Companhia Energetica Minas Gerais (ADR)(NYSE:CIG) Electric Utility Value


Dallas, Texas 04/08/2014 (FINANCIALSTRENDS) – Companhia Energetica Minas Gerais (ADR)(NYSE:CIG) rides high on reputation – and delivers on the value. It has equity interests for 170 companies including 72 power plants. The power utility in Brazil, offers equivalent of 7 million users in over 774 municipalities in 23 states.

Cemig manages electrical distribution network in Latin America, which is one of the four largest in the world. The enterprise structure of Cemig will now offer core business segments – Power generation, transmission as well as distribution.

Companhia Energetica Minas Gerais (ADR)(NYSE:CIG) has value-laden qualities and is perhaps only one of the electric companies from Latin America listed on the 150-stock index. The company continues to be listed on this Index, which was begun in 1999.

Companhia Energetica Minas Gerais (ADR)(NYSE:CIG) is recognized for such parameters as – long term economic factors, environmental as well as social criteria – to match sustainability needs of the industry.

The criteria for this index, is that the company should be the top performer for that industry.

However, Companhia Energetica Minas Gerais (ADR)(NYSE:CIG) has begun to see the downward slide due to the poor Brazilian economy. As the inflation in the country increased by nearly 6%, besides, other downgrades due to sovereign debt.

Companhia Energetica Minas Gerais (ADR)(NYSE:CIG) was affected by the poor economic conditions including investors going away from the country in 2013. Besides, the company also had to take the toll of rate reductions on electricity in the middle of 2013.

However, the greatest obstacle in CIGs growth was the refusal by the government – to renew licenses for operations. The company has since engaged in litigation to reverse trends.

Its current valuation is attractive for investors looking for an opportunity to enter the South American consumer markets as CEMIG does have the reach, infrastructure as well as the reputation to setup value-based business model.