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Author: Steadfast7 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 71  
Subject: Welcome Goon Date: 1/28/2002 4:11 PM
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Welcome to the post. From time to time I try to share articles and research I've come across. Other times just thoughts and speculations. After reading some of the prior posts on this board, you may have noticed the friendly and positive attitude of the posters. Other boards have different personalities and the information provided is close to 100% bogus. In today's massive availability to disseminate information, the need for truth and honesty appear to have become a minor factor. Even the financial journals often slant or provide false information. Example, a few days ago SmartMoney.com reported that AOL had pulled out of the partnership with NPW, but no one told AOL about that. I wrote them (AOL) and they responded that it was only a rumour and they don't make comments on rumours. The article was anti-NPW but had no evidence or proof to back up its alligations. It was just a smear article.
My own entries into NPW presently are at I think more than a dozen points. As low as .77 and as high as 2.53. There was a time that I was in higher, but pulled out and took a loss. With these energy companies, timing is very important because performance isn't presently reflecting in stock prices. When the investing in this sector picks up the best bargains will bring the biggest rewards. Here is my weekend's research on NPW.
As is always the case, on the weekends I have the time to reevaluate my stocks and NPW is coming up smelling like a rose. In the industry utilities/gas/distributors only one other company is as undervalued as NPW. That would be Cornerstone Petroleum. NPW still is the better by a long shot. CNO has Debt/Equity of 240.4 (Industry ave is 185.2) and NPW has a big ZERO. CNO Current Ratio is 0.9 (Industry ave is 0.8) and NPW is twice as high as the 2nd best at 2.6 (SWN / Southwest Energy has 1.4) Of course it is besting nearly all competitors with a Price/Sales Ratio of 0.1 and a Price/Book Ratio of 0.1.
NPW is reinvesting all revenues, that's no secret. They've informed us of that continually, including the use of the capitalization to further the customer base. The industry, on the average is carrying too much debt and doesn't have the revenue to pay it. NPW has no debt, therefore is not actually losing money. Worst thing that could happen is that the growth has to be slowed, any other worst case scenario is an unfounded speculation or a scare tactic. Personally, I would prefer that they not get the financing and grow slower, keeping the financial advantage. This is a pretty narrow picture and only accounts for 31 companies. There are many companies outside this industry that would also be considered competitors of NPW. As for the stock price, this and almost ALL the other related industries have suffered the same drop in popularity.
What is sad is companies with a silver spoon in their mouths are also suffering major drops in price. An example is RRI, a split from Reliant in Texas and a competitor of NPW. RRI has dropped from a 52 week high of 37.50 down to a recent price of 14.22. Where will it stop? RRI has strong financial numbers and gobs of money and their shareholders still can't get a break. Add to that, there are 7 energy companies (including NPW) nibbling away at their customer base. You would think being a default company, (customers in the Houston service area automatically switch to RRI unless they choose their own provider) they would be more insulated to the degrading of stock price. Looking at the Price/Book Ratio and Price/Sales, RRI is relatively close with NPW in the bargain numbers, but it's not carrying over in the stock's performance. RRI has a Debt/Equity ratio of 18.6, but that is not out of line with the industry average, but is fairly reasonable. All measurements today still make NPW the best bargain with the potential for great rewards. Perhaps when NPWs stock price passes RRI; Reliant will wish it bought out NPW when it had the chance? If it has a chance? There are plenty of better suitors for NPW than Reliant. Keep an eye on Shell and El Paso Corp. Don't overlook companies like Xcel either. Anyone of these companies could take a tremendous competitive stride forward with NPW.
However we need to bear in mind that NPWs business plan and operation doesn't need them. But they would compliment each other very well.
IMO the diminishing of Enrons participation with NPW is a positive event for us. Now that we know how they treated some of their subsidiaries and affiliate companies, I'd rather see Enrons shares on the open market rather than bring them back in the picture. The future will unfold in it's own time. Exciting huh?
The next few years will bring many changes to the way energy is distributed in this country. I forsee a lot of mergers and buyouts.

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