Are Energy and Utility stocks oversold?

Feb 15th, 2018 5:05 pm

#1

joepipe [OP]: Deal Addict; Jul 3, 2007; 4132 posts; 4606 upvotes; Toronto

Feb 15th, 2018 5:05 pm

Are Energy and Utility stocks oversold?

Quite the price corrections on some big names like BCE , ENB, ALA , IPL and Telus from their highs. I own these along with some ZWU ETF.

I understand the rate sensitivity thing but the latest selling seems overdone. Does anyone see a rebound in these sectors and names associated with them anytime soon?

Im considering buying more on this latest dip but also wondering if I should wait a bit on the next BOC Rate decision .

Feb 15th, 2018 5:41 pm

#2

SellPuts: Newbie; Feb 9, 2016; 46 posts; 25 upvotes

Feb 15th, 2018 5:41 pm

No point waiting for the BOC rate decision. One cannot predict how that will affect the market. These sectors are pretty cheap, so it's a good time to buy or keep holding.

BCE: I dont like the guidance for 2018
ENB: Earnings/conference call coming out tomorrow. will be interesting to see what happens.
IPL: Good results cheap stock
Telus: Better than BCE

Feb 15th, 2018 7:46 pm

#3

craftsman: Deal Expert; Jan 27, 2006; 21514 posts; 15095 upvotes; Vancouver, BC

Feb 15th, 2018 7:46 pm

I agree that the sector is cheap. Unfortunately, I believe it will get cheaper before it gets better as it really doesn't matter what they report as long as investors believe in the current interest rate trend - upwards - especially with news coming out of the US that 10 year government bonds are moving closer to 3%.

I would keep my powder dry (or invest in growth areas that work in a rising interest rate environment) until the rate talk starts to calm down and even rates start to level off. Once that happens, these types of stocks should be dirt cheap and it's worth doing a massive sector rotation out of those growth stocks and into good solid dividend growers like these.

Feb 16th, 2018 12:36 am

#4

llpresident: Deal Addict; Dec 3, 2014; 2348 posts; 1840 upvotes; Ontario

Feb 16th, 2018 12:36 am

I’m investing for long term so I am SLOWLY adding to these sorts of stocks.

I own BCE and ENB from your list. I added to ENB this week. I am not that tempted on BCE yet but it’s geyting close to an add point for me.

I do agree with the other posters that these stocks are probably not going to rebound significantly anytime soon and may very well keep going lower.

Feb 16th, 2018 1:49 am

#5

Arrgh: Deal Fanatic; Feb 15, 2006; 9162 posts; 3838 upvotes; Toronto

Feb 16th, 2018 1:49 am

Short term, who knows?

Long term, they are at attractive valuation. I added some lately myself.

Feb 16th, 2018 7:24 am

#6

Ismellofhockey: Newbie; Jun 28, 2017; 85 posts; 29 upvotes

Feb 16th, 2018 7:24 am

ENB's Q4 earnings just beat estimates. Expect a 5-10% drop

+1

Feb 16th, 2018 8:29 am

#7

Gabriella: Sr. Member; Mar 8, 2004; 746 posts; 276 upvotes

Feb 16th, 2018 8:29 am

Ismellofhockey wrote: ↑ ENB's Q4 earnings just beat estimates. Expect a 5-10% drop

Strong quarterly results combined with yesterday’s announcement on divesting of non core assets, looks like a promising story.

+1

Feb 16th, 2018 8:43 am

#8

Chance7652: Deal Addict; Feb 26, 2017; 2751 posts; 4155 upvotes

Feb 16th, 2018 8:43 am

Not that pre market bids means much, but it currently looks like Enb, enf, IPL and key will all open higher today after their earnings.

Feb 16th, 2018 9:04 am

#9

treva84: Deal Fanatic; Nov 9, 2013; 5486 posts; 6705 upvotes; Edmonton, AB

Feb 16th, 2018 9:04 am

Ismellofhockey wrote: ↑ ENB's Q4 earnings just beat estimates. Expect a 5-10% drop

I hope it drops, or at least stays flat. If you look at their Q4 report their cash flow per share is starting to increase, after taking a hit with all the Spectra charges earlier this year and accounting for the massive dilution. I think this signals the worst of the integration is behind the company. The yield is high and sustainable and as long as cash flow grows dividends will grow too.

The longer the share price is suppressed the better it will work out for buy / hold / DRIP investors.

Buy quality. Keep calm and go long

Feb 16th, 2018 11:55 am

#10

cn_habs: Deal Fanatic; Jun 3, 2009; 5675 posts; 1532 upvotes; Montreal

Feb 16th, 2018 11:55 am

Utilities have bounced back lately but it's hard to see if this is a dead cat bounce.

Feb 16th, 2018 12:00 pm

#11

charliebrown: Deal Fanatic; Dec 21, 2005; 5845 posts; 1604 upvotes; London, ON

Feb 16th, 2018 12:00 pm

Chance7652 wrote: ↑ Not that pre market bids means much, but it currently looks like Enb, enf, IPL and key will all open higher today after their earnings.

IPL could not hold onto its gains...guess market still doesn't like their capex plans re: PDH plant

💡😃😂😄

Feb 16th, 2018 12:06 pm

#12

Chance7652: Deal Addict; Feb 26, 2017; 2751 posts; 4155 upvotes

Feb 16th, 2018 12:06 pm

charliebrown wrote: ↑ IPL could not hold onto its gains...guess market still doesn't like their capex plans re: PDH plant

62% payout with good FFO growth. The price on IPL very rarely makes sense to me.

I'll take the bump on KEY, ENB and ENF though.

Feb 16th, 2018 12:57 pm

#13

TorLeafsFan: Jr. Member; Mar 26, 2017; 115 posts; 114 upvotes

Feb 16th, 2018 12:57 pm

Late to the game but bought into ENB and FTS. Just wanted to say as a noob to the stock market, these forums are very helpful.

+1

Feb 16th, 2018 1:05 pm

#14

lawonga: Sr. Member; Nov 25, 2009; 745 posts; 430 upvotes; Vancouver

Feb 16th, 2018 1:05 pm

Interested in shaw and ENF/ENB. hmmmm

Feb 16th, 2018 1:21 pm

#15

craftsman: Deal Expert; Jan 27, 2006; 21514 posts; 15095 upvotes; Vancouver, BC

Feb 16th, 2018 1:21 pm

ENB can't by a break these days.... But like I said above, the market doesn't care what it does right now especially with increase yields in US 10 yr bonds and more hikes planned. To make matters worse, the big growth stocks also rebounded so the idea of putting money into utilities is way down many investor's list.

Don't get me wrong - I own ENB so I'm not happy with it's performance but these things happen in a diversified portfolio. I just wouldn't buy any more for the next few months to a year until the interest rate and bond yield story is a lot clearer.

Feb 16th, 2018 2:22 pm

#16

notenoughsleep: Deal Fanatic; May 22, 2003; 9057 posts; 6034 upvotes; Vancouver

Feb 16th, 2018 2:22 pm

I hold BCE, ENB, T, and FTS. Share price drop sucks, but allows DRIP to accumulate faster! As long as they keep up with dividend growth, we'll be laughing 30 years from now when we're retired!

+2

Feb 16th, 2018 4:09 pm

#17

craftsman: Deal Expert; Jan 27, 2006; 21514 posts; 15095 upvotes; Vancouver, BC

Feb 16th, 2018 4:09 pm

Jermyzy wrote: ↑ I hold BCE, ENB, T, and FTS. Share price drop sucks, but allows DRIP to accumulate faster! As long as they keep up with dividend growth, we'll be laughing 30 years from now when we're retired!

Yes. But if you hold off for just a few quarters, I'll bet you can get in on a lower entry point especially after how investors reacted to ENB's good quarter.

Feb 18th, 2018 6:26 am

#18

Bullseye: Deal Fanatic; Feb 1, 2006; 9642 posts; 906 upvotes; Muskoka

Feb 18th, 2018 6:26 am

Added 100 FTS to existing holdings of it on Friday open before 3% bounce. I have owned it for 10+ years and no plans to sell. Happy to finally see some things worth buying. Might add more EMA as well.

Feb 19th, 2018 2:47 pm

#19

Ismellofhockey: Newbie; Jun 28, 2017; 85 posts; 29 upvotes

Feb 19th, 2018 2:47 pm

Gabriella wrote: ↑ Strong quarterly results combined with yesterday’s announcement on divesting of non core assets, looks like a promising story.

And yet...

Are Energy and Utility stocks oversold?

Are Energy and Utility stocks oversold?

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