Stock of the Day

March 16, 2020

FirstEnergy (FE)

$40.67
-$0.20 (-0.5%)
Market Cap: $23.59B

About FirstEnergy

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities. It operates 24,080 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 274,518 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.

FirstEnergy Bull Case

Here are some ways that investors could benefit from investing in FirstEnergy Corp.:

  • The current stock price is around $42.11, which reflects a stable performance in the utilities sector.
  • FirstEnergy Corp. has seen significant institutional investment, with hedge funds and institutional investors owning over 89% of the company's stock, indicating strong confidence in its future.
  • The company has demonstrated growth in holdings, with firms like Voloridge Investment Management increasing their stake by over 44% recently, suggesting positive market sentiment.
  • FirstEnergy Corp. has a solid market capitalization of approximately $24.30 billion, which positions it well within the utilities industry for potential growth and stability.
  • The stock has a relatively low beta of 0.42, indicating that it is less volatile compared to the overall market, which can be appealing for risk-averse investors.

FirstEnergy Bear Case

Investors should be bearish about investing in FirstEnergy Corp. for these reasons:

  • The company has a debt-to-equity ratio of 1.58, which suggests that it relies significantly on debt financing, potentially increasing financial risk.
  • FirstEnergy Corp. has a quick ratio of 0.46, indicating that it may struggle to meet short-term liabilities without selling inventory, which could be a concern for liquidity.
  • Despite recent growth, the price-to-earnings ratio of 27.17 may suggest that the stock is overvalued compared to its earnings, which could deter value-focused investors.
  • The stock has fluctuated between a 1-year low of $37.58 and a high of $44.97, indicating some volatility that may concern conservative investors.
  • Insider ownership is relatively low at 0.17%, which may suggest a lack of confidence from company executives in the stock's future performance.
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