UNPRF - Uniper: Why I'm At A Continued 'HOLD' For This Company

2024-02-14 08:56:48 ET

Summary

• Uniper, a European utility company, has shown strong financial performance with positive earnings and net income in its latest results.
• The company has successfully avoided drawdown on its credit facilities and has commissioned a new gas-fired power plant, indicating its stability and future growth potential.
• Uniper is undergoing a transformation towards green energy production, making it an attractive long-term investment opportunity.

Dear readers/followers,

I have not made any sort of secret about the fact that I'm very negative about the Uniper (UNPRF) deal that Fortum decided to execute a few years back. The divestment, following a purchase using Fortum's massive cash pile at the time, was a major strategic failure in the entire utility sector in Europe. Fortum used to be one of my largest utility stakes - today it's minimal. This move by the company was easily one of the most frustrating experiences in my career as an investor - not because of a loss, but because of the lower appeal of Fortum, which was once as solid a utility as you could hope for.

In my last article which you can find here , I considered Uniper to be a doubtful investment and gave it a "HOLD". The visibility for the company going forward, while the assets were attractive, was something to be dubious about. I don't doubt that the assets have great value, especially in this environment, where the cracks in the renewable foundation that Europe has been speeding towards have become clearer than ever before....

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