At the time of
the financial panic of September, 2008, I had a substantial amount of money in a money market fund. The fund was used to maintain my cash position with my brokerage company. Yes, the fund dropped below $1.00, due to investments in Lehman. The treasury DID NOT STEP IN to do anything. Eventually the money was recovered at $.96 per dollar, and after a couple of years the brokerage company made up the difference.
Utilities are projected to make large investments in infrastructure, according to this paper at Robert Baird. This suggests, to me, lots of business for Itron. I wonder if the analyst at Baird, the one who downgraded Itron, was aware of this report.
Looking Down the Road
Persistent unemployment, significant new natural gas supply in North America, an old and capacity-stretched infrastructure system and pending environmental regulations could refuel efforts to establish federal policy for U.S. infrastructure in 2011. Grasping this unique set of challenges and uncertainties, stakeholders could be catalyzed to reaccelerate infrastructure investment. Baird’s expected timeline:
Near term (now through 2012) — EPS growth is expected to remain subdued except for water utility companies that continue to invest in infrastructure. With significant federal policy uncertainties, electric and natural gas infrastructure investment will likely remain curtailed. Similar to past cycles, potential EPA action by next spring could get infrastructure investment rolling by 2012, helping to once again provide an investable sector theme.
Long term (post-2012) — accelerating electric and NG infrastructure investment is expected to boost EPS growth to attractive levels. Over the next 10 years, EPS growth averaging 5–8% should fuel attractive total returns as utility companies accelerate infrastructure investment. Pending EPA environmental rulings could prompt the retirement of 40–60 GWs of U.S. coal-fired generation. An estimated $1 trillion in infrastructure investment is needed to improve and maintain reliability, meet customer needs and comply with increased environmental standards in the next 10 years. Estimated water infrastructure needs total $100 billion, natural gas $100 billion and electric infrastructure more than $700 billion.
Convergence of water, natural gas and electric infrastructure investment could provide an uplift to capital expenditure forecasts. Similar to the increased interdependence of the natural gas and electric sectors once natural gas became an important fuel source for electric generation, we expect water supply concerns and challenges to fuel additional infrastructure investment opportunities in the future for water, electric and natural gas utilities. This convergence could expand infrastructure investment needs as stakeholders evaluate total system solutions, including supply, storage, efficiency, conservation, recycling, and improved system reliability and optionality.
I also could not find Robert W Baird on a list of star analysts.
Seeking Alpha had a strong endorsement of this company, yesterday, with a one year target price of $73.
S&P gives the company a 4 star rating with a one year target price of $72.
There seems to be a difference on the reference point for comparing Order Backlogs. Management seems to believe it has increased.
Quoting Management: Commenting on the results for the second quarter, Jacobs President and CEO Craig L. Martin stated, “Performance in the second quarter improved nicely. Our earnings and backlog are both up from the first quarter, and the outlook remains positive. Several of our markets continue to improve and our prospect list is growing.”
"...the effects of the government stimulus passes and austerity measures take hold across the globe."
This is Goldman's reason for recommending a "sell" on ITRI.
STRANGE. According to Goldman, the austerity will cause ITRI stock price to drop, but will not affect all of the other stocks, whose prices continue to advance strongly.
Of course someone, more than one, knew. Yesterday's performance was a clue. The real question is: In view of no negative news or impending problems, what does Goldman know to lead them to a "sell" rating?
" ...market that goes straight up for 9 months in a row - week after week - day after day - hour after hour, with never taking a breath..."
I do not know what market you are looking at. The S&P peaked at about 1220 last April, 7 months ago, and dropped to below 1020 in July, 4 months ago, then an intermediate peak of 1120 in August and a drop to 1050 in September, and then up to today at about 1220, about the same as where it was in April.
Think about the logic of your decisions. You want to buy because you believe it is a good company and expect the stock price will increase. However, you are waiting for the price to decrease? If you are correct in your assessment of the company's prospects, why would the price decrease? The only reason the price would decrease would be because you are not correct, in which case it would not be a good purchase.
You CANNOT lose money when you write calls.
Loss is then amount invested in stock less any premium recieved.
"I would have been down more if I didn't write the calls."
By "down more" I think you mean lose more. At least you acknowledge that you can lose money by the covered call strategy, although somwhat less than you would have otherwise.
I did not give an example, I stated a fact. If KLIC price drops below $5.56, you will lose money (according to my definition). I am not trying to argue a point, I am trying to help you understand the underlying mathematical theory of dealing with covered calls. Unless you obtain a fair, or better, premium for writing the call, selling calls is not a winning proposition. My application determines the PROBABILITY of your retutn, based on several factors, including the premium, the stock volatility, the current price, the strike price, expiration date, etc.
"You CANNOT lose money when you write calls. "
Depends on how you define "lose money." If KLIC price drops below $5.56 per share, your assets will be less than your original investment. That's one definition. If you define "lose money" as "you never lose money until you sell", as some people do when their original investment declines from the purchas price, than yes, you CANNOT lose money.
Since the closing price was very close to the strike price, probability of call is 0.5.
Your probability of losing money on the call transaction is 0.38.
Fair value of the call option at closing price is $0.44.
You are OK on the Put option, fair value at closing price is $0.35.
How do I know this? I developed a program to evaluate expected returns for selling covered calls.
"AMED is guilty of Greed."
And so is everyone else who is reading these messages and owns shares of this company. AMED is providing a service, and I want them to do the best job that they can do, and to earn as much money as they can. Legally of course.
As far as I can tell, the other companies have not received similar requests from DOJ.
"Civil investigation demands may be forthcoming for the other companies as well, given the reviews by the SEC and the Senate Committee, said Kevin Campbell, an analyst at Avondale Partners."
KLIC was uo 5.77% today, NASDAQ was up 4.81%, both pretty good numbers. But what I think you meant to say was KLIC rises MORE than NASDAQ.
a 4%+ reduction in 2011 Medicare reimbursement rates
You make some valid points.
The reimbursement "rate", is the amount per client, and as you noted, the number of clients is likely to increase due to the increased number of insured people.
Also, Amed earns income from sources other than Medicare reimbursements. How will this income be affected?
I was just wondering if you had a good reason to believe that they are overbilling.
The guy refuses to answer the question. Clearly he has no evidence, or any reason, whatsoever. His irrelevant remarks about an estimated reduction of reimbursements shows he did not read or understand the explanation of the projection. Just nonsense dribble.
The downgrading analyst says "Amedisys said its reimbursement rates will decline 4.2 percent in 2011, compared to their levels in 2010."
The analyst did not say that, notwithstanding the quotes. The Associated Press, in reporting on the downgrade, said Amedisys said its reimbursement rate... 4.2 percent...The AP did say the the analyst said the company confirmed the just-passed health care legislation will take a larger chunk of its Medicare reimbursement rates.
I can not find information where the company confirmed anything!
Also note the analyst, Jerry Doctrow, recently took over the job from Eric Gommel, who is still listed on the Amedisys web site as the analyst at Stifel.
I am looking at the daily price chart for this company, and I do not see what you seem to be viewing. What I see is price increases and decreases within a narrow horizontal channel between about 6.5 and 7.5, since about mid February, after a steep rise from below 5. Technical analysis suggests a breakout from this channel,especially on high volume, above or below the defined boundaries, indicates the next trend.