American Electric Power
The electricity utility started operating the Dresden natural gas-fired power plant last week."According to an article in Platt's Electric Power Daily, AEP is looking to sell/transfer the Mitchell plant (~1560MW of scrubbed baseload coal located in WV) from its Ohio Power subsidiary to Kentucky Power (which would own 20%) and Appalachian Power (80%)," Deutsche Bank analysts wrote in a Feb. 1 report. "AEP had previously indicated it would look to contract or even potentially sell some of Ohio Power's generation assets, given that Ohio Power's generation is no longer regulated under the recently-approved Electric Security Plan (ESP). We believe any transaction would require FERC approval and approval by the Kentucky PSC, West Virginia PSC, and Virginia SCC. We also believe investors will view a sale favorably, given concerns about AEP's expected unregulated generation exposure starting in 2015 (particularly in light of current forward power prices)." Forward Annual Dividend Yield: 4.7% Rated "A- (Buy)" by TheStreet Ratings: American Electric Power has a $45.70 price target from TheStreet Ratings. The stock closed Monday at $39.61; it has dropped 4.12% year to date.
Altera The semicondcutor company is scheduled to report first-quarter results on March 8. Analysts, on average, anticipate earnings of 37 cents a share on revenue of $427.88 million. "The disconnect between XLNX positive and ALTR negative most likely on higher concentration of Asia comms exposure and military program timing for ALTR," Credit Suisse analysts wrote in a Jan. 25 report. "We would need to see signs of comm infrastructure capex reaccelerating, more visibility on the RATE of ASIC replacement, and/or valuation which moderates from current 63% premium to the SOX to a more inline 3 year premium of 21.1% in order to become more aggressive on this space." Forward Annual Dividend Yield: 0.8% Rated "A- (Buy)" by TheStreet Ratings: The company's fourth-quarter gross profit margins were basically the same from the previous year. Altera is extremely liquid. Its Quick Ratio is 3.61, which demonstrates an ability to meet its short-term cash needs. In the fourth quarter, stockholders' net worth increased 28.84% from the prior year. TheStreet Ratings' price target is $50.60. The stock closed Monday at $40.32 and has increased 8.68% year to date.