SO has a Beta of .28. If the Beta was 1, it would be in step with the S& P 500 index, if it was a Beta of 2 it would jump twice as high. If it was -1 , it would go down as much as the S & P goes up ( Detroit Edison did this. A Beta of .28 indicates that there is a disconnect between the S & P 500 index and SO share price.
Environmental and government regulations have hurt utilities earnings. Being forced to produce a certain % of power in expensive wind mills and solar power cells that will never pay for themselves instead of cheap coal and natural gas plants has driven PE ratios and thus stock prices down. Nothing is free and in this case the stock holder pays the price for a socialist government at work. The typical PE ratio of a utility stock that most investors are willing to pay for is about 13 when interest rates follow inflation rather than being kept low by government control. So if the FED lets interest rates go back to their norm, what does that tell you about most utility stocks prices currently and where they are still headed. They are not cheap now compared to 2009.
Agree. Shareholders and consumers (especially the poor) are
hurt by the true environmental extremism of this administation.
The damage caused by the under the radar environmental
zealots in the Obama White House and EPA is an under
reported story. This administation treats people in the energy
business (especially those involved with coal) like terrorists
to be eliminated not by guns but by regulation. Unfortunately
they are succeeding and we will all pay the price.
Its cause people are throwing caution to the wind to chase the hot stocks. I think this makes for a great buying opportunity. The market wont go up forever and there is bound to be a correction that will reverse this trend.
I'm not sure what to make of it. I know every sector has it's ups and downs but this is totally ridiculous when it comes to ute's. I own Edison and Southern and both are getting wiped out on a daily basis.