I was wondering if now may be a good time to purchase Utilities. I am currently of the opinion we will see another 18 months of hell followed by recovery + inflation. I am already starting to get long commodities companies in general and looking to diversify a bit.
I agree, or at least for Albertan utility companies. Just looking at stocks like ACO.X, TA, CU, EP.UN on the TSE you can see that they are clearly in a rut right now. I think there is higher demand growth for power than there is for supply growth, as it is harder to get financing for new power projects in this economy. One the one hand, industrial loads won't be demanding much more and many new projects are put on hold, but I think there would be less new power projects going forward in attempts to keep power prices slightly inflated, keeping the supply growth stagnant thus increasing profits to the deregulated utility companies in the province. Over a period of 2 years or so, I think many of these stocks are a pretty good deal right now.
With commodity hedges and across the board decreased devaluation on fuel sources, utilities will do well going forward. Obama's stance on coal is a cause for concern long term. What really intrigues me is water. We're surround by it but we don't have enough of it. I think it could be a explosive industry in the next few years. A stock like VE looks interesting even though it's a French company.