Hawaiian Electric Industries Inc (HE, Financial), a prominent player in the regulated utilities sector, has recently seen a significant uptick in its stock performance. Over the past week, the company's stock price has surged by 14.94%, and over the last three months, it has gained an impressive 21.81%. Currently, the market capitalization stands at $1.39 billion with a stock price of $12.56. Despite these gains, the GF Value, which is a measure of the stock's intrinsic value, is set at $39.36, suggesting a possible value trap and advising investors to think twice before investing.
Overview of Hawaiian Electric Industries
Hawaiian Electric Industries serves as the parent company for three Hawaii-based regulated utilities and operates Hawaii's American Savings Bank. These utilities collectively provide electricity across five major islands—Oahu, Hawaii, Maui, Molokai, and Lanai—highlighting its critical role in the region's infrastructure. The company's strategic position within the essential services sector underscores its importance in Hawaii's economy.
Assessing Profitability
Despite its significant role, Hawaiian Electric Industries faces challenges in profitability. The company's Operating Margin is currently at -40.38%, which is better than only 3.07% of 521 companies in the same industry. Its Return on Equity (ROE) and Return on Assets (ROA) stand at -56.30% and -6.85% respectively, positioning it better than just a small fraction of its peers. However, it has maintained profitability over the past 10 years, a feat better than 99.81% of 517 companies, reflecting its ability to sustain operations amidst challenges. The Profitability Rank is currently 6/10.
Growth Metrics
The Growth Rank for Hawaiian Electric Industries is 5/10. The company has demonstrated a 3-Year Revenue Growth Rate per Share of 12.40%, outperforming 64.14% of 502 companies in the industry. However, its future revenue growth rate over the next 3 to 5 years is estimated at a modest 1.39%, which is better than 12.57% of 175 companies. This indicates potential challenges in sustaining higher growth rates moving forward.
Notable Shareholders
Among the notable investors in Hawaiian Electric Industries are Paul Tudor Jones (Trades, Portfolio), holding 177,125 shares, Joel Greenblatt (Trades, Portfolio) with 142,906 shares, and Caxton Associates (Trades, Portfolio) with 137,798 shares. These holdings reflect a confidence in the company's long-term value despite current profitability and growth challenges.
Comparative Industry Analysis
When compared to its competitors, Hawaiian Electric Industries stands out in terms of market capitalization. Oklo Inc (OKLO, Financial) has a market cap of $707.549 million, Genie Energy Ltd (GNE, Financial) at $452.341 million, and Summer Energy Holdings Inc (SUME, Financial) at $16.455 million. This comparison underscores Hawaiian Electric's significant scale and operational scope within the regulated utilities sector.
Conclusion
In conclusion, Hawaiian Electric Industries Inc has demonstrated a robust stock performance in recent months, attributed to its essential role in Hawaii's utility sector and sustained operational profitability. However, the company's current valuation as indicated by the GF Value suggests caution. Investors should consider both the growth potential and the risks associated with the current valuation before making investment decisions. Comparatively, Hawaiian Electric maintains a strong market position, which could be pivotal as it navigates through the challenges and opportunities ahead.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
