DYN

Dynegy Inc

Energy


Presented:03/31/2015
Price:$31.43
Cap:$3.91B
Current Price:$33.59
Cap:$3.37B

Presented

Date03/31/2015
Price$31.43
Market Cap$3.91B
Ent Value$9.53B
P/E RatioN/A
Book Value$21.18
Div YieldN/A
Shares O/S124.44M
Ave Daily Vol1,650,000
Short Int7.01%

Current

Price$33.59
Market Cap$3.37B
Dynegy Inc., through its subsidiaries, produces and sells electric energy, capacity, and ancillary services in the United States. It operates in three segments, Coal, IPH, and Gas. The company sells its services on a wholesale basis from its power generation facilities. It has a fleet of 15 power plants in 5 states totaling approximately 13,000 megawatts of generating capacity. The company serves a range of customers, including regional transmission organizations, independent system operators, integrated utilities, municipalities, electric cooperatives, transmission and distribution utilities, and power marketers; financial participants, such as banks and hedge funds; and residential, commercial, and industrial end-users. Dynegy Inc. was founded in 1984 and is headquartered in Houston, Texas.

Publicly traded companies mentioned herein: Duke Energy Corp (DUK), Dynegy Inc (DYN), Franklin Resources Inc (BEN)

Highlights

The presenter is long shares of independent power producer (IPP) Dynegy (DYN), which operates primarily in the PJM, MISO and ISO-NE power markets. The Federal Energy Regulatory Commission (FERC) approved DYN's $6.25 billion purchase of 12,500 MW of generation from Duke Energy and Energy Capital Partners on March 29th, which pushed shares up to $31 from $28. The presenter believes this deal has created an attractive opportunity, and skews the risk/ reward profile “massively” to upside. DYN was able to acquire these assets at an attractive price on an EV/ EBITDA basis, and with the PJM going to a capacity market future EBITDA and cash flow generation could drive the stock from the low $30s to the mid-$40s.

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