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Paul, Thanks. What do you make of this buyout in the UK? A little profit coming our way?

Jarhead
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Until the annual meeting in April, there didnt seem to be much of a strategy set by the Company. At the annual meeting, Hehct stated some of their goals for the next couple-five years: grow earnings at 8%, get to 20,000MW of generation, and grow the customer base to 5 million. I'd like to think that the Company has finally set some direction and Wall Street has taken notice. In comparison to PE's and GPU's published strategies, PPL's may be a little late, but the price has had a nice run. I'll be interested to see how the price reacts to the next interest rate increase.

Regards the UK deal, it seems they are divesting of the generation, and just want to run SWEB as a distribution company, sort of like Emel in Chile. Perhaps the generation assets in the UK are poor.

Any thoughts??
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Hi!1Jarhead,
I agree with bleon on all aspects,especially the part where PPL seems to be proceeding somewhat with a clearer direction to their goals. However I still don't really understand the UK deal. PPL seems strongly committed to generation for the future, so I am still a little mystified by the aqusition of such non-generation companies. Hopefully distribution is more profitable than generation in UK and South America.

Sorry I can't be more help,but my growth stocks (PPL may soon be one,hopefully)are really tying up my research time in these volatile markets.

Bleon seems to have a pretty good handle on the utilities front. I admit I do not.

Hopefully the next 10-Q and value line can shed some light.

Regards,
Paul
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Paul, its only an opinion, but I tend to think some of the purchases made may have been experiments, or a view that the Company wants to dabble in certain areas, if for no other reason than to say that they have "kept up with the Joneses". One disconcerting area is the construction of new merchant generating plants...it was announced a while ago that the Global division would build new gas fired generating plants in Arizona, Connecticut and Pennsylvania, but there doesnt seem to have been much movement since all the announcements. I dont know where these projects stand right now.

The stock price has stayed up, and may move more once all the bonds are issued for the stranded costs. I dont fully understand that either, but the buzz is that its a good thing financially for the shareholders and the customers.

Bleon
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I glanced at Value Line the other night at the library and they seemed very positive about PPL.

Can't remember all the details, but the jist of it was that PPL is making good moves and they are somewhat impessed.

Value Line seems to think that their earning could increase to $2.65/share a few years down the road and that PPL may increase dividend next year (didn't project by how much). Don't know if I like the idea of increased dividend if PPL is looking to increase growth.

Also said another share buyback is possibly in the works. Acquisitions,buybacks,increased earnings,increased business,increasing dividends etc. seems pretty ambitious for a staid old company who, not too long ago had earnings of $1.80/share and paid $1.67/share of that in dividends.

The bonds,I assume, will give PPL a lot of good working capital.

All of your opinions sound good to me. I hope that whatever PPL has done within the utility sector to make Value Line practically do an about face from a year ago,that they keep it up. Looks,so far, like we went from one foot in the grave a year ago to having a lot of upside potential.

Regards,
Paul
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