Four Investments To Energize Any Portfolio
Wednesday, December 2, 2009 at 12:32PM 
Overview: BP Plc, is Europe’s second-biggest oil company with 18 billion of barrels of proven reserves of oil. In addition, the company has invested $3 billion in alternative energy globally in the last three years and is on course to meet a commitment it made in 2005 to spend $8 billion by the year 2015. London-based BP has focused mainly on wind power projects in the U.S., solar in India and China and biomass in Brazil.
Reasons To Invest:
1. Global energy leader in oil, gas and alternative energy
2. Current stock dividend is currently nearly 6%. Company says dividend is secure as long as oil stays above $40/barrel.
3. BP has a rock solid balance sheet with nearly 9 billion dollars of cash on hand.
4. Increasing exposure and investment in alternative energy and natural gas should become more valuable in the years ahead.
Risks:
Leveraged to the global price of oil and improving international economies.
Lower oil prices in Russia may hurt near term results
Restructuring refining operations may hurt near term results
Cost of oil exploration and production is a risk to all oil companies.
Conclusion:
Global energy needs are estimated to increase by 40% by the year 2030. Growth in China and emerging markets are driving the demand. Longer term BP is strategically in the right place at the right time. This is a long term explosive growth story that pays a 6% current dividend. We are buying 300 shares at the market open on Thursday December 3, 2009 in the Model Retirement Portfolio. (As always, do your own due diligence before investing). (Disclosure- eWorldvu members are long BP stock)
Overview: Peabody Energy (NYSE: BTU) is the world's largest private-sector coal company, with 2008 sales of 255 million tons and $6.6 billion in revenues. Peabody is a global leader in clean coal solutions, and providing environmental solutions through greater use of coal.
Reasons To Invest:
1. World leader in Coal and clean coal solutions
2. Expanding into China with improving demand from Asia
3. Coal prices track natural gas prices which have been weak. However prices will head higher with improving global economy and emerging market demand over time.
4. Warren Buffet buying Burlington Northern is bullish for coal longer term.
Risks:
1 Cap and Trade Bill in Congress to be discussed in the spring creates some uncertainty.
2. Improving coal prices in 2010 depend on continued economic recovery.
Conclusion:Worldwide leader in coal is destined for rapid long term growth. Cap and Trade bill is in trouble because of Climategate. We are buying 200 shares for the Model Growth Portfolio at the market open on 12/3/2009. (As always , do your own due diligence prior to investing). (Disclosure - eWorldvu members are long Peabody Energy Stock)
Overview:Florida Power and Light (FPL) is the largest investor-owned electric utility in Florida, serving approximately 4.5 million customer accounts. It is one of the largest electric utilities in the United States and ranks No. 1 among electric utilities nationwide in energy-efficiency programs.
FPL is a regulated utility with unregulated businesses. Its main unregulated business called NextEra Energy Resources is the No. 1 wind energy company in the United States and is the nation’s leading operator of solar power generation. FPL operates in twenty seven states and Canada.
Reasons To Buy:
1. Regulated business provides income and stability. Unregulated business provides an opportunity for dramatic long term share price growth.
2. Well admired company that is the leader in wind and solar power in the United States.
3. Pending rate increase controversy in Florida has temporarily suppressed the share price.
4. Short term revenue growth outlook is temporarily flat due to recession and Florida unemployment.
5. Stock dividend of nearly 4%.
Risks:
1. Unfavorable outcome of pending rate increase request early next year could be a short tem risk.
2. High continued unemployment especially in Florida will suppress revenue in the short term.
3. Debt load is a somewhat high even for a partially regulated utility.
Conclusion:
The best long term investment growth and income opportunity in the United States in wind and solar power. We are buying 300 shares at the market open on December 3, 2009 for the Model Retirement Portfolio. ( As always do your own due diligence prior to investing). (Disclosure- eWorldvu members are long FPL stock.)
Overview: General Electric Company (GE) operates as a technology, media, and financial services company worldwide. The company has been a global leader since its inception in 1882.
Reasons To Buy:
1. Company focused on reducing financial division impact that has it currently trading like a financial stock.
2. Great company to buy with strengthening worldwide economies.
3. Sale of NBC to Comcast helps with financial deleverging since it removes 9 billion of debt from the GE balance sheet.
4. Non strategic assets to be sold in next couple of years will re-focus the company.
5. Company is a global leader in alternative energy solutions.
6. Alternative energy division is growing rapidly and should become a major contributor to total company earnings in the next few years.
7. Although reduced in 2009, stock Dividend is still .40 per share.
8. Company share price is historically cheap for such a well known global brand.
Risks:
Financial division is still a major risk to the firm.
Company needs to repay TARP
GE is leveraged to the global economy and depends on economic recovery
Conclusion:
GE is making progress on its balance sheet and the low current share price is attractive long term. The dividend is still a positive and could be increased over time. This is really a 2011-2012 earnings recovery story which the stock market should begin to recognize in the next year. We are buying 500 shares for both the Model Retirement Portfolio and the Model Growth Portfolio at the market open on Thursday December 3, 2009. (As always do your own due diligence prior to investing. (Disclosure- Members of eWorldvu are long GE stock).
For more on climate and energy future, please read:The Hoax Of Man-Made Global Warming Revealed on eworldvu.com
Jim Smith
500 GE bought at 16.12 for Model Retirement Portfolio
500 GE bought at 16.12 for Model Growth Portfolio
200 Btu Bought at 44.96 for Model Growth Portfolio
300 BP Bought at $58.15 for the Model Retirement Portfolio
300 FPl Bought at 53.41 for the Model Retirement Portfolio
All trades at market open, S/P at 1114
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