TLN is a strong buy at current level

Talen Energy Corporation (TLN) is a spinoff from PPL Corporation, operates as a competitive energy and power generation company in the United States. Talen has a portfolio of natural gas, coal, nuclear, oil, and other renewable generation assets, generates and sells electricity from 24 power plants supplying above 16,000 megawatts of capacity.

I won’t get into all the details as you can read a detailed review on the company from one of my former students. Bottom line is that TLN is not too leverage but highly profitable (if you ignore one-time impairments) and currently traded at EV/EBITDA of only 4.5 for 2015 and future EV/EBITDA of 5.2 for 2016. This is extremely cheap compared to other competitors.

The energy sector is still under pressure these days as oil price continues its drop, so it can take time for the stock to rebound. However, smart investors shouldn’t try to time the market and wait for additional dip, as at $6.15 TLN is definitely a strong buy that could more than double in the next few years.

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