Third Point Management, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. During the First Quarter, Third Point returned -11.5% in the flagship Offshore Fund. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Third Point Management mentioned PG&E Corporation (NYSE:PCG) and explained its insights for the company. Founded in 1905, PG&E Corporation (NYSE:PCG) is a San Francisco, California-based natural gas and electric services provider with a $24.9 billion market capitalization. PG&E Corporation (NYSE:PCG) delivered a 2.46% return since the beginning of the year, while its 12-month returns are up by 15.44%. The stock closed at $12.23 per share on May 06, 2022.
Here is what Third Point Management has to say about PG&E Corporation (NYSE:PCG) in its Q1 2022 investor letter:
“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.”
Gas
Our calculations show that PG&E Corporation (NYSE:PCG) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. PG&E Corporation (NYSE:PCG) was in 59 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 54 funds in the previous quarter. PG&E Corporation (NYSE:PCG) delivered a 3.37% return in the past 3 months.
In March 2021, we also shared another hedge fund’s views on PG&E Corporation (NYSE:PCG) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
