“But when things started to get better in the overall market, people looked for sector rotation to take advantage of better upside and more economically leveraged sectors became a source for funds, and that’s natural because utilities are traditionally defensive.”
In the next month, Gordon said he expects investors to park some of their cash in the sector before putting on more risk in January.
“So I wouldn’t be surprised to see some of the larger-cap names perform better into the end of the year,” he said. “But names we like as long-term investments are names that exhibit some relative growth.”
Meanwhile, Edmonds said as the weather turns colder, both oil and natural gas will perform well and stocks will follow suit.
“The wildcard is the economy,” said Edmonds. “That’s the biggest risk: some macro shift that shows another leg downward both domestically and globally. But absent that, I think energy stands to remain a strong performer.”
In particular, Edmonds favors stocks in the exploration and productionspace.
Duke Energy —"They’re trading at very high valuation," he said of the firm. "We don’t see much earnings growth there."
Scorecard—What They Said:
- Edmonds' Previous Appearance on CNBC (Jul. 28, 2010)
- Gordon's Previous Appearance on CNBC (Oct. 5, 2010)
More Energy Market Analysis:
CNBC Data Pages:
Edmonds does not own shares of QEP, WLL or NBL, but owns shares of CRZO.
Gordon has investment banking clients who own shares of DUK, PNW, SRE and PEG. And within the last 12 months, Morgan Stanley has received compensation for products and services other than investment banking from Duke Energy.
Gordon does not own shares of NVE.