By Abe Raymond
In Friday's trading session, the utilities sector was underperforming its peers. While the rest of the market was making moves to the upside, utilities companies seemed to be struggling. This may concern some investors, signaling that now is the time to slowly pull out. Other investors may be considering now as a good buying opportunity.
German power utility company RWE announced Friday that it will be shutting down a few power plants in order to maintain profitability. Kinder Morgan (NYSE:KMI) also announced last week that it dropped the merger offering price for El Paso Corp. (EP), citing concern about the company's debt situation. Despite the recent bout of negativity, are there any companies that investors may be interested in?
SJW Corp (NYSE:SJW) is a water utilities company with several subsidiaries, all of which provide clients with water and water-based utilities. It is located in various states including California, Tennessee, and Texas. SJW has experienced volatile trading throughout the entire year. Interestingly, it does not appear to be tracking any commodities. Moreover, it is currently trading close to $23.75. Is now a good buying opportunity? SJW's 52-week high is around $26.
Edenor (NYSE:EDN) is an Argentinian-based electrical utilities company. For some investors, foreign companies may be an attractive investment. This can be especially so in Latin America, where many analysts and pundits believe significant growth is occurring. For a small-cap company, EDN could present itself to be a large, lucrative opportunity. Utilties are also believed to be one of the powerhouse sectors in emerging markets, as utilities are one of the first few sectors to be developed quickly.
Some analysts and pundits believe that the energy sector may be entering a golden age, which could be true, given strides taking place in the industry. Significant research and development efforts are being undertaken, and the energy landscape could change over the next few years. Investors may want to consider smaller companies in this field if they seek to capitalize on the possible opportunities in energy.
Consumers have a few options when it comes to understanding the US economy. The energy sector is one indicator that could help investors gauge where the economy is heading into the future.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.