Gas prices give hope for SCANA growth

Exchange: NYSE

Sector: Utilities

Industry: Electric Utilities

Entry strategy

Price: $41–43

Stop-loss: under $34,7

Take profit: $50,5, then $59

Investment horizon: until the end of 2019

Company details

    SCANA Corporation and its subsidiaries

  • generate electricity using nuclear, solar and biological sources, coal, water, gas and oil;
  • sell, distribute and transmit electricity wholesale and retail in the United States;
  • buy, sell and transmit natural gas in Southern and Northern California.

The company was founded in 1924 and is headquartered in Cayce South Carolina.

The issuer’s capitalization is more than $6 billion (group +Mid).

Fundamental drivers for stock price growth

  1. On November 24th, 2018, the company settled a problem with the collective action of consumers in South Carolina. SCANA had hid information about stopping the construction of a nuclear power plant, for which it charged customers higher tariffs. Currently the settlement agreement is awaiting court approval.
  2. Natural gas price has risen sharply. This may have a positive impact on the company’s financial results for the 4th quarter of 2018 — the 1st quarter of 2019.
  3. On November 28th, 2018, the US Federal Reserve Chairman Jerome Powell made a speech which influenced market forecasts about the monetary policy of the American regulator. We expect that the active phase of the rate hikes is over. Therefore, it is time to buy stocks that are sensitive to rising interest rates, especially those that have significantly sunk in prices despite their fundamental attractiveness.

Technical analysis (trading plan)

Graph 1. Technical analysis of SCANA Corporation ($SCG). Source: TradingViewOpen original image

Published on the 29th of November, 2018