AC Investment Research

NEP NextEra Energy Partners LP Common Units representing limited partner interests Research Report

Outlook: NextEra Energy Partners LP Common Units representing limited partner interests assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Sell
Time series to forecast n: 26 Dec 2022 for (n+1 year)
Methodology : Modular Neural Network (Market Direction Analysis)

Abstract

Complex networks in stock market and stock price volatility pattern prediction are the important issues in stock price research. Previous studies have used historical information regarding a single stock to predict the future trend of the stock's price, seldom considering comovement among stocks in the same market. In this study, in order to extract the information about relation stocks for prediction, we try to combine the complex network method with machine learning to predict stock price patterns.(Yu, P. and Yan, X., 2020. Stock price prediction based on deep neural networks. Neural Computing and Applications, 32(6), pp.1609-1628.) We evaluate NextEra Energy Partners LP Common Units representing limited partner interests prediction models with Modular Neural Network (Market Direction Analysis) and Ridge Regression1,2,3,4 and conclude that the NEP stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Sell

Key Points

  1. Is it better to buy and sell or hold?
  2. Short/Long Term Stocks
  3. Why do we need predictive models?

NEP Target Price Prediction Modeling Methodology

We consider NextEra Energy Partners LP Common Units representing limited partner interests Decision Process with Modular Neural Network (Market Direction Analysis) where A is the set of discrete actions of NEP stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


F(Ridge Regression)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Modular Neural Network (Market Direction Analysis)) X S(n):→ (n+1 year) i = 1 n s i

n:Time series to forecast

p:Price signals of NEP stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do AC Investment Research machine learning (predictive) algorithms actually work?

NEP Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: NEP NextEra Energy Partners LP Common Units representing limited partner interests
Time series to forecast n: 26 Dec 2022 for (n+1 year)

According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Sell

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

IFRS Reconciliation Adjustments for NextEra Energy Partners LP Common Units representing limited partner interests

  1. A portfolio of financial assets that is managed and whose performance is evaluated on a fair value basis (as described in paragraph 4.2.2(b)) is neither held to collect contractual cash flows nor held both to collect contractual cash flows and to sell financial assets. The entity is primarily focused on fair value information and uses that information to assess the assets' performance and to make decisions. In addition, a portfolio of financial assets that meets the definition of held for trading is not held to collect contractual cash flows or held both to collect contractual cash flows and to sell financial assets. For such portfolios, the collection of contractual cash flows is only incidental to achieving the business model's objective. Consequently, such portfolios of financial assets must be measured at fair value through profit or loss.
  2. The following are examples of when the objective of the entity's business model may be achieved by both collecting contractual cash flows and selling financial assets. This list of examples is not exhaustive. Furthermore, the examples are not intended to describe all the factors that may be relevant to the assessment of the entity's business model nor specify the relative importance of the factors.
  3. If, at the date of initial application, it is impracticable (as defined in IAS 8) for an entity to assess whether the fair value of a prepayment feature was insignificant in accordance with paragraph B4.1.12(c) on the basis of the facts and circumstances that existed at the initial recognition of the financial asset, an entity shall assess the contractual cash flow characteristics of that financial asset on the basis of the facts and circumstances that existed at the initial recognition of the financial asset without taking into account the exception for prepayment features in paragraph B4.1.12. (See also paragraph 42S of IFRS 7.)
  4. The underlying pool must contain one or more instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

NextEra Energy Partners LP Common Units representing limited partner interests assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Modular Neural Network (Market Direction Analysis) with Ridge Regression1,2,3,4 and conclude that the NEP stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Sell

NEP NextEra Energy Partners LP Common Units representing limited partner interests Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Baa2
Balance SheetBaa2Baa2
Leverage RatiosBaa2Caa2
Cash FlowBaa2Caa2
Rates of Return and ProfitabilityBaa2Caa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 85 out of 100 with 668 signals.

References

  1. Mnih A, Kavukcuoglu K. 2013. Learning word embeddings efficiently with noise-contrastive estimation. In Advances in Neural Information Processing Systems, Vol. 26, ed. Z Ghahramani, M Welling, C Cortes, ND Lawrence, KQ Weinberger, pp. 2265–73. San Diego, CA: Neural Inf. Process. Syst. Found.
  2. S. Bhatnagar and K. Lakshmanan. An online actor-critic algorithm with function approximation for con- strained Markov decision processes. Journal of Optimization Theory and Applications, 153(3):688–708, 2012.
  3. Bennett J, Lanning S. 2007. The Netflix prize. In Proceedings of KDD Cup and Workshop 2007, p. 35. New York: ACM
  4. Chipman HA, George EI, McCulloch RE. 2010. Bart: Bayesian additive regression trees. Ann. Appl. Stat. 4:266–98
  5. Tibshirani R, Hastie T. 1987. Local likelihood estimation. J. Am. Stat. Assoc. 82:559–67
  6. Athey S, Wager S. 2017. Efficient policy learning. arXiv:1702.02896 [math.ST]
  7. Vilnis L, McCallum A. 2015. Word representations via Gaussian embedding. arXiv:1412.6623 [cs.CL]
Frequently Asked QuestionsQ: What is the prediction methodology for NEP stock?
A: NEP stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Direction Analysis) and Ridge Regression
Q: Is NEP stock a buy or sell?
A: The dominant strategy among neural network is to Sell NEP Stock.
Q: Is NextEra Energy Partners LP Common Units representing limited partner interests stock a good investment?
A: The consensus rating for NextEra Energy Partners LP Common Units representing limited partner interests is Sell and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of NEP stock?
A: The consensus rating for NEP is Sell.
Q: What is the prediction period for NEP stock?
A: The prediction period for NEP is (n+1 year)

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