Cia Energetica de Minas Gerais (CEMIG)

“CEMIG's regulated monopoly in Minas Gerais provides revenue stability but not compounding economics — ANEEL caps returns at sub-WACC levels, the state-controlled board systematically prioritizes political objectives over capital discipline, net debt has doubled in two years, levered FCF is deeply negative, and chronic BRL depreciation ensures that even modest local-currency gains evaporate in hard-currency terms. The low trailing P/E is a function of collapsing earnings, not genuine cheapness. Absent privatization — a political event with no credible timeline — there is no mechanism to close the discount to better-run private peers, and minority shareholders continue to absorb the costs of state ownership with none of the optionality.”