|Bid||0.00 x 1800|
|Ask||0.00 x 38500|
|Day's Range||54.19 - 54.66|
|52 Week Range||47.37 - 57.23|
|PE Ratio (TTM)||8.95|
|Expense Ratio (net)||0.14%|
Should investors just ignore the noise and keep putting money in the markets? What to buy near record highs, with CNBC's Melissa Lee and the Fast Money traders, Brian Kelly, Karen Finerman, David Seaburg and Dan Nathan.
Currently, NextEra Energy (NEE), the top rallied stock among utility giants, is trading at an EV-to-EBITDA multiple of ~16x. That’s higher than its five-year average valuation. It’s trading at a PE multiple of 14x.
The Utilities Select Sector SPDR ETF (XLU), which is currently at $54.52, is trading 5% above its 50-day and 6% above its 200-day moving averages. The fair premium to both these support levels indicates strength in XLU. These moving averages of $52.04 and $51.45, respectively, are expected to act as a support for XLU in the near future.
Turkey troubles fueled a flight to safety among investors, which boosted utilities last week. The Utilities Select Sector SPDR ETF (XLU), a representative of the S&P 500 Utilities, rose 3%, and the broader markets rose 0.7% during the week. Trade war tensions have influenced the rally in utilities in the last few months. So far this year, the broader utilities have risen ~3%, underperforming the broader markets.
In the second quarter, the Vanguard Group was the largest institutional investor in the country’s biggest regulated utility, Duke Energy (DUK). The Vanguard Group raised its stake by ~0.8 million shares in the North Carolina–based utility, which was the second-largest utility by market cap. On June 30, it held 52.9 million shares of DUK stock, which was a 7.4% stake in the utility.
The Vanguard Group is the largest institutional investor in renewables titan NextEra Energy (NEE). It added net ~0.7 million shares of NEE to its existing holdings in the second quarter.
To help investors keep up with the markets, we present our ETF Scorecard. The Scorecard takes a step back and looks at how various asset classes across the globe are performing. The weekly performance is from last Thursday’s open to this week’s Wednesday close.
Stock indexes pared losses Wednesday after the day's broad losses left the market looking to a key indicator for signs on its future direction.
Southern Company (SO) stock corrected ~6% last week. Southern Company has a mean target price of $46.1—compared to its current market price of $46.1, which indicates flattish movement for the next year. Brokerages lowered Southern Company’s target price after its second-quarter earnings. Barclays cut Southern Company’s target price from $51 to $48 and lowered its rating from “overweight” to “equal weight.” J.P. Morgan lowered Southern Company’s target price from $46 to $45 on August 9. ...
On August 10, the Utilities Select Sector SPDR ETF (XLU) had an implied volatility of 12%—close to its 15-day average. The SPDR S&P 500’s implied volatility was close to 9%, which is near its 15-day average. The implied volatility shows investors’ anxiety. Higher volatility is usually related to a fall in a stock’s price.
Utilities are one of the most vulnerable sectors to rising interest rates. Utilities have been on a notable uptrend in the last few weeks. In fact, utilities (IDU) gained momentum after the Fed delivered a rate hike in June. Currently, the Utilities Select Sector SPDR ETF (XLU) is trading 3% above its 50-day and 200-day moving average levels. The premium against both of these support levels indicates strength in XLU. The moving average level around $51.5 will likely act as a support for XLU in the short term. XLU closed at $53.0 on August 10.
Last week, Jamie Dimon, JPMorgan Chase’s chairman and CEO, said that investors should be prepared to deal with ten-year Treasury yields reaching 5% or higher, according to CNBC. Currently, Dimon expects the yields at 4% due to the strengthening economy.
The Utilities Select Sector SPDR ETF (XLU), a representative of the S&P 500 utilities, fell 0.6% last week and underperformed broader markets. So far in 2018, utilities have largely traded soft and have only risen marginally. Broader markets have risen 6% year-to-date.
To help investors keep up with the markets, we present our ETF Scorecard. The Scorecard takes a step back and looks at how various asset classes across the globe are performing. The weekly performance is from last Friday’s open to this week’s Thursday close.
Southern Company (SO) stock tumbled 4.5% after the utility reported its second-quarter earnings on August 8. The utility reported EPS of -$0.15 for the second quarter compared to EPS of -$1.38 in the comparable quarter last year. After the earnings report, Southern Company stock lost all of its gains this year with a steep one-day fall.
According to the 14 analysts surveyed by Reuters that track PPL (PPL), two recommend “strong buy,” five recommend a “buy,” six recommend a “hold,” and one recommends a “sell” as of August 8.
PPL (PPL) stock has shown a decent uptrend in the last few weeks—particularly after the Fed’s second rate hike in June. Since then, PPL has risen more than 10%, while broader utilities (XLU) (IDU) have risen ~8%. Let’s see where PPL might go from here in the short term.
Southern Company (SO) reported its second-quarter financial results today. The company reported EPS of -$0.15 for the second quarter compared to its EPS of -$1.38 in the comparable quarter last year. Southern Company’s power plants continued to strain its financials in the quarter. Adjusted for these charges, Southern Company saw EPS of $0.80 in the second quarter compared to EPS of $0.73 in the second quarter of 2017, displaying a healthy YoY (year-over-year) rise of ~10%. SO opened on a weak note on August 8, and it fell ~4% during early trading.
PPL (PPL) stock is trading at a PE multiple of 13x—compared to its five-year historical valuation of 14x. Recently, PPL traded at an enterprise value-to-EBITDA multiple of 9.7x. The company’s five-year historical average is 11x. PPL stock appears to be trading at a discounted valuation compared to its historical multiples.
The consensus EPS estimate for the reported quarter was $0.54. In the United Kingdom, PPL’s Regulated segment’s adjusted EPS increased $0.05 mainly due to higher power prices, higher foreign exchange rates, and increased sales volumes. PPL’s total operating expenses increased to $1.19 billion for the reported quarter—an increase from $1.07 billion in the second quarter of 2017.
PPL (PPL) reported its second-quarter financial results on August 7. The company reported total revenues of $1.85 billion for the quarter ending on June 30—an increase of 7% YoY (year-over-year). Analysts expected revenues of $1.75 billion for the second quarter.