MIR trades at trailing p/e 1,13, and fw p/e 12m of about 5. Reasonable debt to equity, 0,6 p/tb and has a good cash pile. Great value case with a bit of natural gas upside as well. Bullish on this one, should have the potential to double in 12-24 months and maybe hit 40 in 3 or 4 years. Utilities are so out of favor now it seems a decent contrarian play, backed up by a bounce in nat gas. The sustained low interest rate environment and fairly low nat gas prices at the moment provide a good entry point in the stock I think.
Some point out that free cash flow will be constrained in the coming quarters, this is true and is a problem, but not one the company can not ride iout. Stripping out non-permanent (although not completely non-recurring) items, they actually will generate free cash flow next year, albeit only 23c. Other risks are as always trading losses and a transition into an inflationary environment in which interest rates are hiked. This seems unlikely as the US economy remains in dire condition.
From a technical standpoint, one should perhaps wait until this breaks 18-19 and you get a bullish EMA 50>EMA 200 break. (Stop losses should be individually tailored to risk preferences). However, the weekly trend is positive, and VPU shows the utility sector making a technical breakout in both daily and weekly charts today.
$16.53 (09/18/09)
