NSTAR ELECTRIC CO

NSAROdata completeness 88%3 fiscal years on file

Data notes: no data for concept 'revenue'; no data for concept 'epsDiluted'

The thesis, from the filings

NSTAR ELECTRIC CO earns about 8% on invested capital, below its ~9% cost of capital, with a roughly flat share count — no moat visible in the numbers. The estimate methods put fair value between $25.8M and $33.9M a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2009FY 2010FY 2011
Revenue
Net income$240.7M1$248.6M1$252.5M1
Operating cash flow$523.5M2$556M2$721.2M2
Capital expenditure$319.5M3$308.6M3$381.2M3
Free cash flow (derived)$204M2$247.4M2$339.9M2
Total debt$1.97B4$1.38B4
Cash & equivalents$7.46M5$8.96M5$9.37M5
Diluted shares100100

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$223.2M
your share of equity
Profit it earned you last year
$25.2M
Free cash flow it threw off
$34M
Debt you’d be carrying
$138.5M

10 shares is a claim on $223.2M of net worth that earned you $25.2M and generated $34M of cash last year, against $138.5M of debt.

iii. Is this a good business?
Moat signal · return on invested capital
8% avg · 3y
FY09 FY10 7%FY11 8%

It earned about 8% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
−0% shares · 3y

Share count is roughly flat over 3 years — little dilution, little buyback. Total debt has fallen 30% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $25.8M and $33.9M a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$33.9M
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$247.4M
DCF · Growth Exit 5Y
$30.2M
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$247.4M
Earnings Power Value
$25.8M
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$248.6M
  • growthAssumed0.0%
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $30.2M
The three cases
Bear0.0%$21.6M
Base5.0%$30.2M
Bull10.0%$40.4M

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2009-12-31 · accession 0001193125-12-043962 (NetIncomeLoss)
  2. 10-K · period ending 2009-12-31 · accession 0001193125-12-043962 (NetCashProvidedByUsedInOperatingActivities)
  3. 10-K · period ending 2009-12-31 · accession 0001193125-12-043962 (PaymentsToAcquirePropertyPlantAndEquipment)
  4. 10-K · period ending 2010-12-31 · accession 0001193125-12-043962 (LongTermDebtNoncurrent)
  5. 10-K · period ending 2009-12-31 · accession 0001193125-12-043962 (CashAndCashEquivalentsAtCarryingValue)