Curious about HE

[GhostofTomJoad]

There are different type of bankruptcies though. PGE “bankruptcy” consisted of all bonds and preferreds made entirely whole. While the equity just had severe dilution and was not wiped out. Typically bankruptcy frees companies of debt. PCG actually increased debt coming out of bankruptcy.

Well, that's nuts. At the very least, I hope their top brass got shown their walking papers. Disgraceful.

 

[DrRoy]

I swore I would never purchase single stocks.

Stick to that.

 

[Mulligan]

Well, that's nuts. At the very least, I hope their top brass got shown their walking papers. Disgraceful.

PCG does have new management, but there were so many fingers in the pot they tried to satisfy them…Pension system owners of stock, debt holders, victims needing to be compensated. So this was the solution. Issue more equity for victims fund, add on debt and increase rates to help make it work. The victims fund is mostly if not all liquidated (Im not sure) now so they were largely made whole and the past common stock holders were not wiped out. That being said the company is about twice as indebted as it was before the fire and exiting bankruptcy.

 

[twirler]

Stick to that.

Too late. I segregated a small portion of my portfolio swearing; if, I lose what's there, I won't ever try again.

 

[twirler]

I live in Hawaii and have watched Hawaiian Electric stock for years. I also have several family and friend connections to current and former employees. That's not to say I have any inside information. But on the islands, the coconut wireless is the best source of information so I'm not even sure what inside means here.

I'm not going to give stock advice on this but I will offer comments. First HEI is a monopoly and will remain so. They offer horrible customer service where I am but that hardly matters because there are few customers in my area.

Their focus seems to be on going completely renewable. Regardless of your politics, that makes sense in Hawaii since delivery of oil is incredibly expensive. But it also means they are facing huge capital costs in the coming years. Grid restoration costs can be huge and unpredictable as evidenced both with the Maui fires and the Puna eruption.

I think they will likely face bankrupcy because of the Maui Fires.

Not according to what I've been reading. First the power lines were shut down after the initial problem that was put out by the fire department. Second, the fire is an act of god, third, the forestry service ( which is the responsibility of the state) is responsible for the clearing of the brush which was overgrown, fourth they are laying blame on the fire department for not putting out the fire properly.

Lets talk about a few more reason. They have a monopoly 93% of the business is theirs. The federal government just gave them close to 100million to update their infrastructure. As it is a necessary service in order for people to live, can you explain to me how it could even be possible for them to become bankrupt? Feel free to private message me, because I'd love an insiders perspective. On the outside, if you have free money I can't see a reason not to pile into this strictly on a "too big to fail" sort of situation.

While a lot of people don't live there, military facilities public services and businesses specifically dealing in tourism will remain present. Also, rumor mill indicates a lot of a big money players are trying to take over the island as a sort of billionaire paradise. For all of this it only costs 12 a share right now... that's a steal. What's your thoughts on all this? I see a wait time of 1-3 years most likely 18 months for a huge turn around.

 

[twirler]

You really havent mentioned the potential $5-$6 billion liabilities that many are trying put a bullseye on HE…including the local govt. The fire devastation far outweighs the equity value of the hold co which is presently under $2B, and that doesn’t include any other current hold co and subsidiary debt. Probably no more than $1b in insurance liability. The likely successful outcome of the investment will be decided inside the courthouse and not their economic performance.

Did you watch the hearing for the CEO? Soft ball after softball.

Never mind the feds approved 100m for infrastructure costs. Also they make 200m a year. It depends on how badly they are found guilty you are correct. My presumption is it will be not at all for very slightly.

 

[Bigdawg]

For all of this it only costs 12 a share right now... that's a steal. What's your thoughts on all this? I see a wait time of 1-3 years most likely 18 months for a huge turn around.

I bought lots at 9,10,11,12 and 13. Overall cost basis is 12.60. I'll hold for a few years. Collecting the div and putting into my 5% CD.

 

[Mulligan]

I bought lots at 9,10,11,12 and 13. Overall cost basis is 12.60. I'll hold for a few years. Collecting the div and putting into my 5% CD.

The common stock dividend has been suspended indefinitely. I gambled on one of the preferreds. I captured the preferred dividend, but once I found out they only have a paltry $165 million in insurance liability, I bailed. If they of course are found innocent or a very reduced role in cause, yes the common should pop down the road.

 

[Mulligan]

Did you watch the hearing for the CEO? Soft ball after softball.



Never mind the feds approved 100m for infrastructure costs. Also they make 200m a year. It depends on how badly they are found guilty you are correct. My presumption is it will be not at all for very slightly.

If your presumption is correct then I think you will have a great investment. Keep in mind the way utilities operate. The annual profit does not mean $200 million dollars free cash, as many utilities are profitable all while running cash flow negative for many years running. Here is a good read on background info from Fitch’s credit downgrade that explains the assumptions (which are just that) and possible risks and its effects.

https://www.fitchratings.com/resear...xt=Fitch Ratings - New York - 21,B' from 'A-'.

 

[GhostofTomJoad]

Did you watch the hearing for the CEO? Soft ball after softball.

Never mind the feds approved 100m for infrastructure costs. Also they make 200m a year. It depends on how badly they are found guilty you are correct. My presumption is it will be not at all for very slightly.

There was one Congressman, at least, who repeated and repeated his question to the HE CEO about full disclosure with the public about results of the internal investigation. She dodged and meandered and hedged her bets and dissembled and equivocated and ignored.

I do hope a lot of other people saw that news clip. Disgraceful. I won't buy their stock because of that very thing, plus the attitude of: "It's totally not our fault." Accchh. Bushwah! Basically, they do not DESERVE my money. Ethics? Feces.

 

[twirler]

If your presumption is correct then I think you will have a great investment. Keep in mind the way utilities operate. The annual profit does not mean $200 million dollars free cash, as many utilities are profitable all while running cash flow negative for many years running. Here is a good read on background info from Fitch’s credit downgrade that explains the assumptions (which are just that) and possible risks and its effects.

https://www.fitchratings.com/resear...xt=Fitch Ratings - New York - 21,B' from 'A-'.

Thanks for this info. Also I agree with most of what you said. They may be found guilty of something small, but I don't think it will go anywhere as their number one customer is.... the department of defense

 

[twirler]

There was one Congressman, at least, who repeated and repeated his question to the HE CEO about full disclosure with the public about results of the internal investigation. She dodged and meandered and hedged her bets and dissembled and equivocated and ignored.

I do hope a lot of other people saw that news clip. Disgraceful. I won't buy their stock because of that very thing, plus the attitude of: "It's totally not our fault." Accchh. Bushwah! Basically, they do not DESERVE my money. Ethics? Feces.

Don't watch a "news clip" watch the whole interview. You are what media you consume and you are being sold an idea based on the opinions of that news channel, or in this case whatever drives views; which, sadly is rage/misery bait.

She said they would provide all critical information relevant. I watched the whole thing. If someone walked up and accused you have a crime with no information and demanded you defend yourself or you'd be found guilty you'd be apprehensive as well. It's innocent till proven guilty in this country not the other way around.

And, if you are investing based off ethics I really hope you don't own any large indexes. If you did you'd be on the hook for owning tobacco, alcohol, firearms, oil, etc which all do far more harm then this act of god which is being dumped on one company as though they can control the weather. How many tornados tear though places like Kansas every other year, and we watch power poles get ripped out of the ground, how come no one is filing suit against them? Its utter BS, and she has every right to not bend over backwards for some pandering political twit.

 

[Nords]

Not according to what I've been reading.
While a lot of people don't live there, military facilities public services and businesses specifically dealing in tourism will remain present. Also, rumor mill indicates a lot of a big money players are trying to take over the island as a sort of billionaire paradise. For all of this it only costs 12 a share right now... that's a steal. What's your thoughts on all this? I see a wait time of 1-3 years most likely 18 months for a huge turn around.

@Twirler, I’d encourage you to read sources like Civil Beat, a non-profit journalism project that files more FOIA requests than any other media company in the islands. If you haven’t already read HECO’s regulatory filings, those will become more detailed in the next few quarters.

This will be much more relevant as the various regulatory agencies (and the courts) sort out the chronology and the liabilities. Despite what you’re reading right now, nobody’s testified about their actions in depositions under oath— and there’s considerable confusion on that chronology among Maui’s first responders as well as the island’s government. People who were jumping into the harbor as their cars burned have reported many discrepancies with the official narratives to date.

HECO’s residential customer base has the nation’s highest per-capita use of photovoltaic and solar water heating. Military base housing complexes (particularly Schofield) are among the nation’s largest PV & solar water neighborhoods. All of the state’s airports generate the majority of their power from PV. HECO’s simultaneously losing revenue (due to their legacy net-metering contracts) while having to modernize the grid (legislation and initiatives) to accommodate large-scale photovoltaic projects and residential PV penetration. I’m pretty sure the PUC won’t approve rate hikes to pay lawyer bills.

As an example, my net-metering electric bill has risen from $16/month in 2005 to… $27/month in 2023. You’d want to compare my rising electric bills to HECO’s long-term revenue growth. It doesn’t matter what residential electric utility rates are when residents could get compensated for photovoltaic production at the retail rate. The legacy net-metering contracts were closed to new customers in 2015, but as PV (and battery) costs drop then residents can still slash their electric bills with the new net-metering contracts.

Another house on our street generates an annual average of 900 KWHr/month from their PV array and solar water heating, with summer months of over a MWHr/month. They have free air conditioning (let alone free electricity for the rest of their residence plus their electric vehicles) for as long as they keep the house.

HECO also has a billing system from the 1990s, still employs manual meter readers (despite powerline networking), and is still struggling to update meters meters for time-of-day rates. They’re currently waffling on a storage-battery initiative that would have facilitated some of their grid-modernization expenses. They’re right to waffle on it because it’s a bad deal for the residential homeowners, but HECO’s the corporation that spent all the time & effort (and operating revenue) to develop the program and market it.

I don’t know what you’d want to benchmark your investment against to decide whether you’re beating the market, but… good luck.