Stock Evaluation, EXC
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Stock Evaluation, EXC Tuesday, November 16, 2010 DAVE CUSTER PowerPoint PPT Presentation


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Stock Evaluation, EXC Tuesday, November 16, 2010 DAVE CUSTER. BIOGRAPHY. Sector: Utilities Industry: Diversified Utilities

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Stock Evaluation, EXC Tuesday, November 16, 2010 DAVE CUSTER

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Stock evaluation exc tuesday november 16 2010 dave custer

Stock Evaluation, EXC

Tuesday, November 16, 2010

DAVE CUSTER


Biography

BIOGRAPHY

  • Sector: Utilities

  • Industry: Diversified Utilities

  • A utility services holding company, through its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity to residential, commercial, industrial, and wholesale customers in northern Illinois.

  • Generates electricity from nuclear, fossil, and hydroelectric generation facilities.

  • Sells electricity and natural gas on retail basis to customers in southeastern Pennsylvania.

  • The company distributed electricity to approximately 3.8 million customers in northern Illinois and 1.6 million customers in southeastern Pennsylvania, as well as natural gas to 485,000 customers in Pennsylvania.


Overview

OVERVIEW

  • Purchase Price: $43.61

    • Purchased 50 shares on 3-25-2010

      • $3.44 (7.89%) loss per share: $172.00 total loss on current EXC holdings

      • Holding value: $2,008.50

  • Last Trade: $40.17

  • 52wk Range: $16.78 - 51.98

  • 1y Target Est: $42.09

  • Volume: 4,358,393

  • AvgVol (3m): 4,508,510

  • Market Cap: 26.57B

  • Beta: 0.57

  • EPS: $3.95

  • Div yield: $2.10 (5.20%)


3 25 2010 11 15 2010

3/25/2010 – 11/15/2010


Current events

CURRENT EVENTS

  • Exelon Plans Nearly $5 Billion Investment in Affordable Clean Energy Projects to Advance Low-Carbon Roadmap

  • Exelon and ETA Agree to Develop Reliability Interregional Transmission Extension (RITE) Line

  • Exelon Announces Solid Third Quarter Results; Revises Guidance Range Upward for Full Year 2010 Earnings (Oct 22-2010)

  • Support for nuclear power is at an all time high of 62%

  • High prices for coal, oil, and natural gas will cause increase for shift to energy


Ratios valuation

RATIOS & VALUATION


Sector industry analysis

SECTOR & INDUSTRY ANALYSIS


Competitors

COMPETITORS


Exc price vs s p500

EXC Price vs. S&P500


Analyst info

ANALYST INFO

  • Fair Value Estimate: $67.00

  • Consider Buying: $46.90

  • Consider Selling: $93.80

  • Fair Value Uncertainty: Medium

  • Economic Moat: Wide

  • Stewardship Grade: B

  • Growth: C

  • Profitability: B

  • Morningstar Credit RatingBBB+


Recommendations

RECOMMENDATIONS

  • Very well positioned to benefit from carbon caps.

  • Potentially look into companies developing nuclear energy means at higher rates in foreign countries

    • France: 80% of electricity from nuclear energy

    • South Korea: increasing its number of reactors by 50% and will eventually be generating over half of its electricity from nuclear sources

    • United Arab Emirates, the third largest oil exporter in the world, has proposed construction for 11 nuclear power plants

    • India: 6 plants under construction and another 23 on the way

    • China: major energy need in the coming decade and nuclear power plants will play a major role over there.  Last month, China made a big public announcement that they were going to buy a bunch of yellowcake this year and in the years to come.  They’re planning to build at least 60 new nuclear reactors in the coming decade and have proposals to build 120 more.


Recommendations1

RECOMMENDATIONS

  • Over 90% of their power plants are nuclear and they operate the largest fleet in the nation and third largest in the world.  It’s a pure play on the energy generation side, a way to take advantage of rising U.S. demand for nuclear power should that someday happen.

  • Only have about $11 billion of long term debt against $25 billion worth of power plants and another $25 billion of cash, receivables, and other assets

  • Strong operating margins underscoring the efficiency of nuclear power in general and their plants in particular

  • SHORT TERM: SELL, as prices continue to drop and there is no immediate

  • LONG TERM: HOLD, based on estimates for future demand of energy/uranium and “green” alternative


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