5 Stocks Negatively Impacted By The LA Wildfires

1. Edison International (NYSE:EIX)

Edison International is an electric power generator and distributor company operating in South California. It supplies electricity to the public authorities, residential, commercial, agricultural, industrial, and other sectors. Being one of the major suppliers of electricity to Southern California, the Los Angeles wildfire harmed Edison International’s business. Current estimates show that the massive fire in Los Angeles caused damages worth $150 billion. The company will lose revenue as it is no longer supplying electricity to destructive areas.

The company is facing legal repercussions of the ongoing crisis, with the first lawsuit claiming that its equipment sparked the massive wildfires in the Los Angeles area. The lawsuit on behalf of the renters, homeowners, and business owners claims that a power line pole initiated the massive fire that destroyed the community of Altadena. According to the lawsuit, the company was unable to manage its electrical equipment properly, which caused damage to private property.

Since the fire started, Edison International shares have declined by 27%. The stock price has now returned to October 2023 levels. Even though it possesses a weak balance sheet, the stock valuation is still attractive. So it might be a good option for those willing to take a risk. Otherwise, things are not going in favor of Edison right now.

Edison International is not on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held EIX at the end of the third quarter which was 32 in the previous quarter. While we acknowledge the potential of EIX as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as EIX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.