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Are Institutional Investors Bullish on Southern Company?

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Nov. 20 2020, Updated 3:57 p.m. ET

Southern Company

The Vanguard Group is the largest institutional investor in Georgia-based Southern Company (SO), second-largest regulated utility. The firm added more than 1.5 million shares and raised its stake in SO to 7.5% on June 30. At the end of the second quarter, it held 76.1 million shares compared to 74.6 million shares in the first quarter.

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Noteworthy activities from institutions 

Almost all of the top institutional investors increased their stake in Southern Company in the second quarter. T. Rowe Price added net 5.3 million shares of the utility in the second quarter and increased its stake to 3.5%. 

BlackRock Institutional Trust was among the top sellers in SO in this period. BlackRock sold net ~1.4 million shares. At the end of the second quarter, it held 4.6% of Southern Company’s total outstanding shares.

Goldman Sachs was among the top buyers of SO in the second quarter. It bought 4.3 million shares during the quarter and held almost 1.0% in the utility on June 30.

SO’s power plant woes

Southern Company’s (SO) power plant woes continued to dent its financials. SO’s earnings in the second quarter included an estimated loss of ~$1.1 billion related to increased project costs at its Plant Vogtle. Plant Vogtle has faced several cost overruns and delays in the last few years. The total project cost has reached ~$27.0 billion, more than double what was originally estimated a decade ago. 

Although Southern Company offers one of the best yields among utilities (XLU)(VPU) at large, these power plant issues have dominated its market performance.

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