Jan 8, 2014|
Andy Bischoff, Morningstar by financialexchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
And the big shot from Morningstar and -- how are you this morning. Good morning long picture have made. Very good -- let's talk a little bit about the the first company that you have here which is Calpine with the ticker CPE. And and tell us a little bit about them. And now what their businesses. Very Calpine is on the largest natural gas independent properties in the US. It's an -- -- and we leave that position to benefit from. -- Like bush has been a part -- or operate it's low cost legally allows coming to realize higher rent and and -- -- During the peak demand times that such a cold weather we've experienced. The past two days and Texas for a stamp. Ample that they experienced record when demand. The past few days this culture merry. -- patient throughout state leaky -- our prices. And unregulated. Properties elect Calpine. Really -- to benefit during situation. Come basically -- his position well throughout -- that's particularly in Texas. Californian in Atlantic. And it should benefit from environment regulation and strong demand growth and -- is that we don't picker apparently reflected in or power prices. Structured about when he compared to our plane now are -- investment but the -- -- that they get a lot of upside over the next 23 years. Though is that -- is riskier than you typically utility unit its expertise. My -- And I know that a number of these unregulated utilities do see a little bit more volatility. Then a traditional regulated one is that really because a lot of them are more involved in generation and transmission. Yes it is important aspect of the unregulated generations. To be -- to elaborate -- structural twelve. And in essence guarantee can earn returns on on capitol. Very good and and talking about another one of these utilities here in this one is Duke Energy with the ticker DUK. -- a little bit about them and why. You're optimistic on them at this point. Terrorists and -- -- the largest utilities and exact position of Progress Energy. But he and half you know extra data operations it around 90% of -- hearing the -- the apps that promise of Calpine. But unregulated operations and that lasted an exposure to Latin America. Really that impressed that the company's new management team patents delivering -- costs and -- Energy's -- of management provisional target. -- came -- -- running -- it's important to doesn't. Three yeah regulatory counter. It's very solid rate increases and and passport for a new generation investment which the the orca. Accusing people -- -- -- best Israeli operation which we think that did a good thing -- management to further focus on. Are regulated operations international operation providing got seventeen strong cash. Like our values and NTS percent trade around -- And you mentioned that they may be looking to spin off or sell. Those unregulated utilities any chance of further acquisitions as well in order to continue building their portfolio. Not a miniature metal in that and pistol that testing not -- and it was just quite large acquisitions I think there. The point genocide client and their parents he has had a -- they wanna focus not turn their current business profile. Talking with candy dish off of Morningstar and and the last stock that we have here one that I know a number of investors. Probably pretty familiar with the American Electric Power AEP tell us little bit about them -- -- optimistic. With their business at this point. Jurors like Ditka that throughout the largest regulate abilities after about eleven. But a state that we think investors have become overly concerned about an upcoming eager deregulation. Another generation assets and Ohio. -- particular series is an encouraging report clarity in the state eight he has strongly regulated operations these. If -- 6% earnings growth that the part about it at the -- at eight. Growth from new asset additions then placing of the ankle generations both of them -- very attractive transmission investment opportunities. To upgrade -- -- great in the port in the renewable generation. You know amid a tough environment management continues to focus on operating efficiencies and that aims to maintain two -- of cost -- After 2016. Perfect target around fiftieth trainer at that point -- -- And also strong that in and of potential here. The company can use increased -- an operation that's going to be as a report. -- -- And he did mention that they do have a -- fairly significant coal. Generation business there at an -- that's been a little bit of a concern for some investors just due to potential regulation regarding. That industry what changes they're making at this point in order to move a little bit away from that toward some other other generation facilities. And management's I've been very -- -- they're expected to call and how they've kind of deal over the next five years is that currently operate around 6% of of course generation plan to get that down 60% generation by tyrants and collapse of I'm building new natural gas. Generator as well. Very good -- and I appreciate you coming out with us this morning and now we'll definitely check in with yet to log it's more updates as we continue here. Thank you.