Spotlight Weekly – NextEra Energy

Our NextEra Energy (NYSE: NEE) position illustrates this market

This giant power generator is a blue chip utility. It owns Florida Power & Light, the largest electric utility by volume. It serves over 12 million customers in Florida.

This chart does not reflect the success of the company.

NextEra is one of the top 20 companies for innovation, according to Fortune. They invested over $50 billion in U.S. infrastructure through 2022. And they returned 945% to their shareholders over the last 15 years.

And it is top ranked electric and gas utility industry on Fortune’s 2023 list of the “World’s Most Admired Companies”.

Financially, it’s also done well. It grew revenues by 23% in 2022. It increased operating earnings by 24% and net income by 16% in that same period. 

In an ideal world, the company’s share price would reflect its financial performance. But right now, the share price tracks macro-economic news. Its shares track the movements of the S&P 500 almost exactly over the past year.

That’s what happens when the macro news is so big that it overshadows the company’s performance. The news cycle was dominated by inflation worries, interest rates, and banking fears. As those fears recede, the market should calm down. And when that happens, company fundamentals will become important again.

We just have to be patient and success will come our way.

Sincerely,
Matt B.