Utility bulls: The stocks that charged up the US power sector



Utilities overpower

The week ended January 16, 2015, was a particularly good one for the power utility industry. The Utilities Select Sector SPDR (XLU) gained 2.6% in the week compared to negative returns of -1.2% for the SPDR S&P 500 ETF Trust (SPY). XLU outperformed SPY for the second week in a row.

SPY is an ETF tracking the S&P 500 (SPX) benchmark index. XLU is a key ETF in the power utility industry.

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Biggest gainer

Dynegy (DYN) was the biggest gainer for the week ended January 16, 2015. It closed the week at $31.39, generating a weekly gain of 6.1%.

The stock has been subject to many analyst upgrades recently. Last week, Barclays initiated coverage on Dynegy with an overweight rating. Barclays maintains a price target of $45 for the stock. This is more than 40% of Dynegy’s current market price.

Separately, Deutsche Bank maintained a “buy” recommendation on the stock and revised its price target from $40 to $44 per share.

Other gainers of the week

Apart from Dynegy, Public Service Enterprise Group (PEG) and First Energy (FE) were the top gainers in the US power sector last week. Public Service Enterprise Group was up 5.4% and First Energy gained 5.0% in the week ended January 16, 2015. The Wisconsin-based Alliant Energy (LNT) was up 4.4%.

Public Service Enterprise Group and First Energy ended the week with highest 52 week close for the stock. Alliant Energy, on the other hand, is currently in a multi-year bull run and trading near its lifetime highs.


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