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Summary: Avista turned up on one of my screens for cheap stocks. The company sells electricity and natural gas in the Pacific Northwest and also engages in several unregulated businesses, including energy trading. AVA stock does look cheap in terms of its P/E ratio, P/B ratio and cash flow, but here again the company does not meet stringent standards for financial strength. AVA has taken on considerable debt to finance its activities. While cash flow appears adequate to keep everything going, there is not much margin for error. The stock has increased in volatility in recent years and it has underperformed the S&P. The dividend yield appears inadequate to compensate investors for the level of risk. In my opinion AVA is trading at a significant premium to its intrinsic value. The stock price appears to have fully discounted possible positive developments in the future. AVA does not look like an attractive investment at this time.
...Has the stock’s performance equaled or exceeded the performance of the S&P? The company has underperformed with increased volatility since 1998....
$25.6 (02/12/07)
Agree
Disagree
