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Friday, August 17, 2012, 8:59 AM Another graphic look (via ukarlewitz) at the recent rally which is notable for its rotation into roughed up sectors like Energy, Materials, Industrials, and Discretionary, and out of popular defensive plays like Utilities, Health Care, and Staples. Have the hedge funds been caught wrong-footed again? 2 Comments
Tuesday, August 14, 2012, 8:55 AM More on the BAML fund manager survey: Overowned assets include defensive sectors like REITs, Consumer Staples, Pharma, and Bonds. Underowned: Materials, Banks, Japan, Eurozone, Energy, and Equities in general. Comment! [Quick Ideas]
Tuesday, August 14, 2012, 8:11 AM A nice summary (via tradefast) of Q2 13F filings shows hedge funds riding the defensive play trend, adding to holdings in Consumer Staples, Health Care, Telecom, and Utilities, while cutting exposure to Tech, Energy, Financials, and Materials. Comment!
Tuesday, August 7, 2012, 11:28 AM A graphic look at the rotation into neglected sectors - Energy (XLE), Discretionary (XLY), Cyclical (FCL), and Retail (XRT) are all moving higher the past few sessions, while the popular mREITs (represented by NLY), Utilities (XLU), Pharmaceuticals (IHE), and Staples (XLP) all sell off. 4 Comments
Wednesday, July 25, 2012, 10:25 AM Investors starved for income should be wary of overpaying for yield, particularly when it comes to utilities, Russ Koesterich of iShares warns. Utilities trade at a discount of ~25% on average to the S&P 500, but they're now trading at a premium of more than 8%. But National Grid (NGG) might be one utility stock that’s been beaten up enough to get long, Greg Harmon suggests. 1 Comment [Quick Ideas]
Wednesday, July 18, 2012, 3:23 PM The sector ETFs most above their 200-day moving average are all defensive plays, notes Reuters' John Kozey. Health Care (XLV) is 8% above, Consumer Staples (XLP) 7% above, and Utilities (XLU) 6% above. YTD performance vs. SPY, which is right at its 200-day moving average. Comment!
Tuesday, July 17, 2012, 3:31 PM A 4.1% dividend rate on a regulated utility selling at a 15 PE may look attractive, writes Martin Sosnoff, but payout ratios are nearly 70% of slow-growing earnings. Instead take a look at healthcare, yielding a similar amount but with lower payout ratios. His favorites are BMY, MRK, PFE, and UNH. Of note, the XLV hit an all-time high today. 2 Comments [Energy, Healthcare]
Tuesday, June 5, 2012, 11:34 AM Utilities continue to be "crisis-proof," the XLU rising 0.6% in May as SPY fell 6%. The sector similarly outperformed during panics in 2010 and 2011 and has more than doubled the return of the S&P since inception in late 1998. Domestically-generated revenues, falling input costs and interest rates, and best of all, the defensive nature of the sector continue to make it look attractive. 1 Comment
Saturday, April 21, 2012, 8:45 AM The bulls are building a sandcastle on the cover of Barron's, whose Big Money poll may be of dubious predictive value, but gives a great summation of the current conventional wisdom. Some areas of leaning to one side of the boat: Just 2% of those surveyed are bullish on Treasurys, and while 31% feel tech is the place to be over the next 6-12 months, not one thinks it could be the worst performer. A not-yet-IPOed Facebook makes the list of most overvalued stocks. 11 Comments
Tuesday, March 27, 2012, 12:45 PM Natural gas takes out its post-financial crisis bottom, now at its lowest level in a decade. The tiny price (check out this chart!) offers "a competitive advantage across the U.S. manufacturing base ... companies that had left the U.S. in sectors like chemicals and fertilizers are talking about coming back to take advantage." 4 Comments [Energy, U.S. Economy]
Tuesday, February 21, 2012, 5:34 AM Last year utilities gained 15%, beating every other S&P 500 sector. Though it's the worst performer YTD, the WSJ explains why it's worth sticking with the sector. Comment! [Quick Ideas]
Saturday, November 12, 2011, 7:55 AM Few world stock markets escaped the Italian mood on Wednesday, then they all rose in unison toward the end of the week - though correlation is actually less strong now than a few years ago. That doesn't mean that markets will stop moving in lockstep, and one way to protect against contagion: utilities that aren't as vulnerable to dollar, inflation or interest risks. Comment! [Quick Ideas]
Thursday, August 18, 2011, 2:00 PM Volatile markets require defensive stocks, says Hilliard Lyons analyst David Burks. He favors electric utilities with strong dividend growth and market resiliency, and names SO, AEP, CMS and NEE as his favorites in the sector. 1 Comment [Quick Ideas]
Friday, July 22, 2011, 12:59 PM Shares of power transmission companies look set to move higher, says Baird policy analyst Christine Tezak. She cites cheaper natural gas prices and new government regs on dirty power generators as drivers, and says to "look at companies expanding the transmission component of the business." Her picks: AEP ITC. Comment! [Energy, Quick Ideas]

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iShares Dow Jones US Utilities ETF