Seeking Alpha

Gabelli's electric utilities 2014 outlook says fundamentals remain strong

  • Gabelli recommends investors take advantage of the 2013 under-performance in utilities stocks (XLU) to selectively build positions, emphasizing that sector fundamentals remain strong, including solid balance sheets, positive credit outlooks and generally constructive state public utility commission regulation.
  • Interest rates, natural gas prices and economic growth will continue to be major macro drivers of utility stock performance, while individual rate case decisions, service area growth and consolidation are the more important micro drivers, the firm says.
  • Top ideas include Calpine (CPN), NextEra Energy (NEE), and Westar Energy (WR).
  • More ETFs: IDU, VPU, RYU, PUI, UPW, SDP, FXU, PSCU, FUTY, UTLT.
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