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Ameren (AEE) Is Expected to Grow Profits and Dividends at a Stellar Rate

Artisan Mid Cap Fund recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -11.55% for the quarter (investor class), outperforming their benchmark, the Russell Midcap Index which returned -27.07% in the same quarter. You should check out Artisan Mid Cap Fund’s top 5 stock picks which helped them beat the market by nearly 16 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, Artisan Mid Cap Fund highlighted a few stocks and Ameren Corp (NYSE:AEE) is one of them. Ameren is a power company. Year-to-date, AEE stock lost 8.9% and on May 8th it had a closing price of $70.86. Its market cap is of $17.3 billion. Here is what Artisan Mid Cap Fund said:

“Ameren is a public utility holding company which provides electric and natural gas services to customers in Missouri and Illinois. Like the other utility we recently added to our portfolio, CMS Energy, we believe Ameren will benefit from its transition away from coal and nuclear plants to a greener power-generation fleet—namely, wind and solar—over the coming decades. This transition will not only benefit the environment—35% and 80% reductions in CO2 emissions by 2030 and 2050—but will also enable the company to use the cost savings from lower fuel input costs and operating expenses to lower costs to customers, while investing in capital projects at attractive returns on investment. As a regulated utility, Ameren will be allowed to earn a reasonable return on these higher-capital investments, which should drive years of reliably rising profits and dividends.”

In Q4 2019, the number of bullish hedge fund positions on AEE stock decreased by about 3% from the previous quarter (see the chart here), so various other hedge fund managers don’t seem to agree with AEE’s growth potential.

Disclosure: None. This article is originally published at Insider Monkey.

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