Company Description
FirstEnergy is a registered public utility holding company
headquartered in Akron, Ohio. Its subsidiaries and affiliates are
involved in the generation, transmission and distribution of
electricity; marketing of natural gas; and energy management and
other energy-related services.
[Source: Company Press Release]
Reasons to Invest:
This week's DOTW has nearly outperformed every single one of its
competitors since August of last year. To date, the stock has
gained more than 15 points over the past 14 months. A quick look
at the Point-and-Figure chart and I note that the stock is
currently on a Double-Top-Breakout pattern, of which has a
bullish price objective (75.00) nearly 50% over its current price
of 40.78. Furthermore, the stock has been trending through quite
a nice regression channel, which has yet to test its bottom
support bar for the entirety of its 13-month span.
Without further ado, this week's DOTW is FirstEnergy Corp
(NYSE:FE). FirstEnergy Corp blew investors minds when they
announced that their net income for the first six months of 2004
came in at $378 Million. I mean if you consider that this figure
is up two times their last net income report of $124.7 Million,
it's easy to see that FE is building a strong foundation of
positive returns. The company cited higher margins and fewer
operating costs as two of the contributing factors to their
successful increase in net income. On top of that, revenues were
bumped marginally higher (+4%) to $6.33 Billion.
On September Seventh, Site Selection Magazine named FirstEnergy
Corp a leading utility for economic development for the third
consecutive year. In order to be nominated for the award each
company has to pass four categories; Capital Investment, Job
Creation, Capital Investment Per Capita, and Jobs Per 10,000
population, as well as gauge the ability of the company "to
complement power delivery with the powers of persuasion and
innovation in fostering corporate investment in their service
areas." Douglas Elliott, Senior VP of Customer Service for FE,
noted that they were proud to be listed among Site Selection's
top companies, as it showed that FirstEnergy's economic
development efforts have helped to attract capital investment and
new jobs over their three-state service area. "For 2003, our
efforts, in cooperation with our state and local partners, helped
attract almost $2 billion in capital investment and helped create
almost 8,000 new jobs throughout Ohio, Pennsylvania and New
Jersey."
On top of an already impressive first half of the year, FE's
daily chart looks phenomenal. While I am upbeat on the long-term
outlook for the stock, I would like to make sure that I make
everyone aware of the fact that the stock is due for a little
profit taking. The shorter-term outlook I have on FE is not
quite the same as the longer-term outlook, but I suspect that
given a few weeks to a month, we could see a beautiful entry-
point take shape. As is, FE has been consolidating for nearly
six weeks now. If one were to ask me what I think about FE's
current trend I would say that the current trend sort of
resembles the same trend that formulated in March (04) and ended
in May.
With that said, I believe that we are going to see some major
resistance tested over the next few weeks to months. However, I
believe that with each failed test of resistance we will be given
the opportunity to purchase shares at a lower premium, which in
my opinion boosts the star rating that I have on this particular
DRIP.
Ideally I would like to believe that the 100 DMA (39.26) will
serve as strong support for the stock. I would like to see a
pullback near this moving average, before I initiated the DRIP.
This doesn't mean that I am not going to place my order for one
share of FE now. After all, the sooner I have one share of FE in
my hands, the sooner I will be able to initiate the plan once my
conditions are met. By conditions, I mean my plan. As I have
been saying to you over the past few articles, Plan your trade
and trade you plan. Now hypothetically speaking, if FE does not
find support at its 100-DMA, I am still comforted by the fact
that the 200-DMA (39.26) is not too far below the 100-DMA, which
should serve as a cushion to any downside surprise that may come
the stocks way.
If my speculation is correct, we could see a bearish crossover on
the MACD indicator on the Weekly chart in a week or two. The
Stochastics indicator on the weekly chart is already edging from
overbought territory to neutral territory, which should bode well
for a relief rally come the middle of November, or the beginning
of December. Like I said, once I see a strong bottom formed at
the underlying moving averages or on the bottom bar of the
regression channel, I am going to initiate the plan. Make sure
that you look at the hypothetical Weekly DRIP Portfolio each
week, as I will update you on the exact date that I initiated the
FirstEnergy DRIP.
As far as dividends go, FE offers an annual dividend yield of
3.68%, which tallies out to an annual dividend of $1.50 per share
owned, per year.
This ends another exciting episode of the DripAdvisor.com Drip of
the Week. Stay tuned next week, as we will spotlight another
stock worthy of the DripAdvisor.com limelight.
Remember:
Plan your trade, and trade your plan.
Until Next Week,
Nich Sheldon
Editor In Chief
www.dripadvisor.com
questions@DripAdvisor.com
Broker Recommendations
Strong Buy 3
Buy 3
Hold 10
Sell 0
Strong Sell 0
Brokers Covering 16
DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = Yes
Accept Foreign Accounts: Yes
Temper Enrollment: Yes
Min/Max Investment = $25-$100,000/year
Reinvestment Fees -
Dividend investment fees: $0.09/Share
Cash investment fees: $0.09/Share
Auto reinvestment fees: $0.00
Transfer Agent:
FirstEnergy Corp. Investor
800-736-3402
Corporate Headquarters:
FirstEnergy Corp
76 South Main Street
Akron, OH 44308
Phone: (800) 736-3402
Fax: (330) 384-3772
