PNM Resources Shares Popped: What You Need to Know (PNM)

PNM Resources Shares Popped: What You Need to Know

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of PNM Resources (NYSE: PNM ) popped by as much as 20% today on news that it's adopting a new strategic direction while exiting its competitive business in Texas.

So what: The company has reached deals to sell its Texas businesses in order to focus on its regulated utilities. British utility Centrica has agreed to purchase First Choice Power, an energy retailer based in Texas, from PNM for $270 million in cash. PNM is also exiting its ownership role in Optim Energy so that it can focus its resources on operating regulated electric utilities.

Now what: PNM CEO Pat Vincent-Collawn said the changes "will result in PNM Resources being a stronger company with a reduced risk profile and more stable earnings and cash flows." The company plans on using the net proceeds to repurchase debt and equity. The board has signed off on repurchasing up to $75 million of long-term debt and preferred stock. As a result, PNM updated its full-year outlook and now expects ongoing earnings to be between $0.98 and $1.05 per diluted share, up front a range of $0.80 to $0.92. Shareholders are clearly impressed with the plans as the stock has jumped significantly, wiping out most of the decline caused by the recent overall market turmoil.

Interested in more info on PNM Resources? Add it to your watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Evan Niu holds no position in any company mentioned. Check out his holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.