Hey @Stocktective,
First off, kudos for the honesty in the introduction—you can tell right away that ChatGPT did the legwork here. It’s nicely formatted, sure, but let’s strip away the AI fluff and run this through a real, tough filter. You asked for other opinions, so here’s my take on Central Puerto S.A.—unflinching and without rose-colored glasses:
1. The balance sheet joke (9.5/10 stars):
You (or rather, your “investment committee”) are seriously giving the balance sheet 9.5 out of 10 stars because the debt-to-EBITDA ratio is 1.1. That’s fantastic in a normal country. But we’re in Argentina here! What good is “low debt” if revenue is generated in a currency (the peso) that’s essentially in free fall, while parts of the debt or investments must be serviced in hard U.S. dollars? A balance sheet in a country with capital controls and a history of hyperinflation will never get 9.5 stars. Period.
2. The ROIC Trap:
You write yourself: ROIC at about 7%. That’s okay for an infrastructure company in the West. In Argentina, however, the cost of capital (WACC) is astronomically high due to the massive country risk. If the cost of capital is 15% or 20%, but the company only generates a 7% return on its investments (such as forestry and batteries), then the bottom line is active capital destruction.
3. The Dividend Illusion:
Hidden under “Open Questions” lies the real nail in the coffin: “When will resuming the dividend make economic sense?”
Translation: The country’s largest private electricity producer is not currently paying dividends reliably because it either needs the cash for acquisitions or it’s tied up in the Argentine system.
My Conclusion:
For my own strategy, this stock is pure poison because it’s stuck right in the “dead middle”:
As a cash cow, it’s completely useless because it lacks a reliable dividend. As a speculative investment, it’s the wrong vehicle, because a cumbersome power plant in Buenos Aires is no growth rocket.
Your entire thesis (“bull case”) is based on the hope that Javier Milei will normalize the economy. Anyone who buys this stock isn’t investing in a power plant—they’re heading to the casino and betting everything on the “Argentine politics” color.
Nice formatting, but anyone who overlooks the dividend for an emerging-market utility and rates a peso-denominated balance sheet with 9.5 stars is definitely drinking the wrong beer at the beer garden! 😉 No hard feelings, and thanks for the input!
First off, kudos for the honesty in the introduction—you can tell right away that ChatGPT did the legwork here. It’s nicely formatted, sure, but let’s strip away the AI fluff and run this through a real, tough filter. You asked for other opinions, so here’s my take on Central Puerto S.A.—unflinching and without rose-colored glasses:
1. The balance sheet joke (9.5/10 stars):
You (or rather, your “investment committee”) are seriously giving the balance sheet 9.5 out of 10 stars because the debt-to-EBITDA ratio is 1.1. That’s fantastic in a normal country. But we’re in Argentina here! What good is “low debt” if revenue is generated in a currency (the peso) that’s essentially in free fall, while parts of the debt or investments must be serviced in hard U.S. dollars? A balance sheet in a country with capital controls and a history of hyperinflation will never get 9.5 stars. Period.
2. The ROIC Trap:
You write yourself: ROIC at about 7%. That’s okay for an infrastructure company in the West. In Argentina, however, the cost of capital (WACC) is astronomically high due to the massive country risk. If the cost of capital is 15% or 20%, but the company only generates a 7% return on its investments (such as forestry and batteries), then the bottom line is active capital destruction.
3. The Dividend Illusion:
Hidden under “Open Questions” lies the real nail in the coffin: “When will resuming the dividend make economic sense?”
Translation: The country’s largest private electricity producer is not currently paying dividends reliably because it either needs the cash for acquisitions or it’s tied up in the Argentine system.
My Conclusion:
For my own strategy, this stock is pure poison because it’s stuck right in the “dead middle”:
As a cash cow, it’s completely useless because it lacks a reliable dividend. As a speculative investment, it’s the wrong vehicle, because a cumbersome power plant in Buenos Aires is no growth rocket.
Your entire thesis (“bull case”) is based on the hope that Javier Milei will normalize the economy. Anyone who buys this stock isn’t investing in a power plant—they’re heading to the casino and betting everything on the “Argentine politics” color.
Nice formatting, but anyone who overlooks the dividend for an emerging-market utility and rates a peso-denominated balance sheet with 9.5 stars is definitely drinking the wrong beer at the beer garden! 😉 No hard feelings, and thanks for the input!
•
55
•
@Raketentoni Thanks for the honest feedback and the points you raised👍
I’ll chime in again because I think you’re trying to get off a little too easily with your assumptions 😁
For now, I’m objectively evaluating a company’s balance sheet here; we factor country risk into our assessment elsewhere. Just because $CEPU is based in Argentina doesn’t mean the balance sheet has a -7 starting point, but we can agree on 9 😉 I’d let the peso argument count if we were 100% dependent on the peso here, but that’s no longer the case.
-> USD PPAs (no devaluation due to inflation)
-> Export business is slowly being developed (USD)
-> Revenue comes in hard currency (USD-linked)
In December 2025, management stated that approximately 97% of energy revenue was in USD or USD-linked. There’s no longer a free fall here; the situation has changed.
ROIC isn’t a trap but the foundation of the thesis—though it remains an open question; past performance isn’t a guarantee of future results. Why would the IFC support projects that have no chance of profitability from the start? The assumption of a 15–20% WACC is all well and good, but where does that figure come from?
Incremental ROIC is still pending—what if it turns out to be 15% instead of 7%?
The dividend issue, for example, made me dig a little deeper and got me curious: why suspend it to make a bad investment? Could management be anticipating a high future ROIC here? Would I prefer to take on more debt given the country risk and pay out dividends? I don’t think so.
By the way, if you’d been drinking real beer, you’d have noticed that the thesis isn’t based solely on Javier Milei—it’s about quality infrastructure, a strong balance sheet, hopefully excellent capital allocation, and Argentina’s steady progress 💸
Probably not really a fit for your strategy, unless it skyrockets on a re-rating if Milei provides a tailwind 🤣
I’ll chime in again because I think you’re trying to get off a little too easily with your assumptions 😁
For now, I’m objectively evaluating a company’s balance sheet here; we factor country risk into our assessment elsewhere. Just because $CEPU is based in Argentina doesn’t mean the balance sheet has a -7 starting point, but we can agree on 9 😉 I’d let the peso argument count if we were 100% dependent on the peso here, but that’s no longer the case.
-> USD PPAs (no devaluation due to inflation)
-> Export business is slowly being developed (USD)
-> Revenue comes in hard currency (USD-linked)
In December 2025, management stated that approximately 97% of energy revenue was in USD or USD-linked. There’s no longer a free fall here; the situation has changed.
ROIC isn’t a trap but the foundation of the thesis—though it remains an open question; past performance isn’t a guarantee of future results. Why would the IFC support projects that have no chance of profitability from the start? The assumption of a 15–20% WACC is all well and good, but where does that figure come from?
Incremental ROIC is still pending—what if it turns out to be 15% instead of 7%?
The dividend issue, for example, made me dig a little deeper and got me curious: why suspend it to make a bad investment? Could management be anticipating a high future ROIC here? Would I prefer to take on more debt given the country risk and pay out dividends? I don’t think so.
By the way, if you’d been drinking real beer, you’d have noticed that the thesis isn’t based solely on Javier Milei—it’s about quality infrastructure, a strong balance sheet, hopefully excellent capital allocation, and Argentina’s steady progress 💸
Probably not really a fit for your strategy, unless it skyrockets on a re-rating if Milei provides a tailwind 🤣
•
33
•