NI - Embedded Expectations Analysis - 2019 05 13
NiSource Inc. (NI:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Assets, with a 1.2x Uniform P/B. At these levels, the market has bullish expectations for the firm, but management is concerned about low-pressure system remote monitoring capabilities, the sustainability of conversions to natural gas, and the effect of the Merrimack Valley gas line explosionsSpecifically, they may be concerned about their low-pressure system remote monitoring capabilities, their plan to enter into tax equity-type structures to take advantage of NOLs, and their new renewables agreements. Moreover, they may be exaggerating their prioritization of safety and the sustainability of conversions to natural gas. Finally, they may be concerned about O&M profile changes from their Electric business repositioning, and the lasting effects and costs of Merrimack Valley gas line explosions
NiSource is an energy holding company. Through its subsidiaries, the company is a natural gas distribution company. The company's reportable segments are: Gas Distribution Operations and Electric Operations. For its gas distribution operations, through its wholly-owned subsidiary, NiSource Gas Distribution Group, Inc., the company owns distribution subsidiaries that provide natural gas to residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland and Massachusetts. Through its electric operations, the company generates, transmits and distributes electricity through its subsidiary, Northern Indiana Public Service Company LLC, and engages in wholesale and transmission transactions.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.