Andreas Halvorsen (Trades, Portfolio) increased his stake in Dynegy Inc. (DYN, Financial) by 1,563% on May 3. The guru purchased 5,959,436 shares for $16.6 per share.
Dynegy is an electric utility company based in Houston. It owns and operates a number of power stations in the U.S. across eight states – California, Connecticut, Illinois, Ohio, Massachusetts, Maine, New York and Pennsylvania. The company was founded in 1984 as Natural Gas Clearinghouse. It was originally an energy brokerage, buying and selling natural gas supplies. It changed its name to NGC Corporation in 1995 after entering the electrical power generation business.
Dynegy has a market cap of $2.3 billion, a P/E ratio of 16.15, an enterprise value of $9.3 billion and a P/B ratio of 0.93.
Dynegy is also traded in Germany.
Dynegy attempted to purchase Enron in 2001 before it was public knowledge that Enron was a scandalous energy firm that stole billions of dollars from its employees and shareholders. Dynegy nearly went bankrupt in 2002, and several executives within the company were eventually convicted of financial fraud and mismanagement.
Dynegy exited the energy trading business in 2002 and the natural gas supply business in 2005 to focus its efforts on electrical generation. The company has one major subsidiary, Dynegy Holdings. It also has three operating subsidiaries: GasCo, CoalCo and the "stub group" (for other miscellaneous business enterprises).
Halvorsen may have to decided to increase his stake in Dynegy for the following reasons:
- The company has had strong revenue growth over the previous 10 years (24.30%).
- The company has had enormous EBITDA growth (353.80%) over the previous 12 months.
- The company book value has increased by 19.10% over the previous decade.
- The company has a high Piotroski F-Score according to GuruFocus.
- The company is established with 830,000 residential customers and 23,000 commercial, industrial and municipal customers.
Below is a Peter Lynch Chart for Dynegy.
Halvorsen is a Norwegian hedge fund executive and entrepreneur. He is a former “Tiger Cub,” a protege of Julian Robertson (Trades, Portfolio). After gaining valuable experience working for Robertson, Halvorsen decided to launch his own hedge fund, Viking Global Investors, in 1999. The fund owns 66 stocks with a value of $22.715 million .
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