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