Adding KEP to the Portfolio
Our first recommendation for the Green Investments Core Green Portfolio will be a value play... one that promises to remain in the Green Investments portfolio for some time... It's Korea Power and Electric Company (Kepco), with the symbol: KEP.
The reasons we like this South Korean energy giant are many: a monopolistic lock on the South Korean Electricity Market... solid management... a centralized location within the Asian renaissance... a Western-style democracy surrounding it... but there's more...
KEP is also partnering with Datang, one of China's largest state-run energy companies, to provide enormous wind-turbine powerplants behind the Great Wall... We're talking about historic-sized projects that could pave the way for a cleaner China... and a steady acceleration of profits for KEP.
The chart shows a steady climb up... and we expect it to continue...
However, keep in mind... this isn't a 10-bagger play... This is a conservative beginning to what we hope will be a nicely balanced portfolio of growth and value... with a leaning toward growth.
KEP's earnings through September were at $24.8 billion, up 18.8% over last year's numbers... The company is #240 on the Fortune Global 500 list... This is a big, powerful utility located right at the heart of the Asian boom... and along with good fundamentals, shares could be depressed due to the very unlikely threat of nuclear attack from North Korea.
More on Kepco to come... and more picks...
Buy KEP at market -- currently $22.66 -- up to $24. Speculators can consider the March $25 calls (KEPCE.X) currently trading at $0.15, but don't pay more than $0.30...
Monday, December 25, 2006
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