starting to add a little to my position through Christmas. I think CTB will get a very nice benefit from what is known as the January Effect in small caps . I imagine with the deal the board could not raise the dividend next quarter look for just that if no deal materializes . CTB should be one of the better performers in 2014 . FE is saying their having to drop electric prices and petroleum products have been falling . They have CTB making $4 a share in 2015 at S&P . Apollo choked and will be sorry sooner then later .
We have young management making their mark and their fortune . They are holding shares just like us . They also have the benefit of some experienced hands to help them .
How does the sale of more stock fit into your thinking ? I am wondering if shareholders dilution will be more then offset by interest savings as well as increased revenues the ships will bring . I am sure that is what management thinks and the business model has proved out over time . I am sure as the market tightens some older members of the fleet will again find new homes . However for 2015 53 ships will represent growth in the fleet of nearly 60% from the size of the fleet at IPO if my memory serves me well . I believe we started with 31 ships or very close to that figure . I see the traders punishing the stock for the dilution they perceive anyone see any positives ?
Some very good analysts say the dividend is safe S and P is one . CX was my first stock which was acquired at a nice profit by FE . Over the years I have added to the position and collected 20 years of dividends between CX and FE . My electric use has been climbing between household electronics , and transportation vehicles . Meanwhile stranded energy is being reduced by power companies increasing efficiency . FE has a vast territory in a area of the Country that has been among the most severely effected by the recession . The payout rate is historically on par with where it was back in the 80's with S and P expecting increases to begin again post 2015 . It is early so patience is warranted but the downside is much much less then the upside potential if you have a need for income and at least a 5 year horizon . If the market were to crash I believe this stock would hold up well . I expect the penalties for coal will eventually be abated as more stranded energy and efficient less expensive scrubbers are available overtime . FE holds some very exciting patents especially those that came from Cinci Power on transmission of tv through electrical wires that are given no value . I am usually early on value picks like this . I purchased my first shaes in years this week at 34 . I have also been watching some turnarounds gathering momentum like AA and BAC . Here I think tax selling will continue through years end and the first week or two of the New Year . After that I think we start the climb back to $38 .
I imagine there will be tax selling right through into the first quarter . When the pullback happens these shares should be fairly solid and paying a nice yield for those that have been averaging down from the new lows . I was trying to remember what the yield on these was back in 81-82 . Anyone remember ? backed into this initially through CX . I am always too early and in step with that thought have added a small percentage down here believing in FE long term to recover as the businesses in it's territory have already begun to do . It has to trickle down to retail soon and were getting cold weather to help too . If only the storm damage would stop the last few years have been terrible .
I feel pretty strong about slowly acquiring shares if we hit $35 again . Look at their main customers in Ohio and Pa . WOR out of Columbus is strong , so is Cooper Tire CTP and Carp Steel . The business cycle for corporate customers in their main markets has seemed to hit bottom and is poised to run in spite of the terrible expectations being expressed going forward . My father used to tell me about some unique patents they hold in transferring data via the grid too from cinci power . I am not sure were going to see inflation over a period like Japan went through . I do not like the debt load but to me it looks like they are really lowering expectations below what we will actually see moving forward . I like that they are not heavy into oil and gas like DTE as I envision more stored electrical use . So many changes are happening in the areas of Stranded Power and Renewable Energy that could surprise even insiders . It has hurt if you rode this down from old time highs but to me it feels like were closer to a bottom now in FE . What Ohio Pa and NY businesses can you say are going to decline moving forward instead of improve ? In a flat economy 6% will be golden .
I doubt the stock will return to the price before the offer as it now has received much attention and frankly even though this is a cyclical industry that is mellowing with the moves management has made . We are seeing some softening in material costs and earnings for 2015 are forcasted at over $4 per share . They beat by over 10% last year coming in at over $3 . Debt is being retired , cash is on the sheets and S and P has a buy on the stock with a $33 price target on merits without the offer in the next year . I have been around this for a long time just taking the dividend off a current $12 cost basis . I had planned on the cash but I sure will not vote for a reduced offer . Sadly Apollo took on more then they could handle and Cooper Management didn't nail down a breakup fee . Cooper should just go about their business without spending out of pocket to deal with Apollo and let the deal fall through if they hesitate . It is their loss and the stock will be $40 in three years .Long term shareholders will be better off to just hold and watch the company grow if Apollo doesn't want to pay a premium now to reap larger rewards overtime 10 years down the road . If anything I would add to positions under $25 for a 2015 PE just higher then 6 with all the other good metrics ctb has since selling off the parts business , cleaning up the sheets and applying the great cash flow to debt .
This company has so many things going for it from valuation to forcasted earnings and revenue growth for the next 3 years . Goldman announced it to the world but if the current storm hits the Gulf hard especially the refineries in La we could get a nice short term discount with a pop when things settle out . With the USA a net exporter of crude products now and that increasing along with the demand for asphalt this should be a nice safe gainer with a decent growing dividend overtime . MPC has the largest asphalt production domestic base in the United States . As the economy improves our roads must be repaired and this company is first in line . Strong buy on days of weakness . Time to take some losses or topped out gains if you have any and put a little money back in here . A stock moving up is a great trading stock .