Updates on New Positions Traded by Ray Dalio's Bridgewater Associates in 4Q14 (Part 5 of 6)
(Continued from Part 4)
Bridgewater Associates’ new stake in CNP
Bridgewater Associates started a position in CenterPoint Energy (CNP) during the fourth quarter of 2014. The fund bought 453,278 CNP shares worth $10 million. The position accounted for 0.08% of Bridgewater’s total 4Q14 portfolio, according to the fund’s latest 13F filings.
Overview of CNP
Founded in 1882, CNP is an electric and natural gas utility company. The Texas-based firm operates in the following segments:
- Electric Transmission & Distribution
- Natural Gas Distribution (or NGD)
- Energy Services
- Midstream Investments
- Other Operations
CenterPoint Energy Houston Electric, LLC, is involved in the Electric Transmission & Distribution business in a 5,000-square-mile area along the Texas Gulf Coast.
CenterPoint Energy Resources Corporation (or CERC) owns and operates the NGD segment. CERC offers variable- and fixed-priced physical natural gas supplies to commercial entities, industrial customers, and electric and gas utilities through CenterPoint Energy Services and its subsidiary CenterPoint Energy Intrastate Pipelines.
The Midstream Investments segment includes CNP’s interests in Enable Midstream Partners (ENBL), a publicly traded master limited partnership that CNP jointly controls with OGE Energy Corporation (OGE). CNP owns a 55.4% limited partner interest in ENBL, which owns, operates, and develops natural gas and crude oil infrastructure assets.
4Q14 results
In February 2015, CNP declared its 4Q14 and full year 2014 results, reporting net income of $176 million or $0.41 per diluted share compared to $113 million or $0.26 per diluted share for 4Q13. Operating income for the fourth quarter of 2014 was $221 million compared to $211 million in the prior year.
In the earnings release, company management noted that “Our Utility Operations delivered solid results, with a particularly strong financial performance from Gas Operations. Enable Midstream performed well in their first full year of operations, delivering financial results in line with our expectations.”
In January, the Market Realist article Wholesale electricity prices mirror natural gas prices noted that an unexpected heat wave during the month of October in Texas had led to a rise in wholesale power prices. American Electric Power Company (AEP) and CenterPoint Energy are the major power companies operating in Texas. Both AEP and CNP said they had benefited from the mostly colder than normal temperatures in 2014.
CNP and AEP have exposures of 1.62% 4.96%, respectively, in the Utilities Select Sector SPDR (XLU). XLU is a representative fund of the utilities sector. Sector peer Duke Energy (DUK) has the largest exposure in the fund at 9.10%.
Continue to Part 6
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