Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Written in the voice and framework of Warren Buffett and Charlie Munger, from our own independent reading of the Q2 2026 Form 10-Q, the rate case record, and current market data. Pinnacle West is a simple business we understand completely: a regulated electric monopoly serving most of Arizona through its subsidiary, Arizona Public Service. It sits in the middle of one of the great demand booms in American electricity — Phoenix data centers, semiconductor fabs, and relentless population growth. And yet, after studying a decade of numbers, we arrive at an unsentimental conclusion: this is an average business, not a wonderful one. The moat is real but its economics are capped by a regulator with a documented history of stinginess. The company consumes far more cash than it generates — every year, without exception — and funds the gap by issuing debt and shares.
Recent filings analysed: 8-K (2026-08-04), 10-Q (2026-08-04), 8-K (2026-08-04), 8-K (2026-06-29).
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