When Greed Interferes: Puget Power (PSD)

On Friday February 7th Puget Power announced the closing of the sale of its core business at $30 per share. Regular readers of my blog will recall that I recommended a purchase of PSD in November of last year at $18. If one includes the $.25 dividend payment from Jan 16th, and the pro rata dividend of $.04 this transaction returns $30.29, or a profit of an impressive 68%.

While I am very happy to have a 68% win on a 3 month investment (and hope several of you are also counting your fortunes this weekend) I think this is a good time to turn around and look at the trade again to see if it was a wise trade or a bit of wisdom and a bit of luck.
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Stock Analysis PSD- Puget Power

What I paid for it

$18.00
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What I like about it:

• Fair insulation from credit problems, and recession.
• Good dividend yield at 4.1% (distribution Dec 1).
• Company due to be purchased at $30 pending one final approval (this is the big one).

What I don’t like about it:

• P/E higher than industry, sector, and S&P.
• Price to Sales higher than industry, sector, and S&P.
• Doesn’t really meet any of my traditional Graham investing rules.
• One should never buy into litigation.