Roger S. Conrad

Since the November issue of Conrad’s Utility Investor went to post, five more portfolio companies have reported calendar third quarter 2013 results. Here are the highlights.

We upgrade Linn Energy to a buy after the limited liability company amended its takeover offer for Berry Petroleum.

The $48 billion leveraged buyout of the former TXU Corp by KKR & Co. LP (NYSE: KKR) and other private-equity outfits set record in 2007. Now, the company's impending bankruptcy underscores the risks of looking for a quick buck in the utility sector.

Real industry trends don’t spontaneously occur. They’re forged on the ground by what companies are actually doing. And you spot them by focusing on individual companies’ results, and aggregating your findings.

Fourth quarter is usually a good time to hold utility stocks. But it’s only rarely a good time to buy, as prices often reach yearly highs.

Capital spending plus regulatory support equals rising earnings, dividends and share prices: That’s the formula for superior total returns in utility stocks. And it’s what new Conservative Income Portfolio recommendation SCANA Corp (NYSE: SCG) is locked in to deliver at least to the end of the decade.

When AES Corp (NYSE: AES) started doing business in the 1990s, it had a simple philosophy: Scour the globe for growing electricity demand and execute projects to meet it.

PVR Partners (NYSE: PVR) earns an exit from my Endangered Dividends List this month. The catalyst was not third quarter earnings results, but the acquisition by Regency Energy Partners (NYSE: RGP) for 1.02 Regency units and a cash payment to be determined at close in first quarter 2014.

It’s been barely two weeks since Washington avoided the first federal government default, at least since the Articles of Confederation were in force. The autumn rally in stocks, however, actually began during the heat of the crisis.

The trigger was long overdue recognition the Federal Reserve isn’t going to abandon loose money until the economy is strong enough to handle it. All the “taper” talk that clogged the airwaves for months proved to be meaningless blather.

That’s hardly the first time conventional wisdom has proven disastrously wrong for the investors who bet on it.

The silver lining is resulting volatility was a solid opportunity to buy good stocks cheap. And thanks to that, we’ve already seen sizeable gains for the Conrad’s Utility Investor Model Portfolios, though they’ve only been around three months.

AT&T Inc (NYSE: T) was the only Conrad’s Utility Investor Portfolio pick to report numbers last week. Takeaway one is quite positive: The results followed closely those of arch-rival and co-Big Two US communications company Verizon Communications (NYSE: VZ).