Zacks Investment Research downgraded
Companhia Energetica de Minas Gerais
also known as CEMIG
to a Zacks Rank #5 (Strong Sell) on Oct 8, 2013.
Why the Downgrade?
BROOKFIELD INFR (BIP): Free Stock Analysis
CEMIG SA -ADR (CIG): Free Stock Analysis
CLECO CORP (CNL): Free Stock Analysis Report
ALLIANT ENGY CP (LNT): Free Stock Analysis
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CEMIG had compelling long-term growth prospects with the demand
for electricity increasing manifold in Brazil. However, the
concerns surrounding the stock have overshadowed the growth
aspects in the near term.
Though earnings results for second quarter 2013 increased on a
year-over-year basis, it lagged behind the Zacks Consensus
Estimate by 52.5%. Operating expenses have been rising for CEMIG
in the last few quarters. In the second quarter 2013, operational
costs and expenses soared 6% year over year. Moreover, long-term
debts stood at $2.3 billion.
The Zacks Consensus Estimate for CEMIG has fallen 6.2% to $1.36
per ADR for year 2013 in the last 60 days while the same is
pegged at $1.36 per ADR for year 2014. Estimate for 2013
represents a year-over-year growth of 44.4%.
CEMIG has an average negative earnings surprise of 27.9% for the
trailing four quarters. This along with negative revision in
earnings estimates raises concerns about the financial results in
the coming quarters. Also, we have an
of -12.5% for year 2013.
Other Stocks to Consider
CEMIG is one of the largest integrated electric utilities in
Brazil with approximately 97% of the company's installed
generation capacity being hydroelectric power. The stock
currently has a $8.6 billion market capitalization.
Other stocks to watch out for in the industry are
Alliant Energy Corporation
Brookfield Infrastructure Partners L.P.
), each holding a Zacks Rank #2 (Buy).