Edison International

We invested in Edison International (EIX) with the view that the legislature was likely to put in place funding support for the California Wildfire Fund and make further wildfire risk reform a priority. Since we invested, we’ve seen positive progress on each of these initiatives and believe that as tail risk recedes, EIX shares should close the discount to the nearly 18x average multiple for the sector.

We remain confident that California’s Wildfire Fund and protective legislation will be sufficient to mitigate long-term financial impacts on Edison International. Despite recent challenges due to wildfires causing billions in damages and concerns about future liabilities, we believe the company's valuation has been overly discounted for its defensive characteristics and high-single-digit earnings growth. The combination of rising electricity demand and highly stable cash flows makes the utilities sector, including Edison International, an attractive investment in the current market environment.

We remain confident that California’s Wildfire Fund and protective legislation will be sufficient to mitigate long-term financial impacts on Edison International. Despite recent challenges due to wildfires causing billions in damages and concerns about future liabilities, we believe Edison’s valuation has been overly discounted for a business with defensive characteristics and high-single-digit earnings growth. The combination of rising electricity demand and highly stable cash flows makes the utilities sector, including Edison International, an attractive investment opportunity.

We remain confident that California’s Wildfire Fund and protective legislation will be sufficient to mitigate long-term financial impacts on Edison International. Despite recent challenges due to wildfires causing billions in damages and concerns about future liabilities, we believe Edison’s valuation has been overly discounted for a business with defensive characteristics and high-single-digit earnings growth. The combination of rising electricity demand and highly stable cash flows makes the utilities sector, including Edison International, an attractive area for investment.

Edison International is an electric utility that generates a substantial portion of its power via renewable sources and has a strong systematic ESG risk profile. The stock has struggled in the aftermath of the California wildfires, as one of the powerlines tied to the Eaton fire comes under Edison’s jurisdiction. While liabilities are capped and the long-term story is intact, volatility is likely to continue.

Edison International is an electric utility that generates a substantial portion of its power via renewable sources and has a strong systematic ESG risk profile. The stock has struggled in the aftermath of the California wildfires, as one of the powerlines tied to the Eaton fire comes under Edison’s jurisdiction. While liabilities are capped and the long-term story is intact, volatility is likely to continue.

Edison International is an electric utility that generates a substantial portion of its power via renewable sources and has a strong systematic ESG risk profile. The stock has struggled in the aftermath of the California wildfires, as one of the powerlines tied to the Eaton fire comes under Edison’s jurisdiction. While liabilities are capped and the long-term story is intact, volatility is likely to continue.

We were also hurt by a position in the electric utility Edison International. The stock fell on concerns about the company’s potential exposure to litigation involving the January California wildfires, and we sold the stock from the portfolio due to the uncertain outcome.