The Southern Company (NYSE:SO) – Clock That Stock
The Stock
President Obama announced today of an $8.3B loan guarantee to The Southern Company (NYSE:SO) in efforts to stimulate growth in the area of nuclear power production, growth that hasn’t occurred in three decades. According to MSNBC “the loan guarantees will aid in the construction of two new nuclear reactors at an existing plant in Burke, GA, which will generate power for some 1.4 million people.” Southern Co. is trading up over 1.5% at mid-day.
The Southern Company has come off rather flat over the market rebound that we have been witnessing over the past year, having gained a meager 28 cents, or 0.9%, over the last 52-weeks. Average P/E is indicated at around 16 for this stock, with a Forward P/E at around 12, implying an upward potential of 30% to 40% if the current levels hold true. Prospects for long-term earnings growth are modest at around 5%, but there is no doubt that this company has received a huge kick in the right direction after today’s announcement. Just to further make this stock more appealing is the 5.5% yielding dividend, however, with concerns over the cash positions being devoted to capital expenditures, there are worries that these payout levels may not be able to be sustained. The short-term expected trading range is 31.37 to 33.23.
Chart Courtesy of StockCharts.com
The Clock
Seasonality for this equity is not favorable between now an mid-march. As well, according to the sector rotation model the ideal time to invest in utilities is after the economic recovery is further along, meaning that we’re not quite there yet.
| The Southern Company (SO) 31.17 | -0.15 (-0.48%) | ||||||||||||||||||||
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| Seasonality Analysis | |||||||||||||||||||||
| Analysis has revealed that with a buy date of March 12 and a sell date of December 28, investors have benefited from a total return of 596.73% over the last 10 years. This scenario has shown positive results in 10 of those periods. | |||||||||||||||||||||
| The buy and hold return for the past 10 years was 281.88%. | |||||||||||||||||||||
| Technical Analysis | |||||||||||||||||||||
| Support 2 | Support 1 | Pivot Point | Resistance1 | Resistance2 | The Numbers | ||||||||||||||||
| 30.86 | 31.02 | 31.14 | 31.30 | 31.42 | Most Recent Close: | 31.17 | |||||||||||||||
| Support/Resistance Analys | Neutral | 52-Week High: | 34.47 | ||||||||||||||||||
| MACD Analysis: | Negative/Decreasing | 52-Week Low: | 25.36 | ||||||||||||||||||
| MACD vs. Signal: | Below/Thinning | Fib. Retracement: | ~ 61.8% | ||||||||||||||||||
| RSI Analysis: | Bearish | 50-Day MA: | 32.58 | ||||||||||||||||||
| Stochastic (Fast) Analysis: | Increasingly Oversold | 200-Day MA: | 30.72 | ||||||||||||||||||
| 50 vs 200-Day MA Analysis: | 50-day Above 200-Day MA | High Critical Level: | 33.23 | ||||||||||||||||||
| Year over Year Trend: | Weakly Gaining | Low Critical Value: | 31.37 | ||||||||||||||||||
| Critical Level Analysis: | Broke Below Previous Tren | Average Monthly Gain: | 0.7% | ||||||||||||||||||
| MFI Analysis | Below 50 Declining | Technical Rating: | 8 | ||||||||||||||||||
| Candlestick Analysis | Buyers outweighing Sellers | On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels. | |||||||||||||||||||
| Situational Analysis | |||||||||||||||||||||
| Past Year | Advancing Sessions % | Return % | 10-Year Average | Advancing Sessions % | Return % | ||||||||||||||||
| Feb 15 thru Mar 17 | 47.6 | -8.2 | Feb 15 thru Mar 17 | 49.9 | -0.6 | ||||||||||||||||
| Best Return: 0% – Sell Feb 16 | Best Return: 2% – Sell Mar 1 | ||||||||||||||||||||
| Feb 15 thru May 16 | 47.6 | -9.1 | Feb 15 thru May 16 | 51.4 | 4.2 | ||||||||||||||||
| Best Return: 1.4% – Sell Mar 23 | Best Return: 8.6% – Sell Apr 19 | ||||||||||||||||||||
| Feb 15 thru Aug 14 | 50 | 3.2 | Feb 15 thru Aug 14 | 51.5 | 8.8 | ||||||||||||||||
| Best Return: 5.5% – Sell Jul 24 | Best Return: 12.5% – Sell Jul 3 | ||||||||||||||||||||
| Four Year Presidential Cycle: Through Mid-Term Election Years | Following Earnings Releases | ||||||||||||||||||||
| 5-Period Average | Advancing Sessions % | Return % | 16-Period Average | Advancing Sessions % | Return % | ||||||||||||||||
| Feb 15 thru Mar 17 | 45.1 | 1 | 30-Days Following | 48.3 | -0.1 | ||||||||||||||||
| Best Return: 2.5% – Sell Mar 4 | Best Return: 2.5% – Sell 9 days following | ||||||||||||||||||||
| Feb 15 thru May 16 | 42.9 | 0.3 | 60-Days Following | 50.4 | 1.3 | ||||||||||||||||
| Best Return: 6.5% – Sell Apr 2 | Best Return: 4.7% – Sell 37 days following | ||||||||||||||||||||
| Feb 15 thru Aug 14 | 42.2 | 6.3 | 90-Days Following | 49.2 | 0.4 | ||||||||||||||||
| Best Return: 10% – Sell Jul 24 | Best Return: 6.1% – Sell 50 days following | ||||||||||||||||||||
| Further Analysis | |||||||||||||||||||||
| Sector: | Utilities | Industry: | Electric Utilities | ||||||||||||||||||
| According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Utilities Sector ranges from July 17th through to October 3rd. Strength in this sector is related to the sweet spot in the U.S. Treasury Market. | |||||||||||||||||||||
| Current Consensus Recommend: | Hold | ||||||||||||||||||||
| Recommendation 1-Month Ago: | Hold | ||||||||||||||||||||
| Recommendation 3-Months Ago: | Hold | ||||||||||||||||||||
| Disclaimer | |||||||||||||||||||||
| Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed. | |||||||||||||||||||||
| © 2010 EquityClock.com, member of the Tech Talk Financial Network | |||||||||||||||||||||
Stocks mentioned in this post: SO
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