AYE is the utility holding company for Monongahela Power Co., The Potomac Edison Co., West Penn Power Co., Allegheny Generating Co. and others. For the FY ended 12/31/00, revenues rose 43% to $4.01B. Net income before extra. item rose 10% to $313.7M. Results reflect the acquisition of the assets of West Virginia Power and increased number of customers, partially offset by higher interest expenses due to increased LT debt outstanding.

February 22, 2001

Allegheny Energy Incorporated (AYE) provides its customers with electric generation and electric/natural gas delivery. The company also invests in and develops telecommunications and energy-related projects. Investing in utility companies generally requires a lot of patience, as profits are slowly accumulated over time. However, it seems this rule doesn’t apply to AYE shares, which have more than doubled over the last year. What’s more, we also like AYE as a split candidate. Currently, the company has 110.44 million shares outstanding and 260 million authorized, enough for a 2:1 stock split. Presently, shares have advanced nearly 20% over the last few weeks and could be gearing up for a break out rally. So, looking forward, we’ll look for initial resistance to arise at the all time high of $48.65. Advances through resistance, when combined with good volume of 670,000 shares or better will present us with our first potential entry point. Further opportunities will come when AYE shares advance through the $50 mark. As for support, we expect the $47 mark to be firm, bolstered by the 5-dma of $47.05. We’ll set our stops at $45.94.

Picked on February 22nd @ $48.22
Change since picked 0.00
Stop Loss @ $45.94