Siemens Energy: Seems Prudent To Start Taking Some Gains

MassifCapital
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(10min)

Summary

  • Siemens Energy has surged 431% from last year's lows, but the stock price now aligns with our valuation, prompting a reassessment.
  • ENR faces challenges in closing the valuation gap with GE Vernova due to differences in revenue mix, cash generation, and market sentiment.
  • ENR's Wind Turbine and Gas Turbine segments show limited potential for significant service revenue growth, making a valuation bump unlikely.
  • European policy changes could boost ENR's grid business, but it's prudent to take gains now to avoid potential downside risks.

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The following segment was excerpted from this fund letter.


Siemens Energy ('ENR', SMEGF) has had a great run from last year's lows. The stock bottomed out on 10/26/2023 at €6.87 and is now trading at €36.48, a

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Massif Capital is a value-oriented investment partnership focused on global opportunities in energy, basic materials and industrials. We invest principally in businesses with long lived assets that generate predictable cash flows that require not only capital allocation acumen from management but a keen focus on operational excellence. Our investment practice is primarily concerned with the nature of risk and value as it relates to protecting, enhancing and deploying the irreplaceable capital of our investors into a concentrated portfolio of economically productive assets.

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