This boring sector is up 21% in 2019...
It's not the high-flying tech sector. It’s actually about as dull as it gets. And that’s why the big move higher this year should put it on your radar.
I'm talking about the utilities sector...
Most investors spend little time thinking about utility stocks – and for good reason. They’re highly regulated, boring businesses. Most of the time, they don’t do a whole lot.
Growth is slow, but profits are steady. That means that if you buy them right, you can make big profits. And based on history, now is one of those times.
Let me explain…
Aside from this sector's big 2019 move, we have another reason to be excited about utilities. They recently made a specific move... one that signals for more profits on the horizon.
Utilities recently climbed for several consecutive days. Strings of up-days usually signal a strengthening trend. They typically mean more upside is on the way.
That's exactly what we are seeing in utility stocks today. The sector rallied seven days in a row. Importantly, this is a rare event...
It's only happened 1% of the time going back to 2001. Even more, buying after similar instances led to a winning trade 83% of the time.
Clearly, this is something we should pay attention to. Take a look at this chart of the Utilities Select Sector SPDR Fund (XLU)...
Utilities have been in a solid uptrend. And this up-day event was the latest sign of strength.
You shouldn't worry that the gains are over, though... History says this strong performance should continue.
Since 2001, similar cases have led to strong outperformance compared with the typical return for the sector. Check it out...
Again, utilities are a boring sector. These companies keep the lights on at your house – plain and simple. So the slow-but-steady 5% annual return they've generated since 2001 won't surprise anyone.
Buying after today's extreme does much better, though. Similar instances led to 3% gains in three months, 5% gains in six months, and a solid 8% return over the next year.
If you want to take advantage of this, you can do it easily with shares of XLU...
This simple fund tracks the overall utilities sector. And it’s an easy way to take advantage of the potential upside in this otherwise boring sector.
Most of the time, utilities aren't an exciting opportunity. Now is not one of those times. We have a rare chance to make solid profits... And that’s why XLU is worth considering today.
Good investing,
Chris Igou
Further Reading
"I live in Napa Valley. They've shut the power down to avoid wildfires," a subscriber told Brett Eversole at our annual Stansberry Conference in Las Vegas. Most folks don't think much about utilities until it becomes news. But don't let the madness distract you... Read more here.
"We've only seen this setup three times since the 1980s," Steve writes. "We've seen only two other cases... in 2008 and 2016." In every case, this unusual signal was a fantastic reason to own stocks. And this time is no different... Learn more here: This Rare Anomaly Is a Screaming Buy for Stocks.
Bond yields have crashed. And that creates a huge opportunity in dividend-paying stocks – like utilities...
HIGHS AND LOWS
NEW HIGHS OF NOTE LAST WEEK
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KLA (KLAC)... semiconductor "picks and shovels"
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CRISPR Therapeutics (CRSP)... gene editing
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Sysco (SYY)... food products
CarMax (KMX)... used cars
NEW LOWS OF NOTE LAST WEEK
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Antero Midstream (AM)... natural gas
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