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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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Author: GordonG13 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 58 of 71
Subject: Re: Welcome Goon Date: 1/29/2002 1:47 PM
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What happens when they run out of cash later this year?

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Author: Steadfast7 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59 of 71
Subject: Re: Welcome Goon Date: 1/31/2002 11:05 AM
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That's the point I made about growing slower. They don't have to grow as aggressively as they have. From my estimates, they are receiving more than a million dollars a day from operations. As with all businesses and individuals, they can live within their means. Borrowing money will bring another obligation that I don't think is a wise idea at this time. Although a lot of debt is being carried in this industry, almost every energy company has downgraded credit ratings. Off hand, I can't think of one that hasn't. So the amount of credit we'd be eligible for might not be worth the obligation. Cost of goods is the largest necessary expense, overhead isn't overbearing and management can take a pay cut until they make this a profitable operation. This business produces cash revenue every day. Television isn't the only media to market this business and we'd be kidding ourselves if we think that we can burn money on that media for very long. If there are any better ideas, I'd like to hear them. I like the aggressive business plan and if the management can see their way clearly without heeding my advise, then they should ignore it and pursue with their more informed strategy.

At any rate, my opinion on this and a dollar will buy a cup of coffee.

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Author: GordonG13 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 60 of 71
Subject: Re: Welcome Goon Date: 2/1/2002 3:29 PM
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Well I guess we will see shortly. If you are right they have to shed alot of staff and may get in a death spiral. Companies may not want to contract with them. They certainly cant raise more with the markets as they are and having raised nearly $500m less than 18 months ago and spent it all.

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Author: Steadfast7 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 61 of 71
Subject: Re: Welcome Goon Date: 2/4/2002 1:47 PM
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Naturally they spent it. That's what it was raised for. The only unexpected expense was the 110 million caused by the enron collapse. NPW broke the one million customer mark over a week ago and I haven't heard where they are today. Not that it matters, as long as they are busy with business. The criticisms I've read have no basis. No numbers, no negative facts, only inferences. I can name many energy companies that are having the same difficulties ( I have named some previously) and are long time established companies. Because of the history of regulation in this industry there are literally hundreds of gas and electric providers. Most you can not buy stocks in; either they are wholly owned subsidiaries or community owned utilities (such as mine). They just do business and don't have to deal with people speculating over their stocks. I've read speculation that Xcel may buy up the remaining NRG stock and make it a subsidiary again because NRG has dropped in the same way NPW has, yet NRG is an international money making machine. A lot of bargains out there and NPW is one.
With the low credit rating of the energy sector in general and the advantage of not carrying debt in a heavily indebted industry, I'd rather not see us borrow money. The price of NPWs stock is irrelevant to day to day operations. It IS important if money will be borrowed or new issues of stock are to be sold, but neither we nor most any other energy company is in the position to take on debt. The terms would not be as favorable as desired and the amount may not be sufficient to make the difference we would want.
It would be better for NPW to slowly buy back some of the stock at these prices and borrow money when the stock price gives us a better advantage.

< What companies won't want to contract with them? And why? >

They pay their bills and have cash on hand, they make money and are a growing company, reinvesting everything they bring in.
Why speculate on problems that don't exist? How about this one? The moon may degrade it's orbit and crash into Texas? How will this effect NPWs stock? Speculating on nonexistent problems sounds as silly as the ridiculous example I just gave.
Buy the way, everyone, I think AOL is out of the picture. Can't find reference anywhere to them anymore and AOL is having all sorts of internal problems. NPW has gone on with "Coactive Networks" and "Internet Home Alliance" and has left AOL in the dust to deal with it's own problems.
NPW is also using some of the marketing strategies developed during the AT&T long distance carrier breakup.
A lot of great stuff is happening at NPW, but you wouldn't know it by reading the uninformed postings on some boards.
Take a close look at those who are posting against NPW? They have made it a full-time occupation. Ten to twenty postings throughout a day. Posting negative news that has nothing to do with NPW, but is posted to 'infer' that NPW is guilty by association. In my world, I prefer reality. Real business, Real numbers, productivity, growth, and if I want gossip, I'll buy the Enquirer.
One note to consider, short interest has been consistently below 1.0. An indication that the smart short sellers aren't stupid enough to bet against this company.
Another is that institutions hold 50% of NPWs stock and they aren't letting it go either. Once the disposition of Enrons 44% has been decided, this stock can perform on its own merits, where at the moment that is a very important external influence upon its price. And it has not one bit of relevance to NPWs day to day operations.
NPW is doing good business, its stock is undervalued as a result of an external influence and the present energy sector cycle. That's the kind of circumstances that make for good bargains.
Add to this, the message board attacks (not this one so far) that have all the earmarks of a dedicated war of words. Why would anyone devote their life to bashing any stock unless:
1) They are being paid to do it.
2) Getting back at a spouse (usually that wears out)
3) A sick individual needing professional help.
4) Sold short and trying to bring down the price.
5) Bought too high and didn't anticipate the fall and now wants everyone to share in their misery.
Since I don't know everything, I read a lot. Here are some notes from an investing book I read once. The reference is to chat room and message boards.
"Chat Rooms/Message Boards - Offered by Web sites as a feature to draw viewers. Not the best prospecting tool. Very unreliable and used sometimes to influence other investors. Internet Scams Stocks praised or bashed in chat rooms and on message boards should be treated with skepticism. These are not the only media for scams. "
For me, these boards are primarily for entertainment. I do enjoy sharing ideas with others that share my interest in the occasional following of a stock. Since I am not a speculator or day trader, I don't fall for the 'shock news alarms'. And I don't expect my postings to influence anyone else. I do it for fun and many of the posters on this board are pleasant everyday folks like me. I'm more interested in hearing about how they mowed the lawn today than about how the stock will be at $12.00 in a month.
Well, enough for today. I have to get to the post office and stop off at the local college on errands. Have a good day.

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Author: GordonG13 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 62 of 71
Subject: Re: Welcome Goon Date: 2/5/2002 12:23 PM
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Well I guess we will see how it all turns out. I hope they do well. I bought the stock at IPO (ouch) and I wish them well, they certainly have a neat idea and I like the management.Some points of fact however:

-If they are operating within 12 months funding window they will get a note on their accounts or have to shred costs.If the former this will impact their ability to contract.
-Less than a dollar shares delist from NYSE after a time. This will hurt credibilty with counterparties too.

Lets hope they can overcome all this.

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