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California Water Service Group (NYSE:CWT), currently valued at $2.66 billion and maintaining a Fair Value rating according to InvestingPro analysis, has entered into an equity distribution agreement with several financial institutions, allowing for the sale of up to $350 million of its common stock through an at-the-market equity program. The agreement, dated May 14, 2025, involves Robert W. Baird & Co. Incorporated, BofA Securities, Inc., Morgan Stanley (NYSE:MS) & Co. LLC, Wells Fargo (NYSE:WFC) Securities, LLC, Janney Montgomery Scott LLC, RBC Capital Markets, LLC, Blaylock Van, LLC, and Samuel A. Ramirez & Company, Inc., acting as sales agents or forward sellers.
The sales agents or forward sellers will sell shares on the New York Stock Exchange at market prices or negotiated prices. The program also allows for forward sale agreements with forward purchasers, where the shares will be borrowed and sold to hedge the forward purchaser’s position. The company may settle these agreements with cash, shares, or a combination of both.
California Water Service Group plans to use the proceeds from the sale of stock for general corporate purposes, which may include capital expenditures, investments, and debt servicing. The equity distribution agreement stipulates that the company will pay a commission of 1.0% of the gross sales price to the sales agents.
The company has stated that this offering is pursuant to its existing shelf registration and a prospectus supplement filed with the SEC on May 14, 2025. The company’s legal counsel, Gibson, Dunn & Crutcher LLP, has provided an opinion on the validity of the securities issued.
This report is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, California Water Service Group reported its first-quarter earnings for 2025, with an earnings per share (EPS) of $0.22, surpassing analysts’ expectations of $0.16. However, the company generated $203.97 million in revenue, which fell short of the anticipated $207.6 million. Despite the revenue miss, the company highlighted its continued investments in water infrastructure and maintained strong liquidity. The company reported GAAP operating revenue of $240 million, a decline from $270.7 million in the first quarter of 2024. Net income for the quarter was $13.3 million, or $0.22 per diluted share, down from $69.9 million, or $1.21 per share, in the previous year. Analysts noted the company’s focus on managing controllable expenses and monitoring tariff impacts as part of its ongoing 2024 California General Rate Case process. The company also projects continued capital investments, particularly in infrastructure, with a compound annual growth rate of 11.7% for its rate base. CEO Marty Kropelnicki expressed satisfaction with the quarter’s results, while CFO James Lynch emphasized the company’s strong liquidity profile.
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