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iShares U.S. Utilities ETF (IDU)

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  • Mar. 4, 2014, 5:06 AM
    • The WSJ profiles how the U.S. electricity grid is vulnerable to attacks on its transformers, which are the "glue" that holds the network together.
    • Few companies make transformers in the U.S., and the equipment can take over a year to produce and months to ship.
    • An assault on enough of the country's biggest 2,000 transformers could cause extended blackouts. Last year, a gun attack on 17 large PG&E Corp transformers took a California substation off line.
    • "With a couple dollar bullets, you can take out a transformer worth millions of dollars," said Steve Newman, vice president of Delta Star, a supplier of the products.
    • Utility ETFs: ETFs: XLU, IDU, VPU, NLR, GRID, NUCL, RYU, UPW, PUI, FXU, SDP, FUTY, PSCU, UTLT
    | 2 Comments
  • Mar. 2, 2014, 3:27 AM
    • Yet another winter storm is causing further misery for travellers, including airline passengers.
    • The storm is expected to hit the East Coast after making its way across the Midwest and parts of the south, dropping freezing rain, sleet or snow.
    • Public Service Enterprise Group (PEG) has arranged for tree trimmers and other contractors to add to its own repair crews to try to keep electricity disruption to a minimum.
    • Over 470 flights have been cancelled for today and another 120 have been delayed.
    • Related airline stocks: AAL, JBLU, DAL, UAL, LUV, ALK, HA, SAVE, RJET
    • Utility ETFs: XLU, IDU, VPU, RYU, UPW, PUI, FXU, SDP, AMPS, FUTY, PSCU, UTLT
    | 17 Comments
  • Feb. 21, 2014, 3:17 PM
    • The Select SPDR Utilities ETF (XLU +0.4%) has already had a nice run this year - up 9% from an early January low - but technician Michael Kahn sees more gains ahead, noting it popped out of an 8-month trading range last week  and money is flowing in (based on a gauge measuring volume on up days vs. down days) for the first time in nearly a year.
    • Stocks such as Public Service Enterprise (PEG +0.5%) and CMS Energy (CMS -0.1%) are mirroring the ETF's chart, but Kahn sees better opportunities in names closer to 52-week lows. Of note in this category are PG&E (PCG +0.9%) - just out of a trading range and above its 200-day moving average for the first time since the summer - and Southern Co. (SO +0.1%). After moving sideways for six months, Southern has rallied to the top of its range and is pausing at its 200-day moving average. Any continued strength would break both the trading range and the 200-day.
    • Related ETFs: XLU, IDU, VPU, NLR, GRID, JXI, NUCL, DBU, IPU, UPW, RYU, PUI, FXU, SDP, FUTY, PSCU, AXUT, UTLT
    | 5 Comments
  • Feb. 13, 2014, 7:35 AM
    • Janet Yellen's appearance before the Senate Banking Commitee, which was scheduled to take place today, has been postponed, due to a heavy snow storm that's hitting the south and the east. A new date for Yellen's testimony wasn't provided.
    • The latest weather patterns have already caused over half a million customers to lose power in the southeast.
    • Around 6,900 flights were canceled or delayed yesterday and another 4,500 have been scrubbed for today.
    • Related stocks: AAL, JBLU, DAL, UAL, LUV, ALK, HA, SAVE, RJET, [[GPE-A]]
    • Utility ETFs: XLU, IDU, VPU, RYU, UPW, PUI, FXU, SDP, AMPS, FUTY, PSCU, UTLT
    | Comment!
  • Feb. 4, 2014, 9:28 AM
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  • Jan. 31, 2014, 4:33 PM
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  • Jan. 8, 2014, 10:34 AM
    • "The Safety Bubble Deflates," goes the title of a new report from Bernstein's Seth Masters, adding his name to those voices suggesting "safe" assets have become otherwise.
    • Even though utilities, telecom, and consumer staples have underperformed of late, says Masters, their relative valuations are still well above the average over the last 50 years. "In periods of stress, investors tend to prize stability and safety too much. But in time, investors discover that every investment carries with it some degree of risk: if not risk of loss, then risk of inadequate growth."
    • Related ETFs: XLU, IDU, VPU, NLR, GRID, JXI, NUCL, DBU, IPU, RYU, PUI, UPW, FXU, SDP, PSCU, AXUT, FUTY, UTLT, XLP, VDC, FXG, RHS, FSTA, PSL, PSCC, IYZ, VOX, IXP, IST, XTL, LTL, FCOM, TLL, AXTE
    • Barron's Jack Hough says the "low beta" approach is a flawed one: First, volatility can change quickly as companies' or industries' fortunes shift; Second, beta tells one nothing about whether a stock's valuation is high or low. In a similar warning over low volatility stocks, BAML suggests looking for companies with smooth earnings rather than smooth stock prices. Screening for such, Hough finds CSX Corp (CSX -0.6%), DuPont (DD +0.6%), Cisco (CSCO -0.6%), and Halliburton (HAL -0.8%).
    • Low volatility ETFs: SPLV, USMV, ACWV
    | 7 Comments
  • Jan. 8, 2014, 9:54 AM
    • 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.
    | Comment!
  • Jan. 7, 2014, 4:27 AM
    • The freezing weather has caused spot prices for natural gas on the East Coast to soar to record highs, with gas at a trading hub in New Jersey surging to as high as $90 per million British thermal units yesterday from just $13.61/mmBtu on Friday. That compares with usual peaks of $40-50 when the temperatures get cold.
    • At two other hubs, prices hit $95/mmBtu.
    • Utilities are absorbing the costs at the moment, although they could pass the prices on to customers later in the year.
    • ETFs: UNG, UGAZ, GAZ, BOIL, DGAZ, UNL, KOLD, NAGS, GASZ, DCNG, XLU, IDU, FCG, VPU, GASL, GASX, RYU, PUI, UPW, SDP, FXU, PSCU, FUTY, UTLT
    | 9 Comments
  • Jan. 3, 2014, 3:54 PM
    • Another example of the negative sentiment toward utilities: The cost of hedging against losses in utility shares has risen to a five-year high, Bloomberg reports, as implied volatility has risen nearly 9% to 14.19 in the past month for the Utilities Select Sector SPDR Fund (XLU).
    • Investors have increased bearish bets on utilities, sending the number of shares sold short to 14.9M, a fourfold increase in two months; almost 13% of the outstanding stock has been borrowed to wager on declines, the most since Sept. 2009.
    • Utilities are sensitive to interest rates because the group competes with bonds for investors seeking stable returns, investment officer Scott Armiger says, still liking XLU since “all you need is one market correction and [the negative sentiment] can change in a heartbeat."
    • Other ETFs: IDU, VPU, RYU, PUI, UPW, SDP, FXU, PSCU, FUTY, UTLT
    | Comment!
  • Jan. 3, 2014, 7:57 AM
    | 1 Comment
  • Dec. 23, 2013, 12:43 PM
    • iShares U.S. Utilities ETF (IDU) announces quarterly distribution of $0.8155.
    • 30-Day SEC yield of 3.43% (as on 11/29/2013).
    • For shareholders of record Dec 26. Payable Dec 30. Ex-div date Dec 23.
    | Comment!
  • Dec. 23, 2013, 10:47 AM
    • "Subsidies and falling technology costs are making distributed solar power cost-competitive [and] as more people switch to solar, utilities sell less electricity to those customers [causing the] utilities [to] spread their high fixed costs ... over fewer kilowatt-hours, making solar power even more competitive and pushing more people to adopt it," WSJ's Liam Denning notes, describing what is dubbed "the death-spiral thesis" for traditional utilities.
    • Denning says it's the merchant generators (like NRG) that have the most to worry about: "For regulated utilities, the idea that solar panels will enable everyone to leave the grid, making such networks redundant, is overstated."
    • Although the threat may seem distant for now, Denning says it's worth taking seriously if you're an investor. "The gyres may look exceedingly wide, but that spiral is taking shape," he says.
    • Some individual names: Southern Company (SO), Edison International (EIX), Duke Energy (DUK -0.1%), FirstEnergy (FE -0.7%), XCel Energy (XEL +0.2%), American Electric Power (AEP -0.2%), Dominion (D -0.2%), Exelon (EXC +0.5%).
    • ETFs: XLU, IDU, VPU, RYU, PUI, UPW, FXU, SDP, PSCU, FUTY, UTLT
    | 48 Comments
  • Dec. 10, 2013, 6:50 PM
    • Supreme Court justices today expressed sympathy for the EPA’s approach to air pollution that crosses state lines.
    • The rule that would curb emissions from coal-fired power plants in 28 states - struck down by the D.C. Circuit Court of Appeals and being tested by power companies, states and miners - has never taken effect, but it would force companies to either shutter old plants or invest billions of dollars in pollution-control technology.
    • The court’s four Democrat appointees, at times joined by Chief Justice Roberts and Justice Kennedy, suggested the EPA had adhered to the language of the Clean Air Act; only Justice Scalia seemed convinced the rule could be unfair to some states.
    • ETFs: KOL, XLU, IDU, VPU, RYU, PUI, UPW, FXU, SDP, PSCU, FUTY, UTLT.
    • Coal names: PCXCQ, BTU, WLT, CNX, ACI, ANR, JRCC, YZC, ARLP, AHGP, NRP, PVR, PVG, PVA, OXF, CLD, WLB, RNO.
    | 19 Comments
  • Nov. 21, 2013, 8:50 AM
    • Multiple expansion was behind stock gains this year, but next year it'll have to be earnings and money flow rather than further valuation re-rating, says Goldman's David Kostin, reiterating his cautious 1,900 end-of-2014 target for the S&P 500 (SPY).
    • Margins are key, and Goldman's forecast is the "greatest investable gap relative to consensus expectations.” The bank expects 8.9% in 2014 and 9% in 2015 vs. the Street at 9.5% and 10.1%, respectively. Every 50 basis point swing in margins translates into a swing of about $5 per share in EPS.
    • Four recommended strategies: Pick growth (IWF) over value (IWD), firms investing in capex, companies with high buyback yields (seems contradictory with previous), and stocks with high operating leverage.
    • As for sectors, Goldman is favoring IT (VGT), consumer discretionary (XLY), and industrials (XLI) vs. underweighting consumer staples (XLP), utilities (XLU, IDU), and telecom (IST).
    • S&P 500 ETFs: SPY, SH, SSO, SDS, IVV, SPXU, UPRO, VOO, RSP, RWL, EPS, BXUB, TRND, SFLA, BXUC, BXDB
    | 1 Comment
  • Oct. 20, 2013, 8:56 PM
    • It's no surprise fixed income is a hated asset class, but how much so? Just 4% of respondent's in Barron's Big Money poll of money managers are bullish on the sector, with 85% bearish. By contrast, 79% have a positive view of equities vs. 7% negative.
    • Not surprising given negative feelings about the bond market, the utility sector garners the most votes (32%) for being the worst expected performer over the next year. Taking first place for the sector expected to perform best is - what else - tech.
    • WIth 91% of managers in agreement, Sears (SHLD) tops the list of most-hated stocks. Next at 87% is Tesla (TSLA). After that with 80% Is Herbalife (HLF), followed closely by ZIllow (Z) and Netflix (NFLX).
    • Apple (AAPL) and Berkshire Hathaway (BRK.A, BRK.B) top the list of most-loved stocks with 70%, followed by Citibank (C) at 60%.
    • Broad fixed-income ETFs: AGG, BND, LAG, SCHZ, BOND, SAGG, MINC.
    • Broad equity exposure ETFs: IYY, VTI, EXT, TOTS, EUSA, ITOT.
    • Utility ETFs: IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
    | 14 Comments
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IDU Description
The iShares Dow Jones U.S. Utilities Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of U.S. utilities stocks, as represented by the Dow Jones U.S. Utilities Index.
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Sector: Utilities
Country: United States
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