03/21/11 - 17 "Domestic" Utility Companies - AEE, AEP, CNP, D, DUK, ED, ETR, EXC, FE, GXP, NEE, PCG, PEG, PPL, SCG, SO & WR

03/21/11 - 17 Energy Companies - AEE, AEP, CNP, D, DUK, ED, ETR, EXC, FE, GXP, NEE, PCG, PEG, PPL, SCG, SO & WR


We send best wishes to the people impacted by the earthquake and Tsunami. You are in our daily thoughts and I have a great deal of sympathy having been in numerous natural disasters and large earthquakes. Our friends in Japan are strong and have proven to be resilient. Last week we received a message from one of our close friends in Japan asking how they could "benefit" from the situation.

"Benefit" is a sensitive work but we understood their meaning. As fellow investors we began to look for market anomalies and over reactions. The most obvious sector was nuclear. This involves nuclear power plant owners, operators and mining operations. The power sectors were more evident than the mining companies. We are continuing our work on the mining companies, however, we doubt that any of it will appear on this blog because at this point any investments in this sector appear to be far too speculative.

As for nuclear power we provide this short primmer:

Nuclear power provides about 6% of the worlds energy. Not all of the energy produced is used for electricity. However, the 441 worldwide nuclear power plants provide 13-16% of the worlds electricity (depending on the information source). The U.S., France and Japan collectively rely on 50% of the electricity generated by nuclear energy. The U.S. tops the list of nuclear energy generation. Electricity generated by nuclear varies by country. France leads with 80%, the EU with 30% and the US at 19% of electricity from nuclear generation.

We chose to focus our efforts on the US market. The reasons are rather simple, we are mostly dollar based investors, our liabilities are based in dollars and the liquidity of the spot and options markets are important.

Not all the listed companies are directly involved in nuclear energy. However, all are involved in electricity, either generation, plant operation or transmission.


Nuclear power accounted for about 20% of the total net electricity generated in the United States in 2008, about as much as the electricity used in California, Texas, and New York, the three States with the most people. In 2008, there were 66 nuclear power plants (composed of 104 licensed nuclear reactors) throughout the United States. Most of the reactors are east of the Mississippi. The last new reactor to enter commercial service in the United States was the Tennessee Valley Authority’s Watts Bar 1 in Tennessee in 1996.

Owners and operators of U.S. civilian nuclear power reactors purchased the equivalent of 53 million pounds of uranium during 2008. Uranium delivered to U.S. reactors in 2008 came from six continents:
14% of delivered uranium came from the United States
86% of delivered uranium was of foreign-origin:
42% was from Australia and Canada
33% originated in Kazakhstan, Russia and Uzbekistan
11% came from Brazil, Czech Republic, Namibia, Niger, South Africa, and the United Kingdom. (source U.S. Energy Information Administration)


This analysis was performed at the market close of March 21, 2011.
The VIX closed at 20.61.
The S&P 500 closed at 1,298.38.



Symbol Name Market Cap

AEE Ameren Corporation - $ 6.6 B -

AEP American Electric Power - $16.4 B -

CNP CenterPoint Energy Inc - $ 7.3 B - #1 overall profile for this group - low end of market cap - primarily a transmission company - RVI's are high - dividend payment early May.

D Dominion Resources, Inc - $25.8 B -

DUK Duke Energy - $23.6 B -

ED Consolidated Edison, Inc- $14.6 B - # 3 overall for this group - legacy operator and now energy distrobutor and operator.

ETR Entergy Corporation - $11.8 B -

EXC Exelon Corporation - $26.7 B -

FE FirstEnergy Corp - $11.2 B -

GXP Great Plains Energy Inc - $ 2.6 B -

NEE NextEra Energy Inc - $22.6 B -

PCG PG & E Corp - $17.4 B -

PEG Public Service Entp Grp - $15.6 B - #2 overall/#1 in SSR for this group - Low RVI's but the stock stays in a narrow range -

PPL PP&L Industries - $12.0 B -

SCG SCANA Corp - $ 5.0 B -

SO The Southern Company - $31.6 B -

WR Westar Energy, Inc - $ 3.0 B -




This analysis was performed while the market was open throughout the day of March 16, 2011.
The VIX ranged throughout the day between 24.04 and 31.28 closing at 29.40.
The S&P 500 ranged throughout the day between1,249.05 and 1,280.91 closing at1,256.88.














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As with everything we post, we may or may not have the stock and/or strategy in place in any one of our portfolios or may add it at any time. We do not make any buy or sell recommendations. We provide basic analytical research, some short commentary of the results and encourage you to do your own thorough due diligence prior to any purchase or sale.