|Bid||7.20 x 900|
|Ask||0.00 x 900|
|Day's Range||6.54 - 7.46|
|52 Week Range||5.07 - 49.42|
|Beta (3Y Monthly)||-0.02|
|PE Ratio (TTM)||27.49|
|Earnings Date||Feb 7, 2019 - Feb 11, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||22.21|
, the California utility, to enter bankruptcy to manage its $30bn wildfire liabilities has sent shockwaves through the US energy industry, raising concerns about the outlook for investment in renewable power in the state and beyond. Credit ratings for several businesses that supply power to PG&E were cut sharply last week, potentially raising the cost of capital for the industry and creating additional difficulties for California’s plan to source 100 per cent of its electricity from low-carbon technologies by 2045. Projects that supply PG&E with electricity under long-term contracts at prices that are well above today’s rates face the threat that in bankruptcy the company will reject those contracts, or insist on renegotiating them at lower levels, hurting the projects’ cash flows and their ability to service their debts.
Benzinga has featured looks at many investor favorite stocks over the past week. Bullish calls included a top automaker and a leading airline. Bearish calls included a troubled utility and a video game ...
PG&E Corp.’s bankruptcy could mark a business milestone: the first major corporate casualty of climate change. California’s largest utility was overwhelmed by rapid climatic changes as a prolonged drought dried out much of the state and decimated forests, dramatically increasing the risk of fire. On Monday, PG&E said it planned to file for Chapter 11 protection by month’s end, citing an estimated $30 billion in liabilities and 750 lawsuits from wildfires potentially caused by its power lines.
Banks are facing liabilities as buyers of last resort for more than $760 million of bonds the utility issued through California. Now the U.S. government has become entangled in PG&E’s financial crisis -- brought on by deadly wildfires that tore through California in 2017 and 2018, saddling the company with an estimated $30 billion in liabilities.
Shares of PG&E Corp. (NYSE: PCG), the embattled California utility, have shed a stunning 70 percent of their value this year as the company is considering bankruptcy amid facing $30 billion in liabilities from the 2017 and 2018 California wildfires. A corporate credit rating that was once BBB- is now C, the really speculative end of the highly speculative junk bond ratings spectrum. While PG&E bonds meet the definition of fallen angels, corporate bonds born with investment-grade ratings that are later downgrade to junk status, investors shouldn't expect to see the utility's debt appearing in the VanEck Vectors Fallen Angel High Yield Bond ETF (NYSE: ANGL) in the near-term.
PG&E Stock Is Up 10% Today! What’s Behind the Surge?One more chance to exit? PG&E Corporation (PCG) stock has risen more than 10% today. It soared from close to ~$5.0 to more than $8.0 in the last three trading sessions. This same week, the
Sears Holding Corp. creditors are balking at the retailer’s proposed sale to Edward Lampert, accusing the hedge-fund manager of stripping the chain of its best assets before dumping it into bankruptcy ...
New York’s Consolidated Edison Inc., which owns renewable energy projects that sell power to the California utility, was downgraded Friday by Bank of America Merrill Lynch analyst Julien Dumoulin-Smith, saying there’s a “good likelihood” PG&E will reject the contracts. ConEd acquired solar, storage and wind assets in December through a $1.6 billion deal with Sempra Energy. Dumoulin-Smith cut his ConEd rating to neutral, from buy, and reduced his price target to $80 per share from $83.
The announcement that California utility company PG&E Corporation (NYSE: PCG ) is preparing for bankruptcy sent shares of the battered stock tumbling more than 62 percent this week. However, one Wall Street ...
This time, California’s finances are buttressed by a surging economy and record reserves, while officials have shown little interest in bailing out the beleaguered utility, which said Monday it faces $30 billion in liabilities from deadly wildfires. Then, California’s credit rating took a hit and it was forced to sell what was then a record amount of bonds to keep the lights on. "I don’t anticipate the state at this point making any sort of a financial commitment," said Paul Mansour, head of municipal research at Conning.
Do publicly traded utilities exist solely to maximize shareholder value, or do they have a broader set of social responsibilities?
The September 2015 fire in the Sierra Nevada foothills did modest damage compared with Northern California blazes in PG&E’s service area in 2017 and 2018 that, taken together, killed more than 100 people, razed tens of thousands of homes and burned hundreds of thousands of acres. Financial uncertainty over as much as $30 billion in liabilities from the 2017 and 2018 wildfires has created a state of “limbo” in which PG&E can’t commit to previously reached settlements, said Kristen Bird, a lawyer for the company. PG&E is in “a mode of trying to conserve resources,” Bird told Superior Court Judge Allen Sumner.
BlueMountain Capital Management LLC, a hedge fund with a significant stake in PG&E Corp., has challenged the utility’s board over a plan to resort to bankruptcy to tackle wildfire damages that PG&E estimates could run as high as $30 billion. The California utility announced Monday it would file for bankruptcy, jolting BlueMountain and other investors that bought up the stock in 2018 before the state’s deadly Camp Fire, which killed 86 people. The announcement slammed the already depressed price of PG&E’s shares and bonds.
If U.S. District Judge William Alsup is correct that sparks from uncovered lines running through rural areas with dense vegetation pose “an extreme danger of igniting a wildfire,” that could spell more trouble for the embattled company as prosecutors scrutinize whether it broke the law through reckless operation of the electric grid. “Whether that becomes a grounds for criminal prosecution, that’s a very good question,” said Mike Danko, a lawyer representing thousands of victims of the 2017 and 2018 fires who are suing the utility. PG&E said in December -- a month after the deadliest and most destructive fire in California history destroyed the town of Paradise -- that it plans to install insulated power lines across 7,000 miles of highest-fire risk areas over the next 10 years, among other safety upgrades.
The credit ratings agency, however, said the state's wildfires and the inverse condemnation rule will remain a long-term risk for the publicly-owned utilities. Inverse condemnation is an old California rule that exposes the state's utilities to liabilities from wildfires regardless of their negligence, as long as their equipment is involved. Earlier in the day, shareholder BlueMountain Capital Management LLC said the U.S. power company's decision to file for bankruptcy was unnecessary.
fell 9.5% to $6.36 a share at the close of trading on Thursday after shareholder BlueMountain Capital Management LLC on Thursday challenged the power company's decision to declare bankruptcy in response to the deadly California wildfires. "The evidence for PG&E's solvency is overwhelming," the letter said. "As of December 31, 2018 - nearly two months after the Camp Fire - 18 separate Wall Street analysts found PG&E solvent, with a consensus equity valuation of $20 billion.
Moody's Investors Service (Moody's) has downgraded to Aa3 from Aa1 the long-term joint support letter of credit-backed ratings of California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Pacific Gas and Electric Company(the Obligor)) Series 2009A and 2009B (the Bonds). The short-term VMIG 1 rating assigned to such Bonds remains unchanged.
Moody's Investors Service, (Moody's) downgraded the ratings of Pacific Gas & Electric Company (PG&E or utility) and its holding company, PG&E Corporation (PCG or parent), including the Corporate Family Rating (CFR) to Caa3 from Ba3 and Probability of Default Rating to Ca-PD from B1-PD. Moody's also downgraded PG&E's senior unsecured rating to Caa3 from Ba3, PCG's senior unsecured rating to C from B2 and the Speculative Grade Liquidity Rating to SGL-4 from SGL-3.
The liability related to its share of responsibility for the California wildfires has the electric utility in high-risk limbo.
BlueMountain Challenges PG&E’s Bankruptcy Plans—PG&E Rises 10%PCG recovers PG&E Corporation (PCG) stock surged more than 10% today after its shareholder BlueMountain Capital challenged its bankruptcy plans. New York–based asset
Editor's Note: The original version of this article misstated the debt of Blue Apron (NYSE:APRN) and was corrected on Jan. 18, 2019. It doesn't matter if times are tough or if they're great, there are still going to be companies that go belly up. A perfect example? Look at 2008 vs. 2018. Just 10 years apart and look at how much has changed. Yet bankruptcy stocks are still popping up all over the map, and there's not much investors can do about it: bankruptcy happens. But that doesn't mean those investors have to get caught up in the beatings. Conversely, it also doesn't mean they need to short these stocks. InvestorPlace - Stock Market News, Stock Advice & Trading Tips In fact, when it comes to bankruptcy stocks, my main instinct is to avoid them at all costs. That's because even though the long-term story is eroding and the vultures are circling, we routinely see these names pop 20%, 30%, 40% and sometimes even more over a few-day stretch. * 7 Stocks to Buy as the Dollar Weakens While not shorting companies that are circling the drain goes against common sense to some extent, I just don't care for the added volatility and elevated risk profiles that these names come with. That said, here are some bankruptcy stocks to keep an eye on. ### Bankruptcy Stocks to Watch: Sears (SHLDQ) Source: Shutterstock Sears Holdings (OTCMKTS:SHLDQ) is the obvious bankruptcy stock for 2019, and it's fitting that this retailer is starting off the list. After years of profit declines, cash flow bleeding and declining sales, Sears is finally going through the bankruptcy process. CEO Eddie Lampert's hedge fund is working toward a deal with Sears to buy up the company in bankruptcy court. The pending deal, which was recently bumped up from $4.4 billion to $5 billion, would be ironic, given that Lampert was the one at the helm when Sears went under in the first place. Perhaps if Lampert hadn't pared off the company's best brands and sold off its best real estate, the retailer would have been on better footing. The errors were obvious when they were occurring, not just in hindsight, but it's unclear whether that would have saved the company or not. So which retailers benefit from a Sears bankruptcy? While in the short-term the retailer's bankruptcy may hurt these companies due to liquidation sales, companies like Home Depot (NYSE:HD), Lowe's (NYSE:LOW), Best Buy (NYSE:BBY) and Monro (NASDAQ:MNRO) should all benefit, among others. ### J.C. Penney (JCP) Source: Shutterstock J.C. Penney (NYSE:JCP) reminds me a lot of Sears, with just a little bit more runway left. Its precarious situation looks more like a "when" not "if" scenario when it comes to the dreaded B-word. Shares are up big over the last week, climbing almost 30% since last Thursday. But don't get too excited. This name has gone from $1.13 per share to just over $1.30. That's not doing much to inspire confidence. With a 52-week low of 92 cents to and a high of $4.75, JCP stock is closer to the wrong side of that one-year range. The company's recent update on its holiday sales and reaffirmation of some of its guidance is uplifting news. But let's be real. Sales have been in decline for three straight years as its footprint is shrinking and over the past five years, JCP has had one year with positive net income. That came in 2017 and JCP turned in just $1 million in profit. JCP isn't completely circling the drain, but with over $4 billion in long-term debt and less than $200 million in the bank, I'm not super optimistic on its future. ### PG&E (PCG) Source: Riccardo Annandale Via Unsplash A lot of people want to see PG&E (NYSE:PCG) go under. Multiple wildfires in Northern California has not only created plenty of negative press for PG&E, but also a lot of liabilities. The share price had gone from $70 in November 2017 to about $17.50 fecently, a 75% haircut -- and that's before news of its pending bankruptcy filing dropped shares further, to around $7. But more alarming has been the performance of its bonds. S&P cut the company's bonds to BBB-, the lowest investment grade rating available. Moody's went a step further, slashing the company's bonds down junk status. The move will force PG&E to post cash collateral and will make borrowing more expensive. While PG&E does have cash coming in, it's got just $430 million in the bank. It's got over $18 billion in long-term debt -- and even worse for investors, this utility doesn't even have a dividend. There are much better choices on the table for investors. ### Blue Apron (APRN) Source: Shutterstock Blue Apron (NYSE:APRN) isn't a name that comes up much when it comes to bankruptcy situations. That's likely because it's a relatively new player in the stock market and its debt situation isn't that bad. But when a stock goes public at $10 and it's under $1 less than 18 months later, there's clearly an issue. While WeightWatchers (NYSE:WTW) threw the company a bone, it's clear that Blue Apron's business model was not a good one. It cost too much to attract new customers and the cash flow bleed was lethal. Lately though, cash flows are trending higher and APRN might be able to avoid a stock-exchange delisting. But a pennies-on-the-dollar acquisition seems more likely to be on the horizon. There's too much competition and too low of margins to imagine APRN surviving on its own over the long term. ### GameStop (GME) Source: Shutterstock Without some change to Apron's business and/or stock price, some type of action seems imminent in 2019. For GameStop (NYSE:GME), that may not be the same case -- at least this year. At the very least though, its dividend could be on the block. The stock currently yields over 9.7%, while free cash flow and operating cash flow continue to dwindle. However, GME's cash flow is not negative, like its net income is. Over the last three years, GME's best year came in fiscal 2016 when it earned $28 million. This year? It lost almost half a billion dollars. To say the situation is worsening is an understatement, as gamers continue to turn to digital downloads and online sales. GME needs to make a move -- reducing its footprint, bringing an entertainment component to its business and only maintaining its profitable locations. Or consider a buyout. Without one, its business is in trouble. ### Barnes & Noble (BKS) Source: Mike Kalasnik via Flickr (modified) It's too bad to see Barnes & Noble (NYSE:BKS) on the decline, because I loved these stores when I was younger. While bookstores could somehow stay around, the e-book/Kindle revolution really ruined business for these guys. And let's be honest, Amazon (NASDAQ:AMZN) also didn't do any favors for retail, in particular BKS. As of the most recent quarter, the company has $11.2 million in cash and $63.7 million in accounts receivable. While it doesn't have any short-term debt, it does have over $621 million in accounts payable. Further, long-term debt sits at $278 million. Despite this seemingly lopsided situation, the company still pays out a dividend. Its yield is near 9.9%, a red flag to be sure. And even though the company turned in one of its best holiday comps in recent memory, management warned on profit, saying it may fall up to 10% year-over-year. It's been years since since BKS turned in an annual income statement without red ink on its net income line. This one's bankruptcy seems inevitable at some point down the road. ### The Container Store (TCS) Source: Shutterstock I'm not trying to pick on retail intentionally, but just too many of these companies are hanging by a thread and need too many things to work out perfectly for them to stick around. The Container Store (NYSE:TCS) is one of them. Obviously after the holiday quarter, TCS will come into some cash as it geared up for the holidays like everyone else. But as of the last quarter, TCS had just $7.2 million in cash with more than $7 million in short-term debt. Worse, it has more than $282 million in long-term debt. That said, the company is on the right side of profitability and actually has positive free cash flow. I just do not like its levered balance sheet, something management needs to correct in 2019. Otherwise, it will need to make some less-than-appealing moves and that may weigh on its stock price even more. The stock is down more than 40% in the last three months to less than than $6 a share. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Growth Stocks With the Future Written All Over Them * 7 Reasons Why Buffett's Bet on Apple Stock Is a Good One * 10 Companies That Could Post Decelerating Profits Compare Brokers The post 7 Bankruptcy Stocks to Watch in 2019 appeared first on InvestorPlace.
The company’s announcement Monday that it plans to seek protection from creditors triggered an surge of selling by owners of the floating-rate securities, causing dealers to push up the yields to draw buyers. Sumitomo Mitsui Banking Corp., Mizuho Bank Ltd., Mitsubishi UFJ Financial Group Inc.’s Union Bank, the Toronto-Dominion Bank and the Canadian Imperial Bank of Commerce have provided such letters-of-credit for about $762 million of the $920 million of municipal debt issued on behalf of PG&E, according securities filings.