This article was originally published in the Friday File for Irregulars on July 6, it was opened up to all readers on October 11 but has not been edited, updated or otherwise changed.

Today we’re taking a look at a new teaser that started running this week, with most folks apparently getting it yesterday or today if the questions that are pouring in are any indication. The pitch is from WSD Insider, which is apparently the new name of the White Cap Report from Louis Basenese, Karim Rahemtulla and the gang (seems like many of the Agora-affiliated newsletter groups change their name every couple years, and they always change the name from something distinctive to something more generic — I suspect that they do this solely to confuse yours truly, and it’s working).

Here’s how they get us lathered up:

“On March 12, 2012, a clandestine back-room deal was given the green light – creating a $34 billion energy virtual monopoly.

“Now, an unforeseen chain reaction is about to unleash a massive stock move – beginning as early as August 8.”

And they draw an enticing and intriguing picture — as they always do — of the back-room dealing that led up to this deal that you just have to get in on … here’s a taste:

“A simple phone call set the wheels in motion.

“Not an official ‘corporate conference call.’ Just two guys talking. One in Chicago. The other, in Baltimore.

“Then, a private dinner two weeks later. In Palm Desert, California.

“Neutral territory.

“Away from prying eyes.

“Soon, key players were meeting secretly at exclusive clubs and dining rooms.

“Even switching out briefcases on occasion – to conceal identities and throw people off the track.

“Clandestine meetings with the big money soon followed – Morgan Stanley, Barclays Capital, JPMorgan.

“These talks were so secretive, one company even frosted the windows surrounding their boardroom – so no one on the outside would know who was meeting on the inside.

“According to uncovered documents, they called their deal Project Lightning.

“The main entities each had code names, too: Bolt and Electron; Ginger and Allspice.”

So that’s the basic idea — this “Project Lightning” was set up on the down low, to make sure that no one outside the inner circle got wind of what would be such a massive deal to enrich us all (or at least, those of us in the know).

The tease keeps flowing for several pages, telling us about the catalysts that are coming up this Summer and which will ramp up revenues for this company … which is, of course, just what we like to hear.

The August 8 “catalyst” is just that that’s the peak of the Summer for most of the US, the hottest time of year and the time when electricity consumption usually spikes with air conditioning. And the basic argument for other “unknown” catalysts for this company is that investors don’t realize how much economy of scale this new firm will have, or how much they will benefit as (if) electricity rates rise.

And they also hint at a way to make 1,000% quick gains from this “Project Lightning” even as they clarify that it’s not a “get rich quick” investment — so that means they must be recommending buying the stock but perhaps also speculating a bit on some call options if they think the shares will move quite a bit in the short term.

Because, as you’ll see in a moment, there’s no way that this stock itself is going to go up 1,000% this year — or even this decade, in all likelihood. What they’re teasing is a large utility company, and it may indeed be profitable and a good buy, but it’s not going to double this Summer unless something really, really wacky happens.

But which electricity seller are they teasing with this “Project Lighting” business? We do get a few more clues, along with another helping of hyperbole:

“On March 12, 2012 – approximately 18 months after that first fateful phone call – the federal government gave its blessing to Project Lightning.

“And what began as a secretive chat between executives became the largest player in one of the most important industries in America… energy.

• With $74.5 billion in assets
• $32.7 billion in revenue
• And $36.8 billion in market capitalization

“Yet despite the size of this new powerhouse, few people are aware of what’s really happening behind the scenes.

“And that’s exactly what we’re going to exploit.

“In the coming months… after this company has doubled or even tripled in price… a lot of people are going to be sitting around slack-jawed, wondering how they missed out on this.

“They’ll look at Project Lightning’s meteoric rise – and they’ll write it off to blind luck. Or a freak coincidence.”

More? Sure, we can scooch a few more details out of the ad:

“Project Lightning is the single biggest player of its kind in the market.

“But here’s the real opportunity:

“Despite its size, despite their immense capacity to control their market… the stock price hasn’t caught up yet.

“Meaning we have the chance to get in on the “ground floor” of this monster corporation – and pick up shares at a steep discount to their real value.”

He also compares this company to Apple and ExxonMobil and Cisco, implying that buying now is like getting in early on those stocks, before the iPad or before the price of oil went over $30 a barrel or before the Internet went public, respectively.

The tease says that they’re operating a “virtual monopoly,” with control of production, distribution and sales, and then we get yet a few more specific clues (this is actually turning out to be perhaps a bit too easy for the Thinkolator with all these clues thrown in … but we won’t complain) …

“Project Lightning is a power company.

“The largest, most powerful provider of electricity on the continent.

“Its empire stretches across:

• 47 states
• The District of Columbia
• The Canadian provinces of British Columbia, Alberta, and Ontario

“It has 6.6 million customers – including two-thirds of the Fortune 100 companies – dependent on them for electric power.”

So what is this “Project Lightning?” Well, in layman’s terms … it’s giant utility Exelon (EXC), though the actual “project lightning” deal that created the “new Excelon” on March 12 was the merger of Exelon with Constellation Energy. There’s a pretty good brief article from the Chicago Tribune here that gives some of the details of that deal.

Exelon would be one of the utilities I’d look to first if I were investing in a utility stock now, it carries a reasonable valuation and dividend (PE of about 12, dividend yield of over 5.5%) so it’s looking pretty cheap when it comes to electric utilities — and utilities are bought almost exclusively as stable income-producers, so the dividend matters a lot. There’s plenty of reason for the relatively low valuation — EXC has had a bad five years of declining earnings, and probably positioned themselves too aggressively for the “cap and trade” world they expected. Another cause of the low valuation is probably uncertainty about the merger given their expensively acquisitive history and Chesapeake’s rough condition in recent years. The collapse in natural gas prices has eroded some of the margin advantage they enjoyed over some of their competitors, too, though that doesn’t seem a likely reason for a big discount (Excelon is the biggest nuclear power generation company in the US, as well as being a large producer of power from hydroelectric and nat gas and other relatively clean fuels, they don’t burn much coal compared to other power companies — established nuclear plants are very cheap to operate on a per-megawatt basis, so they enjoyed some boost from that in past years).

That’s a high dividend, and they have enoughearnings to cover the dividend for at least the near term (earnings nearly $3 per share, dividend $2.10 per share — be cautious about the dividend reported in places like Yahoo Finance, it’s a little screwy because of the merger), but the dividend is not likely to climb rapidly … they’ve paid the same per-share dividend for more than three years now, though they do have a history of fairly frequent dividend hikes in the years before 2008.

And yes, there was an “invitation only” meeting in Houston, TX a couple months ago where the company laid out how profitable it could be with their new larger profile and their additional exposure to retail electricity customers from Constellation … though it wasn’t exactly secret, it was the Bank of America/Merrill Lynch “Megawatt Roundup” conference, and the supporting presentation materials and the actual recording should be available to you from the company’s website here if you want to get the top-secret info for yourself.

Exelon carries some risk, to be sure — they have quite a bit of debt (if you remember, Constellation at one point was having so much debt-related trouble that Berkshire Hathaway almost snuck in and bought ’em cheap), they own several nuclear power plants that will make people nervous if anything bad happens regarding nuclear power, and they do have to integrate what is a fairly complex and very large company, which can always bring a few surprises along the way.

Exelon’s historic focus on cap-and-trade and green(er) energy, and their buying spree over the years as they’ve snapped up more nuclear and natural gas generation assets, means that they have relatively low regulatory risk from high-pollution coal plants, which could be a major issue for some power companies in the coming years — I’d be more comfortable owning Exelon than a big coal plant owner like Southern Company (SO), Duke Energy (DUK) or AEP (AEP), for example — not that those companies are bad, necessarily, just that I’d rather buy utilities that are more clean/gas focused than coal focused, given a choice. And they have good regional diversification because they operate in almost every state — so a weak economy in California won’t crush their earnings like it would one of the California-centric utilities like Calpine, for example (though Calpine is also interesting because of their good leverage to low natural gas prices — I think they’re the most nat gas-exposed electric utility).

But will Exelon suddenly turn this new, larger size and broader reach into a stock price that’s 1,000% higher? That seems unlikely — I do think the stock has come down probably more than is deserved over the last four years, both because they positioned themselves for an aggressive “cap and trade” system that didn’t materialize and because of nuclear regulatory risk and the increasing scrutiny that investors gave to debt and overpriced acquisitions in the financial crisis, but they are huge and relatively well-positioned for a world in which air pollution is more regulated and natural gas inexpensive.

I don’t personally own any utilities right now, but given the fact that many of them have gotten arguably overpriced in the “flight to dividends” I do think Exelon might be worth a look. I can see the shares possibly getting a better valuation as the merger works its way through the books, but EXC has also traded at a lower PE ratio than most of its peer utilities for several years now — if they do grow into a forward PE of 16-18 like some strong utilities have , they’d get a share price in the neighborhood of $48. That’s a nice 25-30% bump from the current price, but it’s not 1,000%. If you think analysts are understating their profit potential, as the Wall Street Daily folks seem to believe, then you can certainly bump that up a bit more — but I have a hard time drawing a picture that gets EXC to much above $55 over the coming year. If you’re looking for those 1,000% returns, I would imagine that the Wall Street Daily folks are probably suggesting some sort of options trade that’s predicated on a quick bump up in the shares — EXC is a utility that has had a generally declining share price for many years, so the call options are cheap, you could easily get 1,000% returns IF the stock goes to $50 in six months and you happen to bet correctly on that with call options.

What’s that mean? Well, for example, if you buy the January $40 call options that would cost you about 40 cents per share right now — so if the stock goes to $50, your 40 cents is suddenly worth $10. That’s not 1,000% either, but it ain’t bad. And clearly, the market thinks it’s unlikely.

That’s not to say it can’t happen, just that I’d urge investors to treat this as a stable utility, with an above average dividend and good positioning, and enjoy a bit of capital gains on top of that 5%+ dividend if they come, but don’t go betting the house on the expectation of huge instant gains. Morningstar, for what it’s worth, also says that Excelon is worth buying here — they say it has a fair value of $54 and put it down as “consider buying” under $38. They have a lot of moving parts, with the consumer utilities providing a solid base of revenue and exposure to low power costs (better margins when power costs are low) and the generation assets (nuclear and gas plants, some hydroelectric, etc.) providing nice high-margin revenue when wholesale power costs rise without lifting the cost of their input commodities.

They’ve overpaid for acquisitions before, including for other consumer-facing utilities, so the Constellation deal does not make Exelon a slam dunk, to be sure, but there are more catalysts for potential long-term capital gains than with the typical utility, and they have been beaten down more than most utilities and have some room for stock price recovery if the business does reasonably well over the coming several years. If you buy EXC now, you’re betting that they will be able to use their large customer base and broad array of low-cost and “cleaner” generating assets to boost margins, and that they are going to eventually turn around their gradual performance decline over the past five years and return to earnings growth, even if it’s very tepid earnings growth. That should be enough, with the high dividend, to make EXC worth considering, but you need to be a true believer to think the revaluation of the shares will happen quickly — even if they execute well on integrating Constellation, investors have been burned by Excelon for several years and will probably be fairly slow to revalue the stock.