Electrical Stocks Performing Reasonably Well as Market Moves into Home Stretch

As anyone who watches Wall Street will tell you, 2016 has been a pretty funky year. A deep chill in late January scared people about the market’s prospects for the rest of the year. Then a smart recovery in the spring was followed by a near-crash after Britain’s Brexit vote. A surprisingly fast recovery since then has put the Dow Jones and S&P 500 Indexes near their recent historical market averages.

Electrical stocks have been along for the same wild ride. As we near the close of the third quarter, the mix of the publicly held electrical companies at the top of the leaderboard when ranked by percent change from their 50-day and 200-day moving averages has changed from recent years. As you can see on the chart STOCK PERFORMANCE OF PUBLICLY HELD ELECTRICAL COMPANIES, some companies that had over the past couple of years led other electrical stocks, including Generac (GNRC), Grainger (GWW) and Fastenal (FAST), have slipped to the back of the pack when their performance is measured by these metrics. Others like ABB (ABB), Nexans (NEX.PA), Mersen (MRN.PA) and Rexel (RKL.PA) are beating the performance of other electrical stocks and in some cases the market averages.

There’s been some other interesting news with electrical stocks over the past few months. The Philips Lighting (LIGHT.AS) IPO launched in late-May is performing well and is up 3.9% and 8.1% over its  the 50-day and 200-day moving averages, respectively. WESCO (WCC) had been beaten up a bit over the past year or so but this week was awarded a “Buy” rating from Longbow Research and has an 8.8 “Bullish” Rating on Fidelity Investment’s Equity Summary Scoreboard, a compilation of ratings from 10 equity analysts.

 If there was an award for the prettiest stock chart, you might have to consider the five-year chart for Acuity Brands (AYI), which outside of the Jan. 2016 chill shows an almost straight-line shot to the heights of prosperity. Over this period, the stock marched from the $40 level in 3Q 2011 to its Wednesday close of $270.50. The savvy investor who bought 100 shares of Acuity stock on Sept. 7, 2011 for $40.11 per share and a total investment of $4,011 and held onto them,would today be sitting on a handsome 574% increase and $27,050. – Jim Lucy