01. PG&E Corporation (NYSE:PCG)
Third Point’s Stake Value: $652.692 Million
Percentage of Third Point’s 13F Portfolio: 15.44%
Number of Hedge Fund Holders: 51
P/E Ratio (Non-GAAP) as of October 09: 13.95
PG&E Corporation (NYSE:PCG) was incorporated in 1905 and is based in San Francisco, California. PG&E Corporation (NYSE:PCG), through its subsidiary, Pacific Gas and Electric Company, engages in the sale and delivery of electricity and natural gas to customers in northern and central California, the United States.
On October 7, analyst Shelby Tucker from RBC Capital raised his price target for PG&E Corporation (NYSE:PCG) from $16 to $19 and maintained an Outperform rating on the shares. The company’s efforts to prevent wildfires and a number of recent catalysts, including its inclusion in the S&P 500, have “encouraged” the analyst. According to Tucker, investors are more at ease with the Fire Victim Trust sales because the market’s response to the most recent block of 35M shares was more subdued.
A total of 51 hedge funds hold a stake in PG&E Corporation (NYSE:PCG) as of Q2, 2022. Dan Loeb’s Third Point is the largest investor in PG&E Corporation (NYSE:PCG) by owning 65 million shares that are worth $652 million.
In its Q1 2022 investor letter, Third Point Management mentioned PG&E Corporation (NYSE:PCG) and explained its insights for the company. Here is what the fund said:
“We continue to see immense value and potential in our position in Pacific Gas & Electric, which emerged from bankruptcy just two years ago. PG&E’s new CEO, Patti Poppe, has transformed the organization, creating a new leadership and safety culture around a talented, committed, and dynamic executive team that is rethinking the way the Company addresses the energy needs of Northern Californians. California is at the forefront of the new energy transition with aggressive renewable procurement goals and high electric vehicle adoption, yet the state faces escalating climate change risks due to extreme drought conditions and wildfires. These conditions present unique challenges to utilities operating in the state. Patti and her team have brought new and creative solutions to these challenges with her focus on a lean operating system and an ambitious undergrounding plan.
In April, PG&E Corporation reported a straightforward and uneventful set of a results, delivering on its promises to customers and investors. As investors, we celebrate that simplicity. At current prices, the Company trades at under 12x 2022 consensus earnings compared to the utility index average of 21x and below its closest California peer, Edison International, at 15x. While there is an overhang from shares to be monetized by the PG&E Fire Victim Trust, PG&E will benefit from the reinstatement of a cash dividend in 2023 and if, as hoped, it is included in the S&P 500 index. Over the next year, we think PG&E will Page 7 continue to re-rate towards industry averages while also growing earnings at an industry-leading 10% per year. In this type of market environment, the financial equation of consistent earnings growth and multiple re-rating makes for a wonderfully boring story and a solid anchor for our portfolio as Third Point’s largest position.”
You can also take a look at 11 Best Dividend Stocks Under $50 and 14 Best Clean Energy Stocks To Buy Now.
