Capstone Infrastructure Corp T.CSE.PR.A

Bristol Water - Here is why it is only a minor issue

[Analysis98]

Originally BW asked for approval to spend 541 million pounds over the next five years.  This five year capital spending would make sure there would be enough clean water for a growing population in the future.  Ofwat initiall proposed the five year capital budget be reduced to 359 million pounds.  The final ruling increased the five year capital plan to 409 million pounds.

It means the company need to spend LESS money over the next five years.  What CSE lost is the profit they would make on the five year capital plan because of small customer rate reductions.  This small reduction on customer rates is why TD Securities said it was only a minor negative development for the company.

Translation scared investors who are watching the oil sideshow saw the 409 million dollar number in the press release and paniced / sold when they didn't understand what they were reading.

CSE had to wait for this ruling before they could release their 2015 plan for the whole company and that is what next week's conference call is all about.  Remember they have two major wind projects starting up in Q1 and Q2 of 2015 and we should get an update on these as well next week.  I bought more shares on Friday and will buy more on Monday.