Investing Topics: Regulated Utilities

We run through the first quarter’s biggest winners and biggest losers, while revisiting the investment themes that should outperform in 2014.

Utility history is rife with poor diversification, and that appears to be the consensus bet against WGL Holdings (NYSE: WGL), the regulated gas distribution company for the District of Columbia, suburban Maryland and Northern Virginia. But an A+ rating on top of an attractive yield could change skeptics' minds.

Every portfolio has winners and losers. The key is knowing when to let the best performers run, and cut the worst loose.

Thanks again to everyone who tuned in to my second on-line chat for Conrad’s Utility Investor subscribers last week. The full transcript of the 4-hour question and answer session is now available on the CUI website by clicking on the “Events” tab from the home page.

The newest member of the Conservative Income Portfolio operates regulated and unregulated utility businesses and is poised for impressive distribution growth.

After two consecutive winning months, it’s hard to believe utility stocks had so many detractors to start 2014. And it’s even more difficult to find anyone who will own up to being bearish then or now.

Almost anything can affect stock prices in the near term. Long-term, earnings and dividend growth are what counts.

Not every buy and hold investor has the savvy and steady temperament to be as successful as Warren Buffett. Similarly, not every short seller is insightful and nimble enough to match Jim Chanos’ storied success.

No US utility is better positioned to profit from America’s energy boom than Entergy Corp (NYSE: ETR). The company’s six electric utility units own and operate 22 gigawatts of power plants in Arkansas, Louisiana, Mississippi and Texas.

Buying stocks of strong companies at the lowest possible prices: That’s been my primary strategy thus far for the Conrad’s Utility Investor Portfolios.

This month, I’m adding two stocks to the Conservative Holdings.