In April 2013, I left my job of 25 years as founding editor of Utility Forecaster to form my own publishing company and write the investment newsletter of my dreams: Conrad’s Utility Investor. The publication’s second birthday is as good a time as any to review where utility stocks have been and my outlook for where they’re headed.
Greece’s economic and political travails have garnered an outsized amount of media coverage for a country whose gross domestic product (GDP) accounts for about 1.4 percent of the US$18 trillion EU economy.
We’re in a bull market for armchair analysis of Greece’s fiscal and economic woes and the government’s efforts to negotiate with its fellow EU members. Here is the situation on the ground.
Reports circulated earlier this month that Florida-based TECO Energy had put itself up for sale, prompting the utility to confirm that the firm had engaged Morgan Stanley to “explore strategic alternatives.” This news triggered a record single-day gain in TECO Energy’s shares and provides yet another sign of accelerating mergers and acquisitions activity.
Recent downside in the Alerian MLP Index reflects a number of factors, including the group's outperformance relative to other energy stocks last year, the market’s growing concern about rising interest rates and worries that the slowdown in drilling activity will limit future growth opportunities.
The US dollar continues to reign supreme in the global currency markets, resulting in tough sledding for American investors who own Canadian stocks. But bargains abound for patient investors who don’t mind collecting generous dividends while they wait for the market to settle and improve.
Over the past month, Greece’s potential exit from the eurozone and the precipitous drop in the Shanghai Stock Exchange Composite Index have dominated the headlines. But neither event has affected our market outlook or the picks in our Wealth Builders Portfolio. We run down all the economic news that’s fit for profit.
With falling energy prices, volatile exchange rates and China’s slowing economy ratcheting up the uncertainty, second-quarter earnings season will provide critical insights into how our picks have held up in this challenging environment and what the future might hold.
Investors have sold utility stocks en masse, using concerns that rising interest rates will erode the value of future dividends as an excuse to take profits after last year’s rally. This is the pullback we’ve been waiting for, but there could be more downside in store. We highlight two high-quality names to buy now.
DISCLAIMER: Capitalist Times, LLC is a publisher of financial news and opinions and NOT a securities broker/dealer or an investment advisor. You are responsible for your own investment decisions. All information contained in our newsletters or on our website(s) should be independently verified with the companies mentioned, and readers should always conduct their own research and due diligence and consider obtaining professional advice before making any investment decision. As a condition to accessing Capitalist Times materials and websites, you agree to our Terms and Conditions of Use, available here including without limitation all disclaimers of warranties and limitations on liability contained therein. Owners, employees and writers may hold positions in the securities that are discussed in our newsletters or on our website.