Fortis Inc., the Canadian utility giant, seems like a safe haven for investors. Steady dividends, a predictable business model – what could possibly go wrong? But a closer look at their recent financial data reveals a chilling trend that should have every investor sitting up and taking notice. While Wall Street obsesses over quarterly earnings, a far more sinister picture emerges when you delve into the company's balance sheet.

The key lies not in the fluctuations of revenue or net income, but in the steadily mounting debt burden Fortis has been accumulating. While a certain amount of debt is normal, even beneficial, for a utility company, Fortis's debt has ballooned to truly alarming proportions.

Fortis Inc. Total Liabilities (2011-2023)

Just compare these figures: In 2011, Fortis's total liabilities stood at a manageable $8.885 billion. Fast forward to 2023, and that number has exploded to a staggering $42.588 billion. That's an almost fivefold increase in just over a decade!

And it's not just the sheer size of the debt that's concerning; it's the composition. Short-term debt, the kind that needs to be repaid quickly, has become a significant portion of their overall liabilities, rising from $159 million in 2011 to $2.415 billion in 2023. This indicates a potential cash flow crunch looming on the horizon.

What's driving this insatiable hunger for borrowed capital? One theory is that Fortis is engaged in a desperate, debt-fueled expansion spree. The company has been aggressively acquiring smaller utilities in recent years, attempting to build a North American energy empire. But this expansion comes at a cost, and that cost is being financed with ever-increasing levels of debt.

The problem with this strategy is that it's based on the assumption of continued low interest rates. As rates rise, Fortis's interest expense will skyrocket, putting a tremendous strain on their already stretched finances.

The situation is further aggravated by Fortis's declining net working capital, which has plunged from a surplus of $78 million in 2012 to a deficit of $1.939 billion in 2023. This shrinking pool of available funds is a clear warning sign that Fortis is struggling to meet its short-term financial obligations.

What does this all mean for investors? The potential for a "Fortis Short" scenario is becoming increasingly plausible. As their debt burden grows and interest rates rise, the company may find itself unable to service its debt, leading to a sharp drop in stock price, a suspension of dividends, or even bankruptcy.

While the mainstream financial media remains fixated on superficial metrics like earnings per share, savvy investors should be paying close attention to the ticking time bomb lurking in Fortis's debt. Is Fortis the next big short? Only time will tell. But the signs are undeniably there, and those who ignore them do so at their own peril.

"Fun Fact: Fortis derives its name from the Latin word for "strong," but its recent financial trends suggest a potentially fragile foundation."