In this week’s StockPointer content analysis (see attachment), we take a look at Fortis (FTS), which just released their 3rd quarter results last Friday. 
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Besides having improved its accounting performance, Fortis was also able to improve its economic performance. Over the last 12 months, FTS generated its highest return on capital in the last 5 years, while maintaining a low cost of capital.
Thanks to a TTM NOPAT that has been increasing since September 2012 and well controlled capital charges, Fortis’ TTM EVA just hit a 5-year high.
As of November 10th, Fortis’ P/IV ratio was at 0.93, suggesting the stock was still trading at a discount to its intrinsic value in spite of last month’s rally. For the first time since Q2 2010, FTS is also trading at a discount to its current operating value with an FGV/EV of -11.5%. This is happening as Fortis completes its acquisition of UNS Energy. The negative FGV indicates that the market might have some doubts on Fortis considering that it just closed its acquisition of UNS Energy.
