Here are some facts.
1. Utilities are now trading at absurd PE, p/s, p/b ratios, relative to their historical norms. Look at EIX and SRE for proof. Since when do utes trade 22x earnings?
2. Utilities do fantastic in bear markets. It’s not unusual to see them up 15% in a single month when the market gets routed.
3. Electric utilities are now +10% for the year, some are up a lot more than that.
This is an unsustainable trend. The old man sector isn’t richly valued yet. There is still room for expansion there, but not too much. I realize my holding period for the old man space is limited. But what else is there to buy? Surely, you cannot expect me to jump back into the fire-pot and vote at the annual FEYE shareholder meeting, do you? I don’t have the appetite for money losing tech anymore. However, the healthcare industry is interesting: highly profitable, favorable demographics, lenient FDA. Stocks like GILD are sure to outperform, at least that’s what I am told.
Here’s an interesting question, in which I will answer. Which profitable, liquid, large cap stocks are down more than 10% over the past three months, with FPEs under 25, that might be worth looking at?
Here is my short list. Feel free to let me know which one’s you favor, or not. Either option is entirely acceptable courses of action for me.
YNDX
ADS
NTAP
HMC
SMFG
LULU
ESRX
AKAM
BAC
YHOO
JAZZ
REGN
AMGN
QIHU
At some point in this cycle of ours, the above stocks might begin to be attractive to the ute crowd, the guys with burlap underwear and velcro hoodies. Simply buying electric utilities here is not-so-much-different from roasting large bundles of cash over a flaming barrels of garbage.
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Burlap underwear? Yikes. I say $YHOO just because of the Alibaba IPO and $YNDX because Putin will eventually own Ukraine and things will settle down.
CNBC is becoming more and more useless.
Yesterday I saw through the manipulative way CNBC tries to push through it’s far leftist agenda and was shocked. Brian Sullivan appeared on extreme leftist MSNBC – a network that features such intellectual luminaries as Al Sharpton. They were SUPPOSED to discuss the Benghazi hearings being led by Rep. Trey Gowdy, but instead they used the old tired tactic of ignoring the the hearing and instead allowed Sullivan to go on a rant about ‘Republicans’. Never mind that Ambassador Stevens was tortured, repeatedly raped,murderered; that three heroic rescuing soldiers were left to die AND it was falsely blamed on a video AND the person who made the video was arrested and imprisoned AND the media went along with the coverup. Now CNBC decided only to discuss the ‘rant’ and leave out the real news (as usual). We were led to believe that Brian’s rant was spontaneous, when it clearly was not but apparently CNBC thinks we are all MORONS.
Hey guess what CNBC, not everyone who watches your crappy network has an I.Q. below 80 and we ARE hip to your leftist agenda – and I for one am NOT fooled.
Sully is a hack
ARGH, +1, +1 and +1 for the points made.
I am very left leaning and I must say that MSNBC is probably the worst “news” network ever. It’s like they copied Fox News’ victim mentality and yelling but forgot to actually cover news or be entertaining. TeeVee is all about entertainment, as it caters to the unwashed masses.
If I had to pick from the list, I’d go with ESRX. I haven’t observed any mention of the ferrous sorts. No interest there?
Hey Unc what’s up? I’d hold off on ESRX until that first 5 minute candle gets over come. If it doesn’t there may be more where that came from.
Good morning grandpa. Cracking me w/ 5min candlesticks?? Lol!! I was judging w/ a 5yr chart. Not sure about the very near term, but would bail if that May $66 was breached….
UncleBuccs, wasn’t breaking your balls, just looking out for ya Buddy. Better entry below this mornings open was all I was shouting. Good company, great concept. Love it long term.
thanks granpa. maybe you really are a granpa after all… 😉
There are a few deals in the ute space, for example HE is trading at reasonable ratios. Furthermore they focus on 21st century energy technology. 5% divvy.
I would love to see an ESRX partner with RAD or WAG. Bundle to two together and be able to compete on the PBM level the way CVS/Caremark did. RAD is cheap at 8 Billion and makes more sense to me.
Mck is a beast
MCK on the distribution end. CVS has recently began working closely (opening up their ordering practices) with CAH in a mutual business venture to help improve profitability for both companies. PBM –> Retail –> Distribution. They are slowly controlling the entire assembly line.
Would not be surprised if the home builder bought the lumber yard. -Analogy
“Surely, you cannot expect me to jump back into the fire-pot and vote at the annual FEYE shareholder meeting, do you?”
– Actually, I do. And not only voting but also giving a speech “Greed is good”. Would have been awesome to see on YouTube later.
As for the pick–YNDX which could become a bigger fish in a small (and protected) pond.
JAZZ is starting to look pretty cheap. It might be a case of baby getting thrown out with the biotech bath water.
love ADS. Nice recurring rev business model in the main business with the Epsilon business killing it.
CRTO…ringing a bell but few are listening.
Who needs stocks when you have leveraged bonds products 😉
I use bloomberg and bloomberg tv ( and some reuters )
My huge bet on platinum worked like a charm… sometimes all you need is some luck, no skill. $PPLT