.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;}
Dear Mr. Berko:

Dear W.W.:

CenterPoint Energy Inc. (CNP-$14.16) is a holding company for Houston Electric. It delivers electricity via transmission lines to more than 2 million folks in the Houston perimeter. Its natural gas division, CenterPoint Energy Resources, or CERC, serves 3.2 million residential, commercial and industrial customers in Arkansas, Louisiana, Oklahoma, Mississippi, Minnesota and Texas. CERC owns 8,100 miles of gas transmission lines, 3,500 miles of gathering pipelines and six natural gas storage fields with a combined daily volume of 1.2 billion cubic feet. CenterPoint has been selling power since 1882, and the dividend of 76 cents yields a solid 5.4 percent.

Argus Research ranks CP as a buy and believes it will do well in the coming three to six years. Value Line has a five-year outlook and places CNP’s price at $25, Standard & Poor’s gives CNP a three-star ranking, Reuters rates it as “Outperform” and Market Edge recommends a “long” position.

CNP is a plain, plodding, good utility. The movement to clean energy gives a boost to CNP’s pipeline business. Its strong cash flow of $3.60 a share, a good dividend growth record and a 19 percent return on equity convince most investors that CNP should be a comfortable, long-term investment. I would not hesitate to own a 200-share position, providing you place a good till cancel/do not reduce order at $11.25.

Trump Entertainment Resorts Inc. (TRMP-$0.24), founded in 1995, owns three casino-hotel properties in the United States: Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino and Trump Marina Hotel Casino. I wouldn’t walk within a mile of this outfit’s balance sheet or its income statement.

Trump’s properties have been restructured, destructured and constructured almost as frequently as Donald Trump has changed wives. Trump is a showman, a hustler, an entertainer, but certainly not a savvy hotel/casino operator like the big boys in Las Vegas, all of whom, wearing handcuffs and with one eye closed, can eat Trump’s lunch.

Frankly, I think only a retard from Mars would be dumb enough to buy 10,000 shares of TRMP, and Trump knows it. The balance sheet is much too leveraged for a sugar daddy to rescue the company. Trump knows that, too. Even if Trump had the cash to invest, I doubt he’d waste it here. Donald Trump relied so heavily on debt he doesn’t personally guarantee to build his empire that I think he knows a turnaround is impossible. At best, TRMP will be faced with a massive restructuring.

These properties were never worth admiration. Trump built them with gusts of hot air, panache, persiflage and palaver. His management style certainly lacks the sophistication, focus and vision that mark the successes of the real professionals in Las Vegas. In fact, Donald Trump’s success is not his business ventures, but in his canny ability to fool a lot of people most of the time. And while his properties are hanging over the abyss, he’s laughing at the people who swallowed his bait. I think TRMP is a stinky speculation.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net. © Copley News Service