I'm beginning to look at independent power producer Mirant
Although the company slightly missed average net profit estimates, earnings per share generally take a backseat to EBITDA for these power companies. To that end, Mirant reported that adjusted EBITDA in the second quarter rose more than 114%, though I believe that was still a bit shy of some expectations.
As part of an ongoing effort to restructure the business and its collection of operating assets, the company announced that it is looking to sell six gas-fired intermediate and peaking plants. Since these collectively represent about 3,500 megawatts of generating capacity, I think that the company could get somewhere in the neighborhood of $700 million for them. That's a pretty rough guesstimate, though, and it's possible that the increasing volume of private equity floating around might lead to better prices.
In the meantime, little has changed about Mirant since last quarter. Independent power producers like NRG, Mirant, and Dynegy
Given some questionable management decisions, I can't say that Mirant is my favorite idea in independent power. By the same token, it's a sector with broadly positive fundamentals, and the stock seems undervalued -- not the worst idea I've seen today.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).