As part of our special focus on Investing in Utilities in the latest issue of TWST, we spoke with analyst Marc De Croisset of Macquarie Capital (USA) Inc. Mr. De Croisset told us one name that has been looked over by investors but presents a good investment is Portland General Electric (POR). We asked him to tell us a little bit about it, and why it’s been overlooked by investors:
Mr. De Croisset: It’s a puzzle to me [as to why investors are not interested]. There is some litigation overhang, which we think has more bark than bite. There is some volatility in the earnings stream due to the structure of the fuel recovery mechanism. The utility is also regionally focused. This may scare some people away as it leaves POR in a no man’s land of investor risk appetite. We view this as an opportunity and not a liability. POR just got left behind…POR issued equity in the first quarter. We don’t expect another equity issuance for some time. The rate base growth of that story is very significant, and I’m hard pressed to understand why it’s trading at such a deep discount to book value.
For the complete Investing in Utilities issue, including a full interview with Mr. De Croisset as well as interviews with additional analysts and CEOs of top companies in the space, click here.
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