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By Abercrombie Industrials Public Company

14 Nov: Devina Rankin – CFO of Waste Management (WM) – The Stock Podcast, Ep.19

Devina Rankin is the CFO and SVP of Waste Management (WM), the largest waste services company in North America. In this episode of The Stock Podcast, Devina provides a brief history of the company and a great overview of the waste management business. Tune in if you’d like to learn about the waste management business, the recycling industry, and how landfills work.

I realize that Waste Management probably doesn’t need an introduction. Just about everyone out there has probably seen WM’s big green trucks driving around town. However, the waste management business is much more than just picking up trash. There’s a lot that goes on behind the scene that we don’t see. Running a waste management business is very complex, and that’s why it’s great to have Devina on the program to describe how they grew to become the leading waste services provider in North America.

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By Abercrombie Energy Teach-In Utilities

20 Oct: Ken Anderson – Texas Public Utility Commissioner – The Stock Podcast, Ep.18

Ken Anderson served as Commissioner with the Public Utility Commission of Texas (PUCT) from 2008-2017. Tune in to this episode of The Stock Podcast to hear Ken describes the success of Texas renewable energy, the history of ERCOT, and his views on an ERCOT capacity market. Ken also provides some of his perspectives on the current issues the PUCT will likely have to deal with down the road. In addition, Ken outlines some really interesting regulatory and market considerations regarding Sempra‘s acquisition of Oncor, as well as some of the benefits of limited federal oversight in building out CREZ and potential changes to the regulatory framework in Texas.

By means of background, Ken was a slightly controversial figure for utility investors. Ken’s opposition to an ERCOT capacity market was perplexing for many. However, Commissioner Anderson was unwavering when it came to his views on how deregulated power markets should operate. So far, he’s been spot on. ERCOT and Texas have some of the lowest power prices across the US. Part of this is attributable to strength in the Texas renewable energy industry. Sure, Texas is blessed with an extremely strong wind resource, but the free-market philosophy has helped to ensure growth in the industry, not to mention the construction of the CREZ line. It’s a fascinating success story for renewables.

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By Abercrombie Energy Infrastructure Public Company Renewables Utilities

09 Oct: Tom O’Flynn – CFO of AES Corporation (AES) – The Stock Podcast, Ep.17

Tom O’Flynn is the CFO of AES Corporation (AES). Tom provides a great overview of AES Corporation’s business model. He also discusses some really interesting catalysts for the company and highlights a compelling investment case for the shares of AES’ stock.

AES is a power company, but it’s different from regulated utilities, IPPs, and yieldcos, yet at the same time has similar characteristics. The asset portfolio includes traditional generation facilities, renewables, and a lot of the essential infrastructure required to produce and transmit electricity. Since the current management took the reins in 2011, they’ve pruned the portfolio, with more than $5B in asset sales over the past 7 years and exited 13 countries. During that time, management reduced parent level debt by $2B, cut costs by $300M, and they’ve returned almost $3B of cash to shareholders.

Part of the return to shareholders has been through dividends, and AES has also bought back about 16% of their stock since 2011. Another interesting fact is that the company has reduced coal generation capacity by about 20% over the past three years, and they’ve replaced a large portion of that capacity with renewable energy. De-risking the business has also been a key priority. Management has reduced AES’ FX exposure to around 15% from 40%.

Maybe one of the most interesting facts about AES Corp is that they are the largest owner of battery storage in the world, and the recently announced storage JV with Siemens called Fluence. The Fluence JV positions AES extremely well for the future. One of the reasons the battery JV is so interesting is because of the growth outlook. Generally speaking, growth investors aren’t interested in utilities. That’s because, double-digit earnings growth in utility-land is almost unheard of, at least not on multi-year outlook.

Another potentially big catalyst for AES Corp includes IMO 2020. This is a gross oversimplification, but IMO 2020 puts a cap on the amount of sulphur shipping vessels are allowed to use in fuel oil. This global regulation bodes well for global LNG demand. And with respect to debt, individual projects financed with non-recourse term debt, which means there is a natural deleveraging component to the business.

Something I like about this management team is that they’re focused on what they know, understand, and where they believe they have a competitive advantage. This perspective led to reducing the number of countries where they operate and becoming more acutely focused on developing and owning long-lived infrastructure assets.

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By Abercrombie Energy Public Company Renewables Utilities

01 Oct: Nathan Kroeker – CEO of Spark Energy (SPKE) – The Stock Podcast, Ep.16

Nathan Kroeker is the President and CEO of Spark Energy (SPKE). Tune in to hear Nathan describe Spark Energy’s business model and why he thinks SPKE stock is undervalued. Nathan also shares his thoughts on the outlook for the industry, and an explanation as to why the retail energy services business is misunderstood by the broader market. Most importantly, he outlines the most important aspects of the SPKE investment story and highlights the key elements of a really compelling investment idea.

Spark went public in 2014 and was largely considered a roll-up story. Retail electricity businesses were trading really low multiples. So, SPKE could use its public currency, which carried a higher multiple, to roll-up private retail business at lower multiples. Recently, however, Nathan Kroeker shifted the company’s priorities to organic growth, and to optimize the business. Management expects to achieve 20M in cost savings from some discrete integration initiatives, which is a big deal for a company that generates less than $100M in EBITDA. Cash flows could grow meaningfully next year for Spark, especially since earn-out payments from previous acquisitions will be completed by mid-2019.

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By Abercrombie Investor/Analyst Teach-In

23 Sep: Chris Whalen – Investor, Author, and Historian – The Stock Podcast, Ep.15

Chris Whalen is the Chairman of Whalen Global Advisors, an author, and co-founder of Institutional Risk Analytics. Chris is recognized as one of the investors who anticipated the eventual bankruptcy of Lehman Brothers and has a reputation as one of the foremost banking analysts on Wall Street. Tune in to hear Chris discuss banks, interest rates, and the leadership changes at the Federal Reserve on The Stock Podcast.

If you’d like to learn more about Chris Whalen, you should check out his blog here. Also, I highly encourage anyone interested in learning more about interest rates, credit spreads, and the dynamics behind bank earnings power to subscribe to the Institutional Risk Analyst. And if you want to dig deeper, you can purchase the quarterly IRA Bank Book.

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By Abercrombie Energy Infrastructure Investor/Analyst Teach-In

31 Aug: Jim Lucier – Energy and Infrastructure Policy Expert at Capital Alpha – The Stock Podcast, Ep.14

Jim Lucier is a Managing Director at Capital Alpha Partners, a leading Wall Street research firm providing strategic policy analysis and political forecasting. Jim leads the energy, environmental, and tax practices at Cap Alpha. Tune in to hear Jim talk to IwtB about Trump’s proposal to replace the Clean Power Plan (CPP) with the Affordable Clean Energy (ACE) rule, the Federal Energy Regulatory Commission (FERC) and its importance in the buildout of US energy infrastructure, and a conversation about Colorado’s Initiative 97 and the attempt to drastically limit fracking in the state.

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By Abercrombie Energy Public Company Renewables Utilities

17 Jul: Chad Plotkin – CFO of Clearway Energy (CWEN) – The Stock Podcast, Ep.13

Clearway Energy’s CFO Chad Plotkin joins the podcast to talk about the renewable energy business. Clearway Energy (CWEN), known previously as NRG Yield (NYLD), is one of the biggest owners of renewable energy facilities in the US. Tune in to hear Chad talk about the history of the company, the Global Infrastructure Partners (GIP) acquisition, and how CWEN’s diversified asset portfolio differentiates this yieldco from the others. It’s an extremely insightful interview, especially for investors who want to learn more about the natural deleveraging that occurs for renewable energy businesses.

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By Abercrombie Energy Investor/Analyst Midstream Renewables Teach-In Utilities

04 Jul: Steve Fleishman – Wolfe Research Utility Analyst – The Stock Podcast, Ep.12

Steve Fleishman is a Managing Director and Senior Analyst at Wolfe Research. Steve and his team cover the utilities, power, renewables, and midstream sectors at Wolfe Research. Steve has been Wall Street’s top-ranked utility analyst 14 times, so it’s an enormous honor to have him on the podcast! Tune in to hear Steve provide a great utility primer including a brief history of utilities, trends he and his team are following, and some of his thoughts on utility valuations today.

Steve agreed to come onto the program to give listeners of The Stock Podcast a utility primer. So, if you have an interest in utility investing, or you just like to gain an understanding of how utility investors think about the sector, this episode may be what you’re looking for.

You may recall from the Chris Sighinolfi interview that sector specialists like Steve know their industries forward and backward and Steve is a prime example of this. Steve has a reputation for being an extremely thoughtful analyst. If you listen to an earnings call with any of the big utilities, you’ll hear why. He asks questions that, in and of themselves, have a lot of meaning.

Apart from being one of the best analysts on Wall Street, Steve is one of the nicest guys I’ve met in the industry. He’s genuinely concerned about people, as well as their stock-picking performance. He was also one of a handful of Wall Street analysts that actually reached out to me after I quit my job to start this podcast. I consider myself fortunate to be able to call Steve a friend and he’s doing me and my listeners a big honor by coming onto the podcast.

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By Abercrombie Energy Public Company Utilities

17 Jun: Mark Harding – CEO of Pure Cycle Corp (PCYO) – The Stock Podcast, Ep.10

Mark Harding is the CEO and CFO of Pure Cycle Corporation (PCYO). Pure Cycle owns significant water rights in Colorado and provides water and wastewater services to residential, commercial, and industrial customers. Tune in to hear Mark talk about the fascinating subject of water rights in Colorado, the outlook for Pure Cycle to grow cash flows, and the compelling investment case for PCYO stock.

Pure Cycle Corporation is developing a large residential community just east of Denver, CO. But that’s not all Pure Cycle owns – the company possesses the water rights to a large swath of land east of Denver, which will be used for the benefit of Sky Ranch, the master-planned community, but also for oil and gas development in the region.

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