Gordon believes there’s a good macro-economic backdrop for the utilities sector. That's because interest rates are relatively low and about half the market cap of the utility index is correlated to interest rates (when interest rates are low valuations are high because utilities are yield oriented stocks).
Gordon says Citigroup is investing heavily in infrastructure and growth--both in new transmission and distribution. They also like a new wave of coal and nuclear power plants coming online between 2010 and 2020.
Gordon likes… Wisconsin Energy and Sierra Pacific Resources and calls them big regulated infrastructure growth stories.
He also likes CMS Energy, PPL , and Constellation Energy . Gordon says they're big coal generators and nuclear generators that are benefiting from pricing power
Liz Claman also asked if nuclear energy the next big thing. Gordon says he thinks by 2015 we will see one or two new nuclear plants in this country - and many more after that.
Analyst disclosure: Citigroup currently has or had within the past 12 months CMS, CEG, PPL, SRP and WEC as clients and the services provided were non-investment banking, securities related and non-securities related.