Zacks.com Announces That Bill Martin and Matt Ragas Highlight the Following Stock: Southern Union

Business Wire, May 27, 2005

CHICAGO -- Bill Martin and Matt Ragas, editors of the FindProfit newsletter, continue to view Southern Union (NYSE:SUG) as an attractive play for long-term focused accounts. Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=84

Highlights from the May 25th Featured Expert column by Bill Martin and Matt Ragas include:

The usually sleepy utility sector is all of a sudden alive with consolidation pressure. Bill Martin and Matt Ragas' only hat in this consolidation ring right now is Long Term Growth portfolio holding, Southern Union (NYSE: SUG). SUG operates the largest liquefied natural gas (LNG) terminal in the country, 18,000 miles of pipeline, as well as two local gas distribution businesses - Missouri Gas Energy and New England Gas Company - that reach 1 million customers.

Some on Wall Street, including Bill and Matt, have speculated that SUG may seek to sell one or both of these distribution businesses. A move like this would free up capital to further de-leverage the balance sheet and to invest in incremental ``low risk growth opportunities`` in SUG's LNG and pipeline businesses. It also would further improve the growth profile of SUG's overall business, since the LNG and pipeline businesses tend to have faster growth than the utilities. The net result of all of this would likely be a higher earnings multiple.

It's not clear if or when SUG may seek to divest its utility operations, but the recent consolidation activity in the sector certainly creates a favorable backdrop for such a move over the coming couple of years. In addition to SUG's impressive LNG and pipeline businesses, Bill and Matt view a potential transaction like this as another potential upside.

Get Bill and Matt's complete analysis on Southern Union by clicking: http://at.zacks.com/?id=85

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