It also spent around $20 billion on a train set. But there are rumors in the UK that Warren Buffett is now in the market for something to power the train set - a utility company called International Power (IPR). Mr Buffett has stated more than once that he thinks the bottom is in in the markets and that this is a good time to pick up some stocks on the cheap. International Power has certainly fallen a long way off its top back in 2007.
International Power 10 year Chart with 200 day M.A.
International Power 1 Year Chart with 200 day M.A.
According to the Daily Mail newspaper in the UK, Warren Buffett is eyeing up the electricity generator, a rumor which caused the stock price to rise 3.2p to 269.4p.
International Power has interests in more than 40 power stations in over 20 countries. It recently banked around $500 million in profit after it sold its Czech business to investment firm J&T Group. Broker Cazenove has upgraded IPR to outperform from neutral with a fair value estimate at 390p, after a positive interim management statement.
What does International Power do which would explain why Warren Buffett may be interested in it?
Well, the company is a leading independent electricity generating company with interests in over 32,000 MW (gross) of power generating capacity in 21 countries.
They use their capabilities "to successfully and profitably develop closely-linked businesses" which include:
- desalination of seawater to ensure the wholesale production of fresh water
- steam production and distribution
- district heating using cogeneration
- a small but expanding electricity retail business
- gas transportation
- open-cast coal mining
- renewable energy
So is Warren Buffett interested in International Power? Well it certainly would seem to be a plausible theory given his interest in long-term stock holdings and his views on where the economy is heading, but time alone will tell. Unless you have some information you would like to share in the comments !
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