FE

FirstEnergy Corp

Energy, Event Driven/Special Sit


Presented:01/27/2017
Price:$29.99
Cap:$12.81B
Current Price:$43.50
Cap:$25.05B

Presented

Date01/27/2017
Price$29.99
Market Cap$12.81B
Ent Value$36.10B
P/E RatioN/A
Book Value$27.02
Div Yield0.05%
Shares O/S427.00M
Ave Daily Vol4,568,420
Short IntN/A

Current

Price$43.50
Market Cap$25.05B
FirstEnergy Corp. operates as a diversified energy company. It engages in the generation, transmission, and distribution of electricity, as well as energy management and other energy-related services through its subsidiaries. It operates through the following segments: Regulated Distribution, Regulated Transmission, and Competitive Energy Services (CES). The Regulated Distribution segment distributes electricity through FirstEnergy's utility operating companies, serving various customers within Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York. The Regulated Transmission segment transmits electricity through transmission facilities owned and operated by FirstEnergy's utilities and the regulatory assets. The CES segment supplies electricity to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Michigan, New Jersey and Maryland, and the provision of partial POLR and default service for some utilities in Ohio, Pennsylvania and Maryland, including the utilities. The company was founded in 1996 and is headquartered in Akron, OH.

Please note, this is an update to FirstEnergy Corp (FE) - Short, which was originally presented on December 1, 2016.

Publicly traded companies mentioned herein: FirstEnergy Corp (FE)

Highlights

The presenter remains short shares of FirstEnergy (FE), and continues to believe the utility’s capital needs will lead to a meaningful decline in the stock price (i.e., to $20 in a best case for the short). In his opinion, it is one of the most asymmetric opportunities on his screen. Bulls continue to see upside based on valuation and a successful separation of FE’s Competitive Energy Services (unregulated merchant power) business; however, this viewpoint ignores the company’s exposure to tax reform (it is one of the most exposed in the S&P 500), which could be a mid-year 2017 catalyst. And, the rising rate environment is problematic for utilities.

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Idea Discussion

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