Honestly Finster, do you ever tire of being wrong? One bonehead call after the other, do you have no shame? One would think you would hide in disgrace but instead you have the audacity to keep posting your BTU nonsense. Let's just hope readers simply view you as a buffoon like I do and do not trade on your advice. Keep the laughs coming! Oh, and keep deleting your truly idiotic posts of the past, that proved so painfully wrong, you wouldn't want anyone exposing you for the fool you are.
XOM remains very expensive, wait for a better entry point.
Republicans in Congress the past 7 years have been pivotal in making this body of our govt the most unproductive, divisive in our nation's history via their stonewalling and filibustering. These obstructionists have bought critical legislation to a halt at a time our nation is in desperate need of moving forward. The GOP agenda is clear, maintain the status quo, the corrupt plutocracy, to continue to be in bed with Wall Street and the bank lobbies, the corporate polluters, remove all regulation at the expense of our children's future, the environment, the long-term health of our economy. It is for these reasons and many many more it would be in the best interest of our citizens if these bought and paid for politicians are removed from office immediately.
When EXC was trading near $38 I posted I no longer saw value at this level and was selling to reenter at a lower price. Well that time has come. Now the question is why do I see value at $32.60?
EXC is presently trading not far from book value and debt levels are quite low compared to the majority of other utilities. I believe earnings will rise to close to $2.60 next year as recent acquisitions come to fruition. This gives EXC a future PE of 12.5 in a market that is now averaging a PE of close to 18. Add a 3.8% dividend to the mix and I think it is a good time to purchase EXC.
The recent weakness, and I suppose weakness is understatement considering EXC is down 15% from recent highs, is in response to mediocre earnings and the perception by the Wall Street Gods that interest rates will be rising significantly in the coming months. The latter point is critical. I am of the opinion if rates do rise it will be much more modest that the street consensus My reasoning is oil prices are set for a second leg down as storage in Cushion, Oklahoma fast approaches full capacity. When this occurs, probably by next month, I see crude falling to $35, this will not only prove to be deflationary but make the geopolitical issues in Russia and the Middle East that much more volatile, not to mention the specter of bond defaults in the oil sector will rise dramatically, nearly 20% of the junk bond market is oil related. So I actually think rates will ultimately fall not rise from these levels in the coming months as this plays out. Good news for the entire utility sector. This of course is a big if, but I don't see how rates rise much higher regardless considering other industrialized countries yields continue to be negative.
In summary, my buy recommendation is based on current valuation and the belief interest rates will remain tame for some time to come. Longer term I like EXC because I believe some form of a carbon tax is inevitable as Man-Made warming intensifies
The CEO of XOM should be imprisoned as a traitor.
Today's action alone indicates BTU is a very hot commodity, soon to be bought out for well over $55 a share.
NO bigger traitor to our country than XOM!
With republicans in control, zero chance of any type of carbon tax and nat gas prices will remain low for quite some time, not good. EXC fast approaching a 12 PE, one would think the bleeding is close to stopping based on valuation alone. My guess is this run-up in interest rates will be short-lived, if not, EXC could possibly drop to 31 and change.
Healthcare is severely broken in this country and the reason being there are zero free market forces working in this space. We have two competing forces, one Medicaid, the other those who choose to purchase insurance for their potential long-term healthcare needs. Anytime the taxpayers pay the bills there is rampant fraud and overcharging, healthcare cost skyrocket. If individuals are responsible for their care, costs remain in check, the free market works. Under the present system those who have the scruples to pay their way, are not only covering the costs of their own care but paying for those on Medicaid via taxes, rising deficits. Plus they are coughing up huge sums of money in the form of rising premiums due to runaway costs associated with a socialist system. 100% of Long-Term care premiums should be tax deductible! Those who are doing the right thing by purchasing Long-Term Care are being severely penalized, those who rely on govt handouts are making out like bandits.
Coal consumption in the United States has been in steady decline as nat gas, green energy sources take the forefront. Both China and India have pledged to reduce foreign coal imports and develop their own coal resources in the coming years. India in fact stated they want to reduce coal imports completely by 2017. China imposed a coal import tariff last year.
This does not bode well for BTU which leveraged it's balance sheet developing Australian coal assets in anticipation of stronger demand from emerging markets. Their timing could not had been worse for BTU shareholders. Throw in the reality green energy alternatives are being developed and utilized quickly, the outlook for dirty coal grows dimmer by the day.
Some had pointed towards Germany's development of coal fired power plants as a beacon of hope, but that is purely politics and the strong coal lobbies in that country at work and does not represent a trend.
BTU recently eliminating it's dividend has given the stock a very modest pop, but does not change the outlook. I foresee BTU falling to the 4s and trading like an option. The republican party can only hold America hostage for so long propping up their campaign contributors, eventually the environmental and health consequences of dirty coal will be too great for even the GOP to tolerate.
One of the reasons BTU has absolutely gotten slammed the past 24 months is because China's manufacturing sector is slowing considerably as it moves toward a more domestic driven economy. This combined with China's effort to utilize it's own coal resources has lessened the demand profile from foreign sources such as Australia, where BTU has leveraged it's production. Not sure where you are coming up with your Mexico numbers, coal represents only 5% of it's energy consumption, nat gas and petroleum dominates. India announced last year they have set a goal to stop all imports of coal within 2 to 3 years, develop their own coal deposits for domestic use. So your arguments do not hold water if your intent is to somehow paint BTU's future as bright.
At first glance it seems hugely hypocritical for Germany to be building new coal fired power plants and shuttering nuclear especially in light of Germany's green energy movement, their effort to fight both pollution and man-made global warming.
Nothing dirtier and more polluting than coal fired power plants, nuclear would offer a cleaner baseload energy source and be carbon free. So why the huge discrepancy? Simple...Germany like the United States has a huge coal lobby with powerful politicians on board (On the payroll so to speak). But this does not change the fact that coal is a dying industry and when the true costs of coal (Environmental damage, et cetera) are eventually fully recognized outfits such as BTU will be long gone.
So in summary, it is misleading to point towards Germany's construction of coal fired powered plants as some sort of renaissance for coal, it is driven by short-term politics and lobbies which is not sustainable.
Solar power is a complete nonfactor, natgas prices is the key. I see nat gas price stabilizing in this area, so the big driver for EXC in the near future are interest rates. My guess is EXC stock price settles in this area, not much upside until some form of a carbon tax is instituted. Which unfortunately will not happen as long as the caretakers of the fossil fuel industry (Republican Party) remain in control.
Earnings and Mgt's guidance was to say the least rather disappointing. Now I think EXC trades like a bond in the short-term, at the mercy of the direction of interest rates. Longer term it is all about nat gas prices, future carbon taxes. I am more positive on the latter, the glut in nat gas does not seem to subsiding. I realize the infrastructure to export LNG is moving along at a fairly good pace but until coal powered plants are mothballed, especially in the emerging markets I don't see nat gas prices moving much higher. Presently China, India are building a couple new coal powered plants a month, no surprise considering coal is cheap and they both have coal resources. My gut feeling on interest rates is the recent rise is a head fake and we head lower later in the year, which is definitely not the consensus on Wall Street. I believe the globe remains awash in overcapacity and the currency war are in the early stages which will push the U.S. dollar higher keeping inflation and rates contained. I also believe the Fed will raise rates but it will only be a symbolic gesture to move away from zero, it won't have much impact. But if my premise on interest rates prove to be wrong and yields continue to rise, all bets are off and EXC could easily fall to $30. Today's earnings did not provide much of a floor.
Appears Conrad was wrong this time, although I like the outlook for EXC longer term. Waiting to pull the trigger near 32.50
The power generated by nuclear competes with carbon fuel sources on the open market. If carbon fuel prices do not reflect the true costs to our environment then they are subsidized and puts nuclear generated power at a disadvantage, therefore hurting EXC's earnings.
Well I was planning on getting back in around the $33 level but after these disappointing earnings and interest rates rising I just might wait until $32. No need to rush in. EXC remains a merchant utility and until we see a spike in nat gas prices from these historic low levels or some form of a long overdue carbon tax, EXC will have a difficult time moving higher.
Strange you choose to post the same garbage via a number of different screennames. You are absolutely clueless with your ludicrous vendetta that EXC halt it's dividend in favor of paying down debt. As far as utilities go EXC's debt to equity ratio is quite good, free cash flow also quite strong. Debt in itself is not a bad thing, and an important part of growing a company. Utilities are historical capital intensive as they are constantly upgrading, expanding and servicing their production and grid. These historical low rates are a goldmine for utilities as they are able to lock in a large proportion of their capital needs for years to come. Companies that own dividend obligations, tend to make mgt more conservative and take a longer term view, less likely to overextend themselves, keep caught up in the frenzy of the moment that can quickly turn. Your arguments make ZERO sense in regards to EXC.