I am retired and take educated guesses on all things financial.

January 24, 2008

January 25, 2008: Time to clean up with EnergySolutions?

With the sudden gyrations in the energy sector comes opportunities to buy some issues on the cheap. One stock that has had a sudden, yet perhaps unjustified decline is EnergySolutions (ES). Driven from approximately $28.00 to $19.00, ES could represent good value at this time.

EnergySolutions is a provider of specialized, technology-based nuclear services to government and commercial customers. Included in the arsenal of services are engineering, in-plant operations, outsourced specialty services, spent nuclear fuel management, decontamination and decommissioning, logistics, transportation, processing and disposal of all things nuclear. It also owns and operates facilities that fulfill its services. ES has been acquiring companies that complement its core activities.

Not reflected in the lowered stock price, U.S. and EU nuclear cleanup awards are on definitely on track. EnergySolutions is likely the best way investors can reap profits from vast amounts of cleanup efforts ongoing and to be contracted in the future. ES, headquartered in Salt Lake City, UT has thirteen regional U.S. offices. It is also well positioned in the EU with twelve regional offices,and is especially strong in the U.K. It is my view that the services provided by ES are recession-resistant, if not recession-proof.

Going public in November, 2007, EnergySolutions' initial public offering was priced at $23.00 per share. Granted, the seasoning of this almost new security is lacking. Institutional ownership data is nil to date. And the very few analysts that follow this stock are still in a wait and see mode, CSFB excepted (they like ES very much and have a recent price target of $32). Ground floor, anyone?

Trading at $20.87 on Thursday's volume of 538,000 shares, I believe an investor looking to add a focused, profitable, non-traditional energy company as a small part of a diversified portfolio could well speculate buying ES at this time. I suspect one could also justify ES being an alternative energy play without too much of a stretch.



I will be down South doing neat things through Monday. As always, I appreciate y'all sending e-mails and comments. Commentary will commence again of Tuesday, if I have something to add to the mix!

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