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Fast Money HomeFast Money Rapid RecapAbout Fast MoneyFast Money BiosFast Money Web ExtraFast Money Disclaimer
Text Size
Jun.26
6:06 PM ET
Friday, 26 Jun 2009
Prop Desk: Boring Utilities Get Exciting

Entry Point
If you think utilities are old and boring, think again. This sector could be hot to trot!

Earlier in the month, a Goldman Sach sparked new interest in the space when one of their analysts suggested that regulated utilities are becoming a good investment opportunity.

Specifically, analyst Michael Lapides said he was becoming "incrementally more positive given valuation levels, the interest rate environment, and relative underperformance versus the S&P 500."



Since Lapides wrote that note shares of the Utilities SPDR [XLU  Loading...      ()   ] have climbed about 8% with Exelon [EXC  Loading...      ()   ], FPL Group [FPL  Loading...      ()   ] and Duke Energy [DUK  Loading...      ()   ] among the top holdings. Just take a look at the chart!

(XLU)
Loading...       (%)

If this boring class of stocks is starting to get interesting, how should you trade it?

I like both Southern [SO  Loading...      ()   ] and Duke [DUK  Loading...      ()   ], muses Pete Najarian. Or take a look at TECO [TE  Loading...      ()   ]. This is a great area for anyone looking for dividend yield.

PG&E [PCG  Loading...      ()   ] is my favorite name in the space, adds Guy Adami. At 11 times forward earnings and a 4.5% dividend it's attractive.

Why not game it with the XLU, adds Tim Seymour. That gives you broad exposure to almost all the names mentioned above.

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Trader disclosure: On June 26th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Seymour Owns (AAPL), (BAC), (EEM), (FXI), (NOK), (TSO), (TUR); Seygem Asset Management Is Short (RSX); Adami Owns (AGU), (C), (GS), (MSFT), (INTC), (NUE), (BTU); Najarian Owns (GS) Call Spreads; Najarian Owns (JPM) And Is Short (JPM) Calls; Najarian Owns (PALM) Call Spread; Najarian Owns (S) Calls; Najarian Owns (WFC) Put Spread; Najarian Owns (YHOO) Call Spread; Najarian Owns (ESI) Call Spread; Terranova Owns (TER), (XBI), (BTU), (ABT), (RIMM), (HES), (MS),(MSFT)

Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE); Virtus Diversifier PHOLIO Owns (DBC); Virtus Diversifier PHOLIO Owns (DBV); Virtus Investment Partners Owns More Than 1% Of  (ABD); Virtus Investment Partners Owns More Than 1% Of (CAL)\; Virtus Investment Partners Owns More Than 1% Of  (CLB); Virtus Investment Partners Owns More Than 1% Of  (DLR); Virtus Investment Partners Owns More Than 1% Of  (EPR); Virtus Investment Partners Owns More Than 1% Of  (EXR); Virtus Investment Partners Owns More Than 1% Of  (IGE); Virtus Investment Partners Owns More Than 1% Of (MEE); Virtus Investment Partners Owns More Than 1% Of  (DBC); Virtus Investment Partners Owns More Than 1% Of  (DBV); Virtus Investment Partners Owns More Than 1% Of  (DBA); Virtus Investment Partners Owns More Than 1% Of  (SKT); Virtus Investment Partners Owns More Than 1% Of  (UA); Virtus Investment Partners Owns More Than 1% Of  (WBMD); Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co; Virtus Investment Partners Owns More Than 1% Of  Seagate Tax Refund Rights

Charles Schwab Is A Sponsor Of "Fast Money"

© 2009 CNBC

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