CNP

CenterPoint Energy ($CNP) Director Bets $100K on Company Emerging from Hurricane Crisis, Reverses Insider Trading Pattern

05/13/2025 20:10

CenterPoint Energy ($CNP) director Laurie Fitch has recently purchased company shares worth approximately $100,000 over two days. According to SEC Form 4 filings on May 9 and 12, Fitch acquired 1,900 shares at an average price of $37.58 on May 9, followed by an additional 800 shares at $36.73 on May 12. This total purchase of 2,700 shares marks a notable shift in the insider trading pattern observed in recent months. CenterPoint Energy, headquartered in Houston, Texas, is one of America's largest utility companies, providing electricity and natural gas services to approximately 2.8 million customers across several states including Texas, Indiana, Louisiana, and Minnesota. With a market capitalization of about $23.67 billion, this large-cap utility focuses primarily on electric transmission and distribution and natural gas distribution. Prior to this insider purchase, there was a different pattern of transactions. On February 24, SVP Kristie Colvin sold 16,536 shares (worth approximately $563,754), and on March 3, Director Ted Pound divested 6,103 shares (about $210,554). The stock was trading around $34 at that time, subsequently rising above $38 before recently settling back to around $36. This shift in insider trading patterns takes on greater significance when considering the company's recent history. CenterPoint Energy faced a major crisis following Hurricane Beryl in July 2024, which caused widespread power outages across Texas affecting approximately 2.7 million customers. The delayed restoration efforts drew sharp criticism from the Texas governor, triggered investigations, and resulted in class-action lawsuits exceeding $100 million. The stock plummeted from around $30 in early July to $25 by early August. The company has initiated significant changes in response to this crisis. Earlier this year, it announced plans to strengthen infrastructure against hurricanes, and in February 2025, increased its capital expenditure plan through 2030 by $1 billion to $48.5 billion. Additionally, in early April, CenterPoint completed the sale of its Louisiana and Mississippi natural gas distribution businesses, focusing on its core operations. In its recently announced Q1 2025 results, CenterPoint reported revenue of $2.92 billion, an 11.5% increase year-over-year, though adjusted earnings per share slightly decreased to $0.53 from $0.55 in the same period last year. Specifically, the electric transmission and distribution segment saw a 1.6% revenue increase to $1.07 billion, while the natural gas distribution segment grew 18% to $1.85 billion. Wall Street analysts maintain a generally neutral stance on CenterPoint Energy. Current analyst ratings include 7 'buy', 11 'hold', and 1 'sell' recommendations, with a median 12-month price target of $37, slightly above the current trading price. Investment banks have recently expressed positive views on the utility sector. Scotiabank upgraded CenterPoint Energy in December, while both Guggenheim and Barclays offered optimistic outlooks for utilities in 2025. Barclays particularly noted continued growth expectations driven by increased data center demand. The current U.S. economic environment features uncertainty stemming from high inflation, interest rate concerns, and the impact of President Trump's tariff policies. In this context, utility companies like CenterPoint Energy are attracting attention as defensive investments due to their relatively stable cash flows and dividends. Fitch's recent purchases can be interpreted as a signal of insider confidence in the company's long-term value. Notably, her decision to buy shares after a roughly 7% decline from recent highs suggests she may view the current price level as attractive. From a technical perspective, CenterPoint's stock has shown a strong upward trend over the past five months before experiencing a slight correction in early May. Currently trading above its 50-day moving average (approximately $35), the stock maintains its medium-term upward trajectory. Potential catalysts that investors should monitor include Federal Reserve interest rate decisions, power grid stability ahead of summer heat in Texas, and developments in U.S.-China trade relations. Additionally, the company's early April proposal to reduce monthly bills by up to $2 by 2027 could positively impact customer satisfaction and regulatory environment.

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