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Tuesday,
November 18, 2008
(Cont'd from
above)...
Jim:
We know about hedge
funds gone wild,
selling these stocks
because of
redemptions. I gave
you that story with
Quanta Services Inc. (PWR*).
That's only part of
things.
With SGR, this is
also the case of our
thesis just not
playing out the way
we wanted it to. We
thought this company
would make big money
because of nuclear
power... the
renaissance in the
U.S. and overseas...
where, in the U.S.,
building its first
nuclear power plant
in about 30 years,
India and China both
building more
nuclear power
plants...
The nuclear
renaissance hasn't
happened... at least
not in the U.S....
Aside from a couple
of companies, like
NRG, that have
applied for permits,
there just seems to
be... we don't seem
to have the
political will to
get it done,
especially now that
we know that Obama,
who favors
renewables over
nukes, will be the
next president, and
not McCain with his
love of nuclear
power.
Now, I can tell you
that he can claim
that he likes
nuclear power, but
it wasn't his main
campaign thrust.
It's too clean to
deny though.
SGR does still
expect to see a
number of nuclear
projects in 2009,
but they're not sure
if they're going to
get approval to
start building.
That's one thing to
worry about. Also,
when the company
reported its fiscal
fourth quarter, at
the end of October,
Wall Street was
disappointed with
the guidance for
2009. We have to
find out whether it
was disappointing or
whether it was just
Wall Street that was
disappointed...
Everybody's looking
for project
cancellations now,
and SGR said that it
wasn't seeing signs
of those when it
reported... although
we are now seeing
serious
cancellations when
it comes to other
businesses, like oil
refining...
something that SGR
has exposure to,
according to The
Financial Times...
Apparently, only 30
of the 160 refining
projects announced
since 2005, are
still slated to go
ahead.
So, on the one hand,
we've got a lot of
good reasons to fear
and engineering
meltdown, now that
oil prices have
fallen, and project
cancellations are
coming. But, on the
other hand, SGR's
only a $13 stock.
Frankly, that
strikes me as
absurd, given the
backlog, the
expertise, and the
long-term need to go
green.
But maybe I'm the
crazy one. So, I
wanted to talk to
the company's CEO,
also founder,
president and
chairman, Jim
Bernhard, to get a
better sense of the
business.
Mr. Bernhard,
welcome to Mad
Money...
● ● ●
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Jim's comments
AFTER the interview:
And that's exactly
why we're
recommending it.
We're recommending
stocks that are
either
recession-resistance...
toothpaste, food...
or are very high
dividends that are
sustainable... or
are companies that
are trading at or
near cash... and
that's why I was
delighted to have
you on, because you
are at or near cash
and it makes no
sense to me.
Read Jim's next Segment
here
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