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On the first Tuesday (sorry, day late this month!) of every month, we will screen our database for the 10 companies with the lowest price to earnings ratio (ModernGraham-style) that are suitable for the enterprising investor.  These 10 companies will be placed in a mock portfolio and rebalanced to have a 10% allocation to each [...] Related posts:

1. Low PE Portfolio – October 2009 Update On the first Tuesday of every month, we will screen...
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Make sure you're holding the right stocks.

Analysts at Deutsche Bank started coverage on several utilities-related stocks on Wednesday with a “Buy” rating. The analyst now rates the following stocks as a “Buy”: CMS Energy (CMS) will benefit from last year’s favorable energy legislation in Michigan. Set a $17 price target on CMS shares, which closed at $14.54 on Tuesday. American Electric Power (AEP) should [...]

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Even with fewer future power plants, coal's going to dominate for decades to come.

Why do nations including the U.S. seem hell bent on spending hundreds of billions of dollars trying to develop commercial-scale carbon capture and sequestration technology (CCS) – while spending very little on developing technology for converting CO2 into a useful ...[More...]

Allegheny, AEP Affiliates to File New Application in Maryland before Year-End

Value Expectations submits:

The Applied Finance Group (AFG) has a disciplined approach for identifying companies that are expected to outperform and underperform the market by using proprietary metrics and measurements that have been tested and proven through time. Because AFG’s research is fundamentally derived, AFG’s quantitative analysis spans across growth and value stocks, all sectors, industries, and market caps with over 20,000 covered securities globally.

When searching for Large-Cap ideas, AFG’s Buy/Sell list is a good starting place as it has proven to create a significant spread in performance between companies that come up on AFG’s buy list and those on the sell list. Further focusing on companies based on AFG’s proprietary screening criteria (Economic Margin, valuation, quality of earnings, and management’s ability to create shareholder wealth) will save investors time in their research process. The result is a target group of stocks that can help you outperform as well as identify potential torpedoes to avoid in your portfolios.

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American Electric Power Co. Inc.’s (AEP) subsidiary Southwestern Electric Power Co. signed a letter of intent to buy transmission and distribution assets worth $94 million from the Valley Electric Membership Corp. Southwestern Electric’s acquisition of the cooperative will double its presence in Louisiana. Valley Electric Membership Corp. is a Louisiana cooperative with more than 7,000 miles [...]

(AEP) American Electric Power Company to Buy Assets

American Electric Power Co. Inc.’s (AEP) subsidiary Southwestern Electric Power Co. signed a letter of intent to buy transmission and distribution assets worth $94 million from the Valley Electric Membership Corp. Southwestern Electric’s acquisition of the cooperative will double its presence in Louisiana.
 
Valley Electric Membership Corp. is a Louisiana cooperative with more than 7,000 miles of distribution lines, 90 miles of transmission lines and 29 substations. Southwestern Electric expects to shell out $124 million overall for the deal. Although this is over the value of the assets, the company would be adding 30,000 customers of the cooperative.
 
A deal is expected to be formalized by the end of fiscal 2009, with a formal vote on the dissolution of the cooperative expected by February 2010. However, a number of regulatory approvals are required, as well as approval from the board of American Electric Power.
 
Southwestern Electric currently serves more than 473,500 customers in three states, including 180,000 in Northwest Louisiana, 113,500 in western Arkansas, and 180,000 in East and North Texas. The subsidiary is based in Shreveport, Louisiana.
 
The parent company, American Electric, is one of the largest public utility holding companies catering to approximately 5.2 million customers spread over 11 states. Increasing the headcount of customers will boost the dwindling fortunes of the utility.
 
In the recently reported quarter of fiscal 2009, American Electric’s revenues fell 17% to $3.5 billion from $4.2 billion in the year-ago quarter. A tepid economy, coupled with a summer cooler than average, affected electricity demand. The downturn affected demand for industrial customers most. Industrial retail sales fell 16.9% year-over-year. Commercial retail sales also fell 1.2%. However, residential retail sales remain stagnant.

We maintain our cautious Neutral recommendation on the stock.

Read the full analyst report on "AEP"
Zacks Investment Research

Today’s tickers: CVS, LIZ, ITMN, MA, V, RF, KG, HW, WSM, AEP & NTAP

CVS - CVS Caremark Corp. – Shares of the pharmacy retail chain are up 1.5% to $31.11 perhaps due, in part, to the ‘buy’ rating it received at UBS today. Optimistic options activity took place in the December contract as one investor initiated a bullish risk reversal. It appears the trader sold 4,400 puts at the December 31 strike for an average premium of 94 cents apiece in order to finance the purchase of the same number of calls at the higher December 32 strike for 63 cents each. The investor pockets a 31 cent credit on the trade, which he retains in full as long as shares remain above $31.00 through expiration. Additional profits accumulate if CVS’s shares rally above $32.00.

LIZ - Liz Claiborne, Inc. – A 15,000-lot covered call in the January 2011 contract on Liz Claiborne today suggests shares are likely to recover, albeit at a glacial pace. Shares of the apparel and accessories retailer suffered a 5% decline to $4.55 during the trading session. One investor effectively purchased shares of the underlying stock for $3.30 apiece by selling 15,000 calls at the January 2011 5.0 strike for a premium of 1.25 each. Thus, the trader stands ready to accrue gains of 51% if shares of LIZ appreciate to $5.00 by expiration. The long-term positioning of the covered call play provides several advantages to the investor. One advantage is that the call options do not expire for another 13 months, which leaves ample time for LIZ’s shares to appreciate up to the strike price of $5.00. The 15,000-lot call transaction represents nearly 50% of the total existing open interest on LIZ of 31,502 contracts. Note that shares last traded above $5.00 yesterday at approximately 10:35 am (EDT).

ITMN - InterMune, Inc. – A bull call spread on the biotechnology company today suggests shares could rally significantly by expiration in April 2010. Bullish options activity on the stock belies the more than 3% decline in ITMN’s shares during the session to $10.94. The call spread involved the purchase of 3,750 calls at the April 15 strike for an average premium of 2.25 each, marked against the sale of the same number of calls at the higher April 25 strike for 75 cents apiece. The net cost of the transaction amounts to 1.50 per contract. The optimistic investor is positioned…