PowerRatings Stock Spotlight: Hawaiian Electric

Warm visions of bikinis, hula dancers and surfers are what most people see when they think of the Hawaiian Islands. If you're old enough to remember, you may hear the theme music to the police drama, Hawaii Five-0 and the familiar "Book 'em Dano" line when you visualize these exotic islands in the middle of the Pacific Ocean.

Most stock traders don't think of the thriving Hawaiian economy when choosing investments. This week's Long Term PowerRatings Stock Spotlight on Hawaiian Electric Industries (HE | Quote | Chart | News | PowerRating) may add, "good place to invest" to your thoughts when contemplating the 50th state.

Hawaiian Electric Industries has earned a 9 Long Term PowerRating. As you may know, 9 rated stocks have a 79.1% chance of being higher one year from today. Stocks that are awarded the highest rating of 10 have proven to have an 81% chance of trading higher one year from now.

PowerRatings are a statistically based stock picking tool based on 12 years of extensive studies across most market conditions. Long term investors should seek to build portfolios made up of top rated stocks and avoid those with the low ranks of 1, 2 or 3. These low rated stocks have proven to simply be too volatile, therefore risky to be part of your prudent, conservative long term holdings.

Our featured stock this week supplies 95% of Hawaii's population with electricity. This is over 400,000 customers in the state who rely on HE for their power needs. The company also operates the third largest bank in the state, American Savings Bank, which provides a wide variety of financial services to citizens of the island state. A cursory reading of their financial statements indicates a dramatic drop in consolidated net income in the second quarter of 2008 compared to the second quarter of 2007. However, a deeper reading reveals that there was a successful restructuring of the bank division balance sheet in June 2008, that reset $35.6 million dollars of previously disclosed after tax charges. Had this restructuring of the papers not taken place, HE would show a substantial increase in net income and improvement quarter after quarter.

Figure 1: HE PowerRatings Chart

Fundamentally, this company appears to be thriving. Technically, the stock has been in an uptrend since July 14th, 2008. It experienced one pull back in the start of September back to the 50-day Simple Moving Average then resumed the overall uptrend, despite several relatively wide swinging days. The fundamental outlook combined with the technical picture on top of the high 9 Long Term PowerRating make a strong case for this stock from the exotic island state of Hawaii.

Learn what you need to know as an active investor looking to invest in companies with a history of financial strength and a track record for growth. Click the link above or call us at 888-484-8220 extension 1 to get your copy of the "5 Secrets to Successful Stock Investing" today!

David Goodboy is Vice President of Marketing for a New York City based multi-strategy fund.