|Bid||0.00 x 800|
|Ask||0.00 x 900|
|Day's Range||54.36 - 54.74|
|52 Week Range||47.37 - 56.90|
|PE Ratio (TTM)||8.96|
|Beta (3Y Monthly)||0.05|
|Expense Ratio (net)||0.14%|
Jason Ware, Albion Financial Group, and Chris Zaccarelli, Independent Advisor Alliance, discuss how investors should position their portfolios during volatile times.
According to its latest 13F filing, The Vanguard Group increased its stake in Entergy Corporation (ETR) close to 12% in the quarter ended September 30. The Vanguard Group held approximately 21.7 million shares of Entergy’s total outstanding shares at the end of Q3 2018.
The Vanguard Group, the largest institutional investor in FirstEnergy (FE), kept increasing its existing stake in FE during the quarter. According to its recent 13F filing, Vanguard Group added ~2.5 million shares of FirstEnergy in Q3 and held 11.5% of its total outstanding shares as of September 30. In the second quarter, Vanguard added 0.9 million shares of FirstEnergy.
As U.S. markets continue to wobble, investors who want to stay in the game can look to defensive sector-related ETFs for a more steady approach. “If the sell-off continues and it deepens, it’s going to ...
AES Corporation (AES), one of the smallest constituents of the Utilities ETF (XLU), has gained more than 40% so far this year. The Vanguard Group continued to add to its existing stake in AES in Q3. It bought net 4.7 million shares of AES in Q3 and raised its stake to 12.4% as of September 30. In the second quarter, The Vanguard Group bought net 6.8 million shares of AES.
Let’s take a look at the Utilities Select Sector SPDR ETF’s (XLU) institutional activity during the third quarter. Goldman Sachs, the biggest institutional investor in XLU, sold 16.9 million units of XLU during the third quarter. According to the recent 13F filing, Goldman Sachs held 10.8% of XLU’s total outstanding units as of September 30. At the end of the second quarter, Goldman Sachs held 22% of XLU’s total outstanding shares with more than 32.1 million shares.
The Vanguard Group held more than 7.6% of American Electric Power Company’s (AEP) total outstanding shares on September 30. It added net 580,000 shares in the third quarter, which took its holdings up to ~37.6 million shares. In the second quarter, Vanguard Group held 7.5% in AEP.
NextEra Energy (NEE), the biggest constituent of the Utilities ETF (XLU), is trading at a forward PE ratio of 22x based on its projected earnings for 2019. NextEra Energy’s five-year historical average PE ratio is close to 20x. NextEra Energy stock seems to be trading at a premium compared to its historical average valuation. The peer average forward PE ratio is lower than NextEra Energy’s forward PE ratio. NextEra Energy appears to be expensive compared to its peers. The stock has rallied more than 15% in 2018—one of the highest rallies among top utilities.
Recently, utility stocks (VPU) continued to trade strong. The Utilities Select Sector SPDR ETF (XLU), which represents the S&P 500 Utilities, is trading at $54.88—more than 2% and 6% above its 50-day and 200-day moving average levels, respectively. The premium to both of these support levels highlights the strength in XLU. The moving average levels around $53.76 and $51.74 could act as a support for XLU in the short term.
The Vanguard Group is the largest institutional investor in the Georgia-based Southern Company (SO), the second-largest regulated utility. It added more than 1.3 million shares and raised its stake in SO to 7.5% on September 30. At the end of the third quarter, it held ~77.5 million shares, compared to 76.1 million shares in the second quarter.
Could Gold Be the Best Bet amid Increased Economic Uncertainty? The Federal Reserve is predicting growth to slow to 2.5% next year before slowing down further to 2.0%. This data becomes even more disappointing given the fact that the investments should have ideally risen given the tax cuts implemented by the current administration.
In 2017, natural gas accounted for 32% of the US electricity generation by energy sources, based on the EIA data. In the previous part, we discussed the rise in natural gas usage in the electric power sector.
Utility stocks continued to trade strongly compared to broader markets last week. The Utilities Select Sector SPDR ETF (XLU) rose marginally, while broader markets fell 1.5% for the week ending November 16. So far in 2018, utilities have risen more than 5%, while the S&P 500 has risen ~2%.
The Vanguard Group was the largest institutional investor in the biggest US regulated utility, Duke Energy (DUK), at the end of Q3 2018. The Vanguard Group raised its stake by adding net ~1.5 million shares in the North Carolina–based utility. According to the latest filing, Vanguard held 54.4 million shares of DUK stock, which was a 7.6% stake in the utility at the end of Q3 2018.
NextEra Energy (NEE) has rallied the most among its peer stocks this year. The Vanguard Group is the largest institutional investor in the renewables titan. It added net ~0.8 million shares of NEE to its existing holdings in the third quarter. According to its latest filing, Vanguard Group held 41.2 million or 8.6% of NEE’s total outstanding shares on September 30. In the second quarter, Vanguard held 40.4 million total NEE shares.
Utilities at large are up almost 3% so far this year, marginally outperforming broader markets. Investors turned to the relatively safe utilities lately amid trade war tensions and a recent broad-market selloff. In this series, we’ll take a look at how institutional investors played utilities in the third quarter.
Utilities stocks and sector-related ETFs were among the better performers Friday as investors took a more optimistic view over the defensive sector in response to easing bankruptcy concerns from the recent California wildfires. On Friday, the Utilities Select Sector SPDR (XLU) gained 1.3%, Vanguard Utilities ETF (VPU) rose 1.2%, Fidelity MSCI Utilities Index ETF (FUTY) added 1.3%, iShares U.S. Utilities ETF (IDU) increased 1.1% and Reaves Utilities ETF (UTES) was 0.9% higher. “We’re tilted toward a negative near-term outcome and expect a slowdown,” Barry Bannister, head of institutional equity strategy at Stifel Nicolaus, told the Wall Street Journal, adding that they have increased exposure to sectors such as utilities, consumer staples and health care.
In this part, we’ll discuss the top utilities’ (XLU) target prices and analysts’ views. Top utility stock NextEra Energy (NEE) has an estimated upside of ~3% based on its median target price of $181.47 and its current price of $176.56. Morgan Stanley raised NextEra Energy’s target from $184.0 to $185.0 on November 9.
AES (AES), one of the smallest constituents of the Utilities ETF (XLU), is the top-rallied stock among its peers. So far, AES has risen more than 43% in 2018. Strong quarterly earnings growth influenced AES’s market performance in 2018. Currently, AES is trading close to its four-year high.
The technology sector and Apple in particular led a stock market sell-off Monday that saw the Nasdaq composite plunge nearly 3%.
Let’s take a look the biggest utilities’ total returns in 2018. So far, utilities at large have returned (including dividends) 7% in 2018, while broader markets have returned a little more than 5%. Utilities (XLU) generally offer higher dividend yields compared to broader markets.
Utilities (IDU) (VPU) at large have rallied more than 7% since the Fed delivered its third rate hike in 2018 in September. The Utilities Select Sector SPDR ETF (XLU) is trading at $54.87—more than 2% and 6% above its 50-day and 200-day moving average levels, respectively. The premium to the support levels indicates strength in XLU. These moving average levels close to $53.70 and $51.58 could act as a support for XLU going forward.
Utilities continued to trade strong and outperformed broader markets last week. The representative of the S&P 500 Utilities Index, the Utilities Select Sector SPDR ETF (XLU) rose 3.2%, while the S&P 500 gained more than 2% for the week ending November 9. Investors turned to relatively safer utilities amid broader market volatility. So far in 2018, utilities at large have risen more than 5%—marginally above broader markets.
Southern Company (SO), the fourth-biggest utility by market capitalization, released its third-quarter earnings on November 7. In the third quarter of 2017, Southern Company had an EPS of $1.12. Favorable weather and constructive regulatory results were some of the main drivers behind Southern Company’s earnings in the third quarter.