SRE Decision Brief — research Sempra before you trade it

Business quality of Sempra: 100/100

The Berkshire-style checklist scores SRE in the "very high" band — clears nearly every rule-based Berkshire-style criterion — typically durable profitability, a manageable debt structure, and strong cash conversion over the scanned window.

Important: this score measures business quality only, not whether today's price is fair. A 90+ quality stock can still be expensive enough to be a bad deal, and a 40-quality stock can be cheap enough to compensate you for the risk. That separation is exactly why the workflow treats quality and price as two different questions that only meet at the valuation ceiling.

The valuation ceiling: the price you shouldn't pay past

Working value analysis doesn't ask "will Sempra grow?" It asks "what does $84.75 already assume?" Our two-stage residual-income model turns those assumptions into a single ceiling number. Below the ceiling you are paying a discount; above it you are paying for hope. Neither is automatically wrong — the point is knowing which one you're doing.

Run SRE's numbers yourself at the free Berkshire intrinsic value calculator — every input is documented, and you can adjust each assumption to match your own view.

How to read the WAIT signal on SRE

• Status: WAIT — no clear trend boundary yet. "No opinion" is itself a disciplined opinion.
• Age: 280 bars — an aging signal: the original reason may have expired, so run a fresh brief before relying on it.
• uPnL +0.0% · total return +9.9% — cumulative performance of the signal inside our system. It measures how the engine has behaved historically, not a forecast for you.

The right order: quality passes first → the ceiling is acceptable → thesis breaks are written down → then look at the signal. Looking at the signal first and hunting for reasons afterward is confirmation bias, and it gets everyone.

What would break the Sempra thesis (a template for Utilities)

Before investing real money, write your own break-conditions down. Common templates analysts use for Utilities names:

1. Regulators set tariffs below the submitted cost of capital
2. National renewable plans strand legacy assets
3. Debt/EBITDA drifts toward levels markets refuse to fund
4. Industrial demand for power/water contracts for a prolonged period

The point is not the list above — it's that you write yours before buying. Conditions written while you own nothing are always colder than conditions written while you are down.

Utilities peers on Balance Labs (US)

• Ameren (AEE) — quality 100 · signal LONG · compare SRE vs AEE
• American Electric (AEP) — quality 100 · signal LONG · compare SRE vs AEP
• AES (AES) — quality 100 · signal LONG · compare SRE vs AES

Terms used on this page

• Quality score — a 0-100 rule-based Berkshire-style checklist grade (earnings consistency, debt structure, cash conversion). SRE: 100 as of scan 2026-08-27.
• Valuation ceiling — the highest price your thesis can pay without underpaying for risk, computed with a documented two-stage residual-income model.
• Signal / Side — the timing engine's status as of the snapshot: LONG, SHORT, or WAIT. SRE: WAIT.
• uPnL — unrealized profit/loss accumulated by an open signal, measured from its entry price. Not your personal return.
• Age (bars) — price bars since the signal started. SRE: 280.
• Thesis break — a measurable event that should change your mind. Written before you buy, not after.