The utilities sector was a bit of a safe haven for investors during January and February, and even though March has started off on a more bullish note, investors are still sticking with this sector.
It’s not hard to see why this trend is continuing. From Jan. 1 to March 4, the sector posted a 7% increase, which easily beats the S&P 500’s 2.1% decrease. Utilities is also the only sector that is ranked as a long-term hold in the Turner Analytics database.
So it probably isn’t a surprise to you that today’s recommendation is a utilities stock. I’ve been especially interested in gas utilities this week, and The Laclede Group (LG) is one that really stood out to me.
The Laclede Group engages in the purchase, retail distribution, sale and marketing of natural gas. The company is headquartered in St. Louis, Missouri, and it serves residential, commercial and industrial customers in Missouri and Alabama. It owns three natural gas utilities, and through them, it serves more than 1.56 million people each year.
The company’s Fundamental Score of 61 out of 100 is good, and its Technical Score of 73 out of 100 is very good. However, what really caught my eye was that the stock is currently trading near an all-time high, and it’s been increasing its share price for many months. In the last 12 months, its shares have climbed 18%, and 8.5% of that move was since the beginning of 2016.
LG reported fiscal first-quarter earnings on March 2, and had strong numbers overall. The company did fall short on analyst estimates for earnings, but the rest of the report was positive: Earnings stayed consistent with the previous year and the company is still on target to meet its net earnings for the year.
LG’s share price dropped on March 2 after the report, but by the afternoon of March 4, it recovered these losses and moved even higher.
Over the course of the next two months, I expect this stock to climb even higher and set a new all-time high. In the Turner Analytics database, LG has strong rankings for quarter-over-quarter and multi-year revenue growth, and when compared to other companies in its Industry, it’s ranked second overall. It’s also in a bullish trading zone, which should continue to drive share prices higher.
Needless to say, I recommend that you buy LG as soon as possible. You should enter the stock at $66 or better, and set your stop at $63.57. Our near-term target is $71.26.
Mike Turner and his team of software engineers developed Turner Analytics, a sophisticated software market and trade-timing system that provides unbiased, quantifiable recommendations on thousands of equities and rates, ranks and scores these equities from best to worst in an easy-to-use on-line tool for individual investors. He is also the editor of Signal Investor.
Most recently, Mike launched Quick Hit Trader. This trading service is based on weekly analysis of the 6,000+ stocks and ETFs in his proprietary Turner Analytics computer stock-rating system. Every Monday before the market open, Mike emails subscribers his three best trades for the week, including the buy, sell and target price.