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The Southern Co's (SO) stock has broken through key resistance, and that's one reason I'm reiterating my buy rating for the company's shares, first recommended on June 19, 2009 at a price of $30.61. Further, another reason is SO's Atlanta-based operations: the commercial side of energy use (primarily the industrial segment), will take longer to snap back, but a quicker residential recovery should offset that industrial sluggishness;the greater Atlanta region did not experience as large a residential housing bubble as the West and East coasts, hence the bust was not as severe, from a household formation standpoint. And as the macroeconomic tenet states-- "as household formation goes, so goes revenue." Hence, SO is in a metro area that should fare well in the years ahead.
The company's dividend stream, experienced management, and 42.6 megawatts of generating capacity, add to the positive story. The First Call FY2009/FY2010 EPS estimates for SO are $2.32 to $2.44.
Technically, as noted, Southern's stock broke through resistance at/near $34, which confirms the mild uptrend that one typically sees for a well-performing utility.
Stock Analysis: Southern Co. is a low-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in SO now; then buy another 25% in one month, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your SO position before February 2010. Sell/Stop Loss if you were to buy shares in this company: $17.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Technically, as noted, Southern's stock broke through resistance at/near $34, which confirms the mild uptrend that one typically sees for a well-performing utility.
Stock Analysis: Southern Co. is a low-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in SO now; then buy another 25% in one month, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your SO position before February 2010. Sell/Stop Loss if you were to buy shares in this company: $17.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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