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Stock #2: Entergy (ETR)
The utility sector is a great place to look for turnaround candidates — especially wholesalers. These companies are still
highly profitable, but have suffered from “The Great Selling Funk.” Case in point is Entergy (ETR).The nation’s second largest nuclear generator, Entergy owns and operates power plants with approximately 30,000 megawatts
of generating capacity. The company also delivers electricity to 2.7 million retail customers in Arkansas, Louisiana, Mississippi
and Texas.With political sentiment shifting in favor of nuclear as a greener option than fossil fuel, ETR has maneuvered itself into the
right place at the right time. Profits have held up better than those of most wholesalers, and should trend marginally higher
in 2009.At a P/E ratio of less than 11 (based on actual 2008 earnings), your risk appears modest compared with a potential return, including
dividends and price gain, of 30%–50% in the coming year. Current yield: 4.1%.
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