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Top Analyst Upgrades and Downgrades (ANF, APD, AMZN, ACGL, BWLD, CSCO, GLW, ELN, ERJ, HES, JEC, LEAP, MOT, OGE, RY, SD, WBD)

Administrator — Mon, 06 Dec 2010 13:02:40 +0000

These are some of this Monday’s key analyst upgrades, downgrades, and initiations seen in Wall Street research calls.

Abercrombie & Fitch Co. (NYSE: ANF) Added to Goldman Sachs Conviction Buy List.
Air Products & Chemicals Inc. (NYSE: APD) Reiterated Buy and raised target to $105 at Jefferies.
Amazon.com Inc. (NASDAQ: AMZN) Reiterated Neutral but Raised Target to $165 at Credit Suisse.
Arch Capital Group (NASDAQ: ACGL) Cut to Underweight at JPMorgan.
Buffalo Wild Wings Inc. (NASDAQ: BWLD) Raised to Strong Buy at Raymond James.
Cisco Systems Inc. (NASDAQ: CSCO) Raised to Outperform at Oppenheimer.
Corning Inc. (NYSE: GLW) Reiterated Buy with $24 target at BofA/ML.
Elan Corp. plc (NYSE: ELN) Raised to Buy at UBS.
EMBRAER (NYSE: ERJ) Started as Buy at Goldman Sachs.
Hess Corporation (NYSE: HES) Raised to Market Weight and $80 target at Credit Suisse.
Jacobs Engineering Group Inc. (NYSE: JEC) Raised to Buy at Canaccord.
Leap Wireless International Inc. (NASDAQ: LEAP) Cut to Hold at Auriga.
Motorola Inc. (NYSE: MOT) Reiterated Buy at BofA/ML.
OGE Energy Corporation (NYSE: OGE) Started as Outperform at Wells Fargo.
Royal Bank of Canada (NYSE: RY) Cut to Market Perform at KBW.
Sandridge Energy, Inc. (NYSE: SD) Raised to Buy at Stifel Nicolaus.
Wimm-Bill-Dan (NYSE: WBD) Raised to Neutral at Goldman Sachs.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Filed under: Analyst Calls Tagged: ACGL, AMZN, ANF, APD, BWLD, CSCO, ELN, ERJ, GLW, HES, JEC, LEAP, MOT, OGE, RY, SD, WBD

Dividends or Not, Utilities Need To Perform (XLU, SO, D, DUK, FPL, AEP, ETR, FE, EIX, PGN, PPL, XEL, DTE, AES, CEG, NRG, CPN, AYE, NU, PNW, POM, NST, OGE, TE)

Administrator — Thu, 01 Apr 2010 14:54:34 +0000

Investors love dividends, and big stable utility stocks often have some of the highest dividends of any class of stocks. There has just been one problem… Dividends or not, utilities are sucking power and energy out of common stock portfolios of the American public. In fact, utilities have been among the worst of the worst when it comes to performance.

We wanted to take a look at Select Sector SPDR Trust (NYSE: XLU), Southern Company (NYSE: SO), Dominion Resources, Inc. (NYSE: D), Duke Energy Corporation (NYSE: DUK), FPL Group, Inc. (NYSE: FPL), American Electric Power Company (NYSE: AEP), Entergy Corporation (NYSE: ETR), FirstEnergy Corporation (NYSE: FE), Edison International (NYSE: EIX), Progress Energy Inc. (NYSE: PGN), PP&L Corporation (NYSE: PPL), Xcel Energy Inc. (NYSE: XEL), DTE Energy Company (NYSE: DTE) and more.

There may actually be some time for them to shine in the near future. Despite the rally market of the last month, almost none of these stocks are within 5% of their 52-week highs. We showed the dividend yields implied here, although as with all ‘yields’ there is often some distortion. What we did not show was a P/E ratio because of the lagging effect of that, but we did show was the closing price for March 31 as the quarter closed and compared that to the 52-week trading range and compared it to the average consensus price target from Wall Street analysts per Thomson Reuters.

So why is this sector in the spotlight? The dividend yields should be attractive enough. Most are 4% and higher. This offers defensive stock positioning, dividend yields, and the hope for some upside. Of course, some are barren of a dividend due to issues and turnarounds. That keeps investors from having to go out to REITs and take on all the risks there associated with land values and trends. Historically, utilities have been largely considered defensive stocks in hard times. Morningstar noted in its quarterly wrap-up, “Utility stocks were hurt in the quarter by falling commodity and energy prices, bearish earnings outlooks as firms reported earnings, and a generally negative view of the future of electricity demand.” The problem with that call is that energy demand is not dropping any longer and some larger companies are starting to increase their power usage again.

Filed under: Alternative Energy, Defensive Stocks, Dividend, Infrastructure, Nuclear, Oil & Gas, Shareholder Issues, Value Investing Tagged: AEP, AES, AYE, CEG, CPN, D, DTE, DUK, EIX, ETR, FE, FPL, NRG, NST, NU, OGE, PGN, PNW, POM, PPL, SO, TE, XEL, XLU

Gas Pipeline Joint Venture Killed (OGE, ETP)

247wallst — Fri, 13 Feb 2009 15:43:36 +0000

Last September OGE Energy Corp. (NYSE:OGE) and Energy Transfer Partners, L.P. (NYSE:ETP) announced a joint venture to transport natural gas from Texas and Oklahoma to California and the northeastern US. It was an ambitious project and would have been a significant player in the gas transportation space.

Alas, the companies have announced that the deal is dead. OGE’s chairman, CEO, and president said that “conditions in the financial markets are such that any partnership completed in the near term would not likely be economically beneficial to OGE.” ETP’s chairman and CEO echoed that sentiment, “We regret that the capital markets have prevented us from accomplishing our plans to combine these businesses in a strategic joint venture.”

If two major energy companies can’t line up the financing they need to form a regulated return business, this is not good news for any company.

Paul Ausick

Posted in Oil & Gas Tagged: ETP, OGE

Implications of New Natural Gas Pipeline Joint Venture (OGE, ETP, KMP)

247wallst — Tue, 23 Sep 2008 08:49:50 +0000

A 50/50 joint venture between OGE Energy (NYSE:OGE) and Energy Transfer Partners (NYSE:ETP) will create a new midstream company, currently called ETP Enogex Partners LLC, to transport natural gas from Texas and Oklahoma to markets in California and the northeastern US. OGE is contributing all of its Enogex interests to the new JV, and ETP is contributing all its interests in its Transwestern Pipeline, the ETC Canyon Pipeline, and its 50% interest in the Midcontinent Express Pipeline (the other 50% is owned by Kinder Morgan (NYSE:KMP).

As a result, the new JV will own more than 2,300 miles of Enogex’sintrastate pipeline system and about 23 billion cubic feet ofgas storage facilities. Enogex also owns all or part of seven natural gas processing plants with a capacity of nearly 750 million cubicfeet/day that are included in the deal. Energy Transfer contributes its2,400 mile Transwestern Pipeline system, 1,800 miles of the Canyongathering system in Colorado and Utah, and its 50% interest in the500-mile Midcontinent Express Pipeline.

This is not going to be a small potatoes company. Under the agreement,once the transaction is closed the companies will issue an IPO, as amaster limited partnership. Because the new company does not includeany production assets, it will not be subject to the wild price swingsin the natural gas market. Instead, it will generate that nice, steadytransportation cash near and dear to the hearts of pipeline MLPinvestors.

This JV shows all the signs of being a success. The gathering systemsare well-placed in productive, and growing fields, and the interstatepipelines are pointed at the right markets. Early trading today ismixed. OGE is up about 1.5% and Energy Transfer is down about the sameamount.

Paul Ausick
September 23, 2008

Posted in IPOs, Oil & Gas Tagged: ETP, KMP, OGE

OGE Energy Files For Debt Sale (OGE)

247wallst — Fri, 06 Jun 2008 08:26:16 +0000

OGE Energy Corp. (NYSE: OGE) has filed with the SEC for its Oklahoma Gas and Electric unit to sell up to $700 million in senior notes.

The filing says the company may offer from time to time in one or more issuances one or more series of unsecured senior notes. The aggregate initial offering price of the senior notes that are offered will not exceed $700,000,000 and these will be offered in an amount and on terms to be determined by market conditions at the time of the offering.

OGE Energy closed yesterday at $34.02 and its 52-week trading range is $29.12 to $38.30. Its market cap is $3.13 Billion.

You can join our open email distribution list to hear about other secondary offerings, mergers, special financings, IPO’s, restructurings, and other special situations.

Jon C. Ogg
June 6, 2008

Trouble Brewing In Oil & Gas MLP Land? (PAA, OGE, DVN, XCO, VQ, WES, APC, BSR)

247wallst — Thu, 15 May 2008 09:34:24 +0000

We have tracked these Master Limited Partnerships (MLP’s) and spin-offs or carve-out IPO’s from larger oil and gas companies for quite some time. What is amazing is that despite the rapid rise in oil and energy-related commodities has not translated to the "peak-IPO rush" like we saw with dot.com IPO flame-outs from 1999 and 2000. Many have been withdrawn and many have gone in limbo.

Earlier this week, Plains All American Pipeline LP (NYSE: PAA) completed a public offering of 6.9 million common units at $46.31/unit, generating net proceeds of $315 million. In February, Plains withdrew a proposed IPO for a master limited partnership (MLP) in its general partner, which may have generated much more cash.

OGE Corporation (NYSE: OGE) withdrew a proposed MLP IPO in January, citing "market volatility."

Devon Energy (NYSE: DVN) had planned an MLP IPO for the third quarter of 2007, but the offering has neither gone forward nor been withdrawn. This one is still in the "pending" category.

EXCO Resources Inc. (NYSE: XCO) filed in September 2007 for a public offering of 75 million common units in an MLP. Exco withdrew the offer in January, stating that "current market conditions do not support the completion of the offering in a manner that would result in the value enhancement to EXCO and its shareholders that was anticipated upon the initial filing of the registration statement."

Venoco Inc. (NYSE: VQ) announced an E&P MLP in February. This one is still outstanding as it is only 3-months old. Venoco enjoyed a $3.00/share price jump on Monday’s earnings report.

Last week we saw a pricing from Western Gas Partners L.P. (NYSE: WES),a spin-out from Anadarko Petroleum Corp. (NYSE: APC) saw a lacklusterIPO with a pricing below the indicated levels.

You can join our open email distribution list to hear about other secondary offerings, IPO’s, secondary offerings, special financings, mergers, spin-offs, and other special situations.

If you want to see an even more broad example of this trend in MLP’s, you can look at the ETF: BearLinx Alerian MLP Select Index ETN (NYSE: BSR)… This is technically an ETN, but who’s counting. Its chart has been highly unimpressive.

It’s not all bad out there. Some will still come public and some will still continue to do well. We’ll be showing some other pending or withdrawn IPO’s in deals thatare similar, but aren’t going to be oil and gas or pipeline MLP IPO’s.Stay tuned.

Paul Ausick
May 15, 2008

OGE Corp: Unloading OGE Enogex, Its MLP, In An IPO (OGE, OGP)

247wallst — Mon, 02 Jul 2007 10:40:52 +0000

A subsidiary of OGE Corp (NYSE:OGE), OGE Enogex Partners L.P., has filed registration papers with the SEC for an IPO of 7.5 million common units in a master limited partnership (MLP) that will trade under the symbol "OGP." OGE will retain a 63.9% limited partner interest in OGP, and will also claim the 2% general partner interest. An overallotment of 1.125 million units will be made available to the underwriters, UBS and Lehman Brothers. The IPO is expected to raise about $130 million.

OGE has a market cap of $3.42 billion and is the largest public utility in the state of Oklahoma. The mid-stream assets that it is passing along to OGP include nearly 5,500 miles of natural gas gathering systems and almost 2,300 miles of gas transmission lines from the Arkoma and Anadarko basins, and include 64 interconnection points with other pipelines transporting gas to the west.

As pipeline MLPs go, OGP will be relatively small; Kinder Morgan owns and operates more than 15,000 miles of natural gas pipelines. But, OGP starts life with a ‘AAA’ rating from Fitch Ratings. That’s a good thing, particularly as MLPs are notorious borrowers. Leverage of 50% or even more is not uncommon as these partnerships try to keep returns flowing both to their parent companies and to the limited partners. OGE has been well-managed and its Enogex subsidiary have been well-managed to this point, and Fitch is betting that will continue. As OGP tries to keep its returns high, the temptations will be many.

Paul Ausick
July 2, 2007