In light of August inflation numbers coming in hotter than expected, five utility stocks with high guru ownership and have outperformed the Standard & Poor’s 500 index over the past month are Constellation Energy Corp. (CEG, Financial), PG&E Corp. (PCG, Financial), NRG Energy Inc. (NRG, Financial), Southwest Gas Holdings Inc. (SWX, Financial) and The AES Corp. (AES, Financial).
Dow tumbles more than 1,200 points as August inflation numbers come in higher than expected
On Tuesday, the Dow Jones Industrial Average closed at 31,104.97, down 1,276.37 points from the previous close on the back of August inflation numbers coming in higher than expected.
The U.S. Bureau of Labor Statistics reported the consumer price index increased 0.1% during the month of August and 8.3% over the past year. Excluding food and energy costs, the core consumer price index surged 0.6% in August, higher than the 0.3% increase based on consensus estimates.
According to the Aggregated Statistics Chart, a Premium feature of GuruFocus, the mean day’s change of S&P 500 stocks was -2.8% with a median of -2.56%.
Utilities sector has high up-down ratio
While the mean one-month return of the S&P 500 is over -5%, the utilities sector had the highest up-down ratio among the market sectors with 12 stocks having a positive one-month return compared to 17 stocks with a negative return, an up-down ratio of 71%. Energy came in second with an up-down ratio of approximately 38%.
As such, investors can find opportunities in utility stocks with high guru ownership and have outperformed the S&P 500 by more than 10% over the past month. Compared to other market sectors, the utilities sector is not as sensitive to changes in the business cycle.
Constellation Energy
Eight gurus own shares of Constellation Energy (CEG, Financial) with a combined weight of 12.62%.
Shares of Constellation traded around $86.63 on Tuesday, showing the stock has outperformed the S&P 500 benchmark by approximately 13.53% over the past month.
The Baltimore-based clean energy solutions company has a GF Score of 23 out of 100 based on a profitability rank of 3 out of 10 and a financial strength rank of 5 out of 10. Despite this, the stock does not have enough data to compute a growth rank, a GF Value rank and a momentum rank and thus, the GF Score may give an incomplete picture of the stock’s potential.
Gurus with holdings in Constellation Energy include David Tepper (Trades, Portfolio)’s Appaloosa LP and Donald Smith & Co.
PG&E
Seven gurus own shares of PG&E Corp. (PCG, Financial) with a combined weight of 21.15%.
Shares of PG&E traded around $12.99, showing the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 2.28. Despite this, the stock has outperformed the benchmark index by approximately 7.63% over the past month.
The San Francisco-based company has a GF Score of 53 out of 100 based on a momentum rank of 6 out of 10, a profitability rank of 5 out of 10, a financial strength rank of 3 out of 10 and a rank of 1 out of 10 for growth and GF Value.
NRG Energy
Six gurus own shares of NRG Energy (NRG, Financial) with a combined weight of 3.55%.
Shares of NRG Energy traded around $43.80, showing the stock has outperformed the benchmark by approximately 5.11% over the past month.
The Princeton, New Jersey-based company has a GF Score of 81 out of 100 based on a momentum rank of 10 out of 10, a financial strength rank of 5 out of 10, a GF Value rank of 4 out of 10 and a rank of 7 out of 10 for profitability and growth.
Southwest Gas
Six gurus own shares of Southwest Gas (SWX, Financial) with a combined weight of 7.62%.
Shares of Southwest Gas traded around $81.30, showing the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 0.97.
The Las Vegas-based company has a GF Score of 75 out of 100 based on a GF Value rank of 6 out of 10, a rank of 7 out of 10 for profitability and growth and a rank of 3 out of 10 for momentum and financial strength.
AES
Five gurus own shares of AES (AES, Financial) with a combined weight of 0.19%.
Shares of AES traded around $26.83, showing the stock is modestly overvalued based on Tuesday’s price-to-GF Value ratio of 1.16.
The Arlington, Virginia-based company has a GF Score of 59 out of 100 based on a momentum rank of 9 out of 10, a profitability rank of 5 out of 10 and a rank of 3 out of 10 for financial strength and GF Value. Despite this, the stock does not have enough data to compute a growth rank and thus, the GF Score may give an incomplete picture of the company’s potential.
