Nov. 12, 2014, 2:14 PM
- Utility stocks, among the year’s top performing sectors in the market, are sharply lower today - a bad sign, says Weeden & Co. head researcher Michael Purves, who believes now is the time to reduce or hedge utility holdings such as the Utilities Select Sector SPDR Fund (XLU -1.9%).
- Ultra-low bond yields have made utility stock payouts look good by comparison., but valuations have been moving up; Purves says the rally has put XLU’s P/E ratio for the next 12 months at 17.4x, near a 10-year high.
- Investors ought to “start to take profits, given the run was getting long in the teeth,” Purves writes.
- The top 10 XLU holdings are all lower today: DUK -2.5%, NEE -1.7%, D -1.9%, SO -1.4%, EXC -2.8%, AEP -2%, SRE -1.7%, PPL -1.8%, PCG -1%, PEG -2.8%.
- Other ETFs: IDU, VPU, UPW, RYU, FUTY, FXU, PUI, SDP
Sep. 18, 2014, 12:53 PM
- Banks, insurers, brokerages and anything else starved for yield continue to gain following yesterday's FOMC news. Among the gainers are Bank of America (BAC +1.9%) - which breaks above $17 for the first time since April - Citigroup (C +2.7%), Wells Fargo (WFC +1.1%), PNC (PNC +1.1%), Fifth Third (FITB +1.7%), SunTrust (STI +1.2%), Schwab (SCHW +2.3%), Prudential (PRU +2.5%), and Lincoln National (LNC +2.4%).
- The XLF +1.2%, KBE +1.5%, and KRE +2%.
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
- Lit up bright red is the utility sector (XLU -1%), led by Southern Company (SO -1.1%), Dominion Resources (D -1.2%), Duke Energy (DUK -1.4%), and Pinnacle West (PNW -1.9%).
- Utility ETFs: XLU, IDU, VPU, UPW, RYU, FUTY, PUI, FXU, SDP, PSCU
Jun. 25, 2014, 3:55 PM
Jun. 3, 2014, 12:45 PM
- EPA chief Gina McCarthy says she expects for significant changes in proposed state emission goals before a final rule is issued next year if the individual states show they can’t meet the targets.
- McCarthy says the agency made changes when developing its rules on mercury pollution in 2012 after utilities complained, and says she "wouldn’t be surprised if we made significant” revisions to the carbon proposal.
- McCarthy notes "confusion" around the targeted 30% emission cuts, saying it’s not a goal of the plan but an estimate of what the EPA thinks can be achieved.
- Coal names are broadly lower: WLT -4.4%, ACI -3.7%, ANR -2%, ARLP -1.9%, CNX -1.3%, CLD -0.3%, BTU -0.2%.
- Big utilities are mostly higher: EXC +1.6%, AEP +1%, NRG +0.7%, D +0.5%, XEL +0.4%, SO +0.3%, PEG +0.2%, NEE +0.1%, DUK -0.2%
- ETFs: XLE, XLU, TAN, ERX, KOL, IDU, VDE, OIH, ERY, FCG, VPU, DIG, KWT, GASL, DUG, IYE, GASX, PXJ, RYE, FENY, UPW, RYU, FUTY, FXN, FXU, DDG, SDP
Apr. 30, 2014, 12:54 PM
- Rex Energy (REXX +3.2%) says it signed binding agreements with Dominion (D) and Texas Gas Transmission to pipe natural gas from Pennsylvania to the midwest and Gulf coast.
- The Dominion deal will allow for expanded capacity on ~235 miles of existing pipeline, while the Texas Gas agreement will allow for expanded capacity on ~690 miles of existing pipeline.
- Northland Capital raises its REXX price target to $28 from $25 following the gas transport deals as well as an impressive Q1 earnings report, as production exceeded the high end of guidance and EBITDA beat the firm's estimate (Briefing.com).
- Financial terms of the separate deals were not disclosed.
Mar. 11, 2014, 2:19 PM
- NRG Energy (NRG +1.7%) agrees to acquire Dominion Resources' (D -0.2%) retail electric business for an undisclosed sum, in a bid to expand its presence in the northeastern U.S. and Texas.
- Dominion's retail electric business serves more than 600K customers in northern states from Illinois to New York, while its Cirro Energy brand is focused on Texas.
- NRG has made a steady series of deals to boost its retail power business and its collection of power plants; it became the biggest wholesale electric company in the U.S. last year after it acquired GenOn Energy for ~$1.7B, and it is buying coal plants, wind farms and other assets out of bankruptcy from an Edison International subsidiary.
Oct. 16, 2013, 3:38 PM
- Arch Coal (ACI -5.6%) is downgraded to Underweight from Equal Weight at Morgan Stanley, which expects even cheaper natural gas will knock down coal prices and ACI’s profits.
- ACI is a thermal-heavy name with significant balance sheet leverage, making it vulnerable to prolonged depressed market conditions, the firm says.
- Exelon (EXC -2.7%), which the firm also downgraded, is taking a hit; Consol Energy, which is also exposed to east coast coal is down too.
- The firm sees two utilities benefiting from current trends; Calpine (CPN +0.8%) and Dominion Resources (D +2%), although the advantage may already be priced into D’s shares.
Oct. 8, 2013, 2:56 PM
- Jim Cramer touts three dividend yielding utilities as the strongest bounceback candidates in the event of a U.S. default.
- Dominion's (D +0.2%) strong core utility business allows for the continued increase in dividends, Cramer says, and an MLP spinoff will bring in lots of cash.
- ConEdison (ED +1.5%) is a stock Cramer believes is somewhat insulated from the D.C. debacle simply because it services the New York metro area.
- He likes Southern Company's (SO +1.4%) "long-term history of paying the dividend through the toughest times imaginable... they get the sanctity of the dividend better than just about any other utility."
- Separately, New York Gov. Cuomo calls on the state's Public Service Commission to reject ED’s request for a rate hike next year.
- Utilities are generally higher today as investors avoid riskier bets amid shutdown and default nervousness.
Sep. 12, 2013, 11:54 AM
- Any talk of MLPs still excites investors, as shares of Dominion Resources (D +3.5%) surge after the energy producer said earlier today at the Barclays energy conference that it intends to create a master limited partnership by contributing assets with up to $1B-$2B of EBITDA.
- Yesterday, the Obama administration authorized natural gas exports from Dominion's Cove Point terminal in Maryland; the company sees Cove Point as a key part of the prospective MLP.
Sep. 12, 2013, 9:11 AM
Aug. 27, 2013, 3:59 PM
- Entergy's (ETR -0.8%) closing of its Vermont Yankee nuclear reactor is the latest evidence of the financial pressures confronting the U.S. nuclear industry caused by the shale gas boom.
- ETR’s news follows Duke Energy’s (DUK) retirement of the Crystal River plant in Florida, Dominion’s (D) closure of the Kewaunee plant in Wisconsin, and Edison's (EIX) retirement of both units at the San Onofre plant in California, as utilities decide that investing in older reactors is no longer commercially viable.
- The head of the Nuclear Energy Institute says failure to reform power markets to support nuclear power would “jeopardize reliable electricity supplies."
- ETFs: URA -3.4%, NLR -1.4%, NUCL -0.5%.
Jul. 5, 2013, 10:58 AM
May. 30, 2013, 11:17 AMUtilities are getting a bit of a reprieve after taking a beating over the past few days. Option implied volatility has been increasing as investors rotate out of high dividend yield positions in the wake of a rise in treasury yields: AEE +1.7%, D +0.3%, DTE +1.9%, EIX +0.6%, ETR +1.3%, EXC +0.7%, FE +0.9%, NEE +1.7%, PEG +0.8%, PPL +0.5%, SRE +1.3%, TE +0.5%, AEP +0.8%, DUK +0.6%, ED NU +1.6%, PCG +1.2%, SO +0.4%, XEL +1.3%. | 5 Comments
Mar. 15, 2013, 2:59 PMCenterPoint (CNP +7.8%) and OGE Energy (OGE +10%) both hit multiyear highs on plans to combine pipeline and related assets into an MLP, providing a source of capital as they take advantage of oil and gas demand. The deal could pave the way for other utilities to follow suit; Tudor Pickering sees Sempra Energy (SRE), Dominion Resources (D) and NiSource (NI) as candidates to form similar partnerships. | 1 Comment
Dec. 14, 2012, 9:00 AMFuelCell Energy (FCEL) +9.9% premarket after announcing the sale of a 14.9 MW fuel cell park in Bridgeport, Conn., which includes the manufacture and sale of five of FCEL's 2.8 MW fuel cell power plants. Connecticut Light and Power will buy the clean electricity generated by the facility under a 15-year fixed price energy purchase agreement. Dominion (D) owns the facility and will oversee development. | 1 Comment
Jul. 24, 2012, 3:58 PMShares of Ryder System (D +5.8%) buck a weak tape today after posting a mixed Q2 but raising its outlook to the high-end of consensus estimates. The company now sees Q3 adjusted EPS coming in at $1.15 - $1.22 per share, and FY12 earnings of $3.75 - $3.90, versus Street EPS expectations of $1.17 and $3.76 respectively. | 1 Comment
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