Q: I’m trying to figure out what’s going on with PIF. As a utility, I understand that higher rates have likely hurt the stock to some extent, but it’s approaching COVID lows. My understanding is that its dividend is only 33% of 2023 cash flow, so no worries there. Yes, its biggest asset is in Nicaragua, but that has not changed (it’s actually less exposed to jurisdictional risk risk as it builds out projects in other jurisdictions). Is there something I am missing?
5i Research Answer:
It is not always easy to explain a stock's weakness without specifally referencing earnings, executive departures or other fundamentals. Sometimes stocks just drift. Here are some reasons: a) Its small size b) Some operational issues highlighted recently in Seeking Alpha c) a miss in estimated power production last quarter (though still up 11%) d) lower earnings last quarter. e) missing 2 of the past 7 quarters f) Lowered forecasts (by National Bank). g) simple negative momentum: selling begets more selling.