Tuesday, June 10, 2008

A Look at the Utilities Sector (CEG; PEG; WMB;) And: US Electric Utilities Credit Quality Strong Despite Rising Costs

First, from Teresa Lo at InVivoAnalytics:

We noted strength in utilities in yesterday’s podcast, having detected it with our sector rotation charts. Utilities have been quietly outperforming the S&P 500 index.

There were three utility companies in Trading Ideas for Tuesday. Let’s look at WMB, PEG and CEG....Some interesting charts

And from Standard & Poor's via Research Recap:

Credit quality for U.S. electric utilities remains strong despite rising fuel and construction costs, according to Standard & Poor’s.

Capital expenditure budgets are ratcheting upward, buffeted by double-digit increases in construction material costs and a tight labor market, S&P says in its latest Industry Report Card. “Additional cost pressure from rising fuel costs is a growing credit concern. To date, regulatory decisions have been supportive of the commodity pass-through via adjustments mechanisms. Still, the potential for regulatory fatigue is heightened as costs show no signs of abating in the near term and longer-term environmental compliance recovery will likely pressure customer rates.”>>>MORE