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on 9/10 and 9/11
Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "Stein, Neil" <neil.stein@csfb.com< X-To: undisclosed-recipients:, X-cc: X-bcc: X-Folder: \Jeff_Dasovich_Oct2001\Notes Folders\All documents X-Origin: DASOVICH-J X-FileName: jdasovic.nsf <<IPW070201.doc<< Good Morning, Attached, please find the latest issue of our Independent Power Weekly. Summary: 1. IPPs Rise 3.7% Last week the Independent Power Producers posted their strongest stock price performance since mid-May. Our composite was up 3.7%, outperforming the S&P 500 (+0.0%), but underperforming the NASDAQ (6.6%). Mirant was the strongest performer in the group, rising 10.9%. Reliant Resources was the weakest, falling 2.3%. While the IPPs show some signs of renewed strength last week, we believe "technical" end-of-the-quarter selling pressure combined with lingering political concerns prevented a more significant rally from taking place. 2. Refund Issue Dominates Investor Attention The most visible political concern revolves around the issue of potential retroactive refunds for power generators. We believe closure on this matter could be forthcoming over the next month, most likely in the form of a FERC order. In our view, Strong Buy rated Calpine offers the best downside protection, given that the bulk of its sales in California have taken place outside the spot market. We would also cite Buy rated Mirant, which has taken sizable reserves against its California earnings. For the whole group, we believe any resolution will have a positive impact on market psychology and, valuations which have compressed 29%, year to date. 3. Windfall Profits Tax On July 9, the California Assembly Revenue and Taxation Committee will consider SB 1X-the power generator windfall profits tax bill. This hearing was originally scheduled to take place on July 2. Our contacts in Sacramento indicate that the bill does not have broad support and expect the bill to "die" at some point in the legislative process. 4. Q2 EPS Preview The bulk of the IPPs will report second quarter earnings during the weeks of July 23 and July 30. Below we review our estimates and expectations for the industry. Generally, we expect solid growth across the sector driven by recent acquisition and development activity. In particular, we believe Calpine and Black Hills offer the greatest potential for upside EPS surprises. 5. CSFB Power Generation Supply Chain Conference On September 10 and 11, CSFB will host a Power Generation Supply Chain Conference at the Plaza Hotel in New York City. This event is designed to provide investors with a wholistic perspective on all aspects of the sector-from coal and natural gas companies, to equipment and construction service providers, to the power producers themselves. Please contact us if you would like additional information. Regards, Neil Stein 212/325-4217 Bryan Sifert 212/325-3906 This message is for the named person's use only. It may contain confidential, proprietary or legally privileged information. No confidentiality or privilege is waived or lost by any mistransmission. If you receive this message in error, please immediately delete it and all copies of it from your system, destroy any hard copies of it and notify the sender. You must not, directly or indirectly, use, disclose, distribute, print, or copy any part of this message if you are not the intended recipient. CREDIT SUISSE GROUP and each of its subsidiaries each reserve the right to monitor all e-mail communications through its networks. Any views expressed in this message are those of the individual sender, except where the message states otherwise and the sender is authorised to state them to be the views of any such entity. Unless otherwise stated, any pricing information given in this message is indicative only, is subject to change and does not constitute an offer to deal at any price quoted. Any reference to the terms of executed transactions should be treated as preliminary only and subject to our formal written confirmation. - IPW070201.doc
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