Just Energy Group (TSX:JE)(NYSE:JE) has lost more than half of its value this year, it no longer pays a dividend, and it has incurred losses over the past 12 months totaling $261 million. With all the negativity surrounding the company, it would be difficult to convince anyone to buy the stock today.
However, let’s take a look at the positives and see if there’s enough here to make the stock investable today. In its most recent quarter, the company did produce a profit of $74 million on sales of $768 million.
While the sales were down significantly from the $956 million that Just Energy brought in a year ago, it’s a big improvement on the bottom line as in the prior-year quarter the company incurred a loss of $21 million despite having higher sales.
The company is currently undergoing a strategic review of its business and its President and CEO R. Scott Gahn stated that, "Our objective for the remainder of the fiscal year is clear: we are focused on signing high-quality customers while we continue to lower our cost structure and drive improved profitability"
If Just Energy is successful in bringing down its costs it could go along way in helping the company’s financials stay consistently in the black.
The lack of a dividend, meanwhile, will free up cash flow which could help the company take on more growth initiatives to strengthen the business’ long-term prospects.
It has been a tough year for Just Energy but if the company can achieve the changes it’s looking to make, 2020 could be a much stronger year for the stock. There’s risk investing in Just Energy, but the stock still has a chance to recover from these setbacks.
