Tag Archives: italian

Complete List Of 101 ETP Closures In 2015

A total of 101 U.S.-listed exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”) had their listings removed in 2015, one shy of the record 102 closures in 2012. Of the 2,405 U.S. exchange-traded products (“ETPs”) launched since 1993, when the industry began, only 1,845 remain, making the lifetime death toll 560 (475 ETFs and 85 ETNs). This puts the historical mortality rate at 23.3%, up from 21.6% a year ago. It’s getting tougher to survive out there. Click to enlarge A significant, but uncelebrated, milestone was achieved in 2015: the lifetime death toll reached 500 . Broken down by major categories, the 101 closures of 2015 consisted of 11 sector, 14 style and strategy, 21 global and international, 12 bond, 10 inverse, 17 leveraged and inverse, 12 commodity, and four currency products. Slicing another direction reveals 79 of the closures were ETFs and 22 were ETNs. Nine of the shuttered ETFs were actively managed funds. Percentage-wise, ETN closures were more significant. During 2015, there were only a dozen launches, and ETNs declined from 211 to 201. This is the largest-ever annual decline of ETNs, and the number of active listings remains well below the peak of 218 established in mid-2012. Closures affected 20 brands and sponsors. Three firms completely exited the business by closing their entire product lines. The Royal Bank of Scotland (NYSE: RBS ) closed all 13 of its ETNs, Russell closed its one remaining ETF after shutting down the other 25 back in 2012 , and Source closed its one and only U.S.-listed ETF. As an ETF sponsor, Source lasted less than seven months in the U.S. market and now holds the record for the shortest sponsor lifespan. Sponsors and brands with the highest closure quantities for the year included BlackRock iShares (19), ProShares (19), RBS ETNs (13), Deutsche X-trackers (7), Invesco PowerShares (6), and AdvisorShares (6). Assets in these closed products averaged $25.4 million, for a total of $2.57 billion. However, a large portion can be attributed to the three target-maturity ETFs with their planned maturity and liquidation dates. These were the Guggenheim BulletShares 2015 High Yield Corporate Bond ETF (NYSEARCA: BSJF ) at $469 million, the Guggenheim BulletShares 2015 Corporate Bond ETF (NYSEARCA: BSCF ) at $363 million, and the iShares iBonds Sep 2015 AMT-Free Muni Bond ETF (NYSEARCA: IBMD ) at $89 million. Strategic closures also had an impact on the numbers. The decision by RBS to exit the business left $827 million on the table, including $488 million in the RBS U.S. Large Cap Trendpilot ETN (NYSEARCA: TRND ) and $144 million in the RBS US Mid Cap Trendpilot ETN (NYSEARCA: TRNM ). Deutsche Bank (NYSE: DB ) bet the farm on currency hedging and closed most of its non-hedged products, including two with assets of more than $40 million each. The Invesco-DB partnership appeared to come to an end when all of the PowerShares ETNs issued by DB were closed and liquidated. With the exception of out-of-the-blue strategic closure decisions, ETF Deathwatch continues to do a good job of identifying the zombie ETFs and warning investors of potential fund closures. Of the 101 liquidated products, 79 were on ETF Deathwatch when their terminations were announced. Excluding the strategic decisions mentioned above, just nine of the closures were not on ETF Deathwatch. Many of those had assets above $25 million, which suggests the current criteria may not be strict enough. Ages of the liquidated products ranged from less than seven months for the Source EUROSTOX 50 ETF (NYSEARCA: ESTX ) to 7.9 years for a dozen of the ProShares ETFs. In all, 21 of the products were more than seven years old, suggesting that sponsors had been willing to subsidize these funds for many years before giving up hope of them ever becoming profitable. Given the increasingly competitive landscape, it’s not clear sponsors will exhibit such patience going forward. The interactive table below is currently sorted by product name. ETF and ETN Closures of 2015 # Ticker Name Last Day Deathwatch Notes 1 AGLS AdvisorShares Accuvest Global Long Short ETF 08/07/2015 Yes 1 2 ACCU AdvisorShares Accuvest Global Opportunities ETF 01/09/2015 1 3 HDGI AdvisorShares Athena International Bear ETF 01/09/2015 Yes 1 4 GGBP AdvisorShares Gartman Gold/British Pound ETF 01/26/2015 Yes 1 5 GLDE AdvisorShares International Gold ETF 01/26/2015 Yes 1 6 DBIZ AdvisorShares Pring Turner Business Cycle ETF 10/02/2015 Yes 1 7 CSMB CS X-Links 2x Monthly Merger Arbitrage Liquid Index ETN 07/02/2015 Yes 8 CSMN CS X-Links HOLT Market Neutral Global Equity ETN 07/02/2015 Yes 9 TDD Deutsche X-trackers 2010 Target Date ETF 05/18/2015 Yes 10 TDH Deutsche X-trackers 2020 Target Date ETF 05/18/2015 11 TDN Deutsche X-trackers 2030 Target Date ETF 05/18/2015 12 TDV Deutsche X-trackers 2040 Target Date ETF 05/18/2015 13 TDX Deutsche X-trackers In-Target Date 05/18/2015 Yes 14 UTLT Deutsche X-trackers Regulated Utilities 09/09/2015 Yes 15 SUBD Deutsche X-trackers Solactive Investment Grade Subordinated Debt 09/09/2015 Yes 16 SYTL Direxion Daily 7-10 Year Treasury Bull 2x 10/20/2015 Yes 17 MATL Direxion Daily Basic Materials Bull 3x 10/20/2015 Yes 18 BAR Direxion Daily Gold Bull 3x 06/19/2015 Yes 19 MDLL Direxion Daily Mid Cap Bull 2x 10/20/2015 Yes 20 BCHP EGShares Blue Chip 10/30/2015 Yes 21 BRXX EGShares Brazil Infrastructure 10/30/2015 Yes 22 AGOL ETFS Physical Asian Gold Shares 08/12/2015 23 BRAF Global X Brazil Financials 10/08/2015 Yes 24 AZIA Global X Central Asia & Mongolia Index 10/08/2015 Yes 25 GURX Global X Guru Small Cap Index 10/08/2015 Yes 26 JUNR Global X Junior Miners 10/08/2015 Yes 27 BSCF Guggenheim BulletShares 2015 Corp Bond 12/30/2015 2 28 BSJF Guggenheim BulletShares 2015 HY Corp Bond 12/30/2015 2 29 HFIN Horizons S&P Financial Sel Sec Covered Call 03/20/2015 Yes 30 IFAS iShares Asia Developed Real Estate 08/21/2015 Yes 31 MONY iShares Financials Bond 08/21/2015 Yes 32 FCHI iShares FTSE China 08/21/2015 33 IBMD iShares iBonds Sep 2015 AMT-Free Muni Bond 09/01/2015 2 34 ENGN iShares Industrials Bond 08/21/2015 Yes 35 AAIT iShares MSCI All Country Asia Info Tech 08/21/2015 Yes 36 AXJS iShares MSCI All Country Asia x-Japan SmallCap 08/21/2015 Yes 37 EWAS iShares MSCI Australia Small-Cap 08/21/2015 Yes 38 EWCS iShares MSCI Canada Small-Cap 08/21/2015 Yes 39 EMDI iShares MSCI Emerging Markets Cons Discretionary 08/21/2015 Yes 40 ESR iShares MSCI Emerging Markets Eastern Europe 08/21/2015 41 EEME iShares MSCI Emerging Markets EMEA 08/21/2015 Yes 42 EMEY iShares MSCI Emerging Markets Energy Sector 08/21/2015 Yes 43 EGRW iShares MSCI Emerging Markets Growth 08/21/2015 Yes 44 EVAL iShares MSCI Emerging Markets Value 08/21/2015 45 EWHS iShares MSCI Hong Kong Small-Cap 08/21/2015 46 EWSS iShares MSCI Singapore Small-Cap 08/21/2015 Yes 47 IFNA iShares North America Real Estate 08/21/2015 48 AMPS iShares Utilities Bond 08/21/2015 49 QEM Market Vectors MSCI Emerging Markets Quality 09/18/2015 Yes 50 QDEM Market Vectors MSCI Emerging Markets Quality Dividend 09/18/2015 Yes 51 QXUS Market Vectors MSCI International Quality 09/18/2015 Yes 52 QDXU Market Vectors MSCI International Quality Dividend 09/18/2015 Yes 53 BARL Morgan Stanley S&P 500 Crude Oil ETN 01/29/2015 Yes 54 FIVZ PIMCO 3-7 Year U.S. Treasury Index 09/23/2015 Yes 55 TENZ PIMCO 7-15 Year U.S. Treasury Index 09/23/2015 56 FORX PIMCO Foreign Currency Strategy Active 09/23/2015 Yes 1 57 ITLT PowerShares DB 3x Italian T-Bond Futures ETN 02/24/2015 58 UUPT PowerShares DB 3x Long USD Idx Futures ETN 02/24/2015 59 UDNT PowerShares DB 3x Short USD Idx Futures ETN 02/24/2015 Yes 60 ITLY PowerShares DB Italian T-Bond Futures ETN 02/24/2015 Yes 61 DEFL PowerShares DB US Deflation ETN 02/24/2015 Yes 62 INFL PowerShares DB US Inflation ETN 02/24/2015 Yes 63 FINF ProShares Short 30 Year TIPS/TSY Spread 01/08/2015 Yes 64 GDAY ProShares Ultra Australian Dollar 06/18/2015 Yes 65 UKW ProShares Ultra Russell Midcap Growth 01/08/2015 Yes 66 UVU ProShares Ultra Russell Midcap Value 01/08/2015 Yes 67 UKF ProShares Ultra Russell1000 Growth 01/08/2015 Yes 68 UVG ProShares Ultra Russell1000 Value 01/08/2015 Yes 69 UKK ProShares Ultra Russell2000 Growth 01/08/2015 Yes 70 UVT ProShares Ultra Russell2000 Value 01/08/2015 Yes 71 UWC ProShares Ultra Russell3000 01/08/2015 Yes 72 UINF ProShares UltraPro 10 Year TIPS/TSY Spread 01/08/2015 Yes 73 SINF ProShares UltraPro Short 10yr TIPS/TSY Sprd 01/08/2015 Yes 74 SDK ProShares UltraShort Russell Midcap Growth 01/08/2015 Yes 75 SJL ProShares UltraShort Russell Midcap Value 01/08/2015 Yes 76 SFK ProShares UltraShort Russell1000 Growth 01/08/2015 Yes 77 SJF ProShares UltraShort Russell1000 Value 01/08/2015 Yes 78 SKK ProShares UltraShort Russell2000 Growth 01/08/2015 Yes 79 SJH ProShares UltraShort Russell2000 Value 01/08/2015 Yes 80 TWQ ProShares UltraShort Russell3000 01/08/2015 Yes 81 TLL ProShares UltraShort Telecommunications 09/14/2015 Yes 82 TCHI RBS China Trendpilot ETN 07/06/2015 Yes 83 DRGS RBS Global Big Pharma ETN 07/06/2015 Yes 84 TBAR RBS Gold Trendpilot ETN 07/06/2015 85 TNDQ RBS NASDAQ 100 Trendpilot ETN 07/06/2015 86 TWTI RBS Oil Trendpilot ETN 07/06/2015 Yes 87 RGRA RBS Rogers Enhanced Agriculture ETN 07/06/2015 Yes 88 RGRC RBS Rogers Enhanced Commodity Index ETN 07/06/2015 Yes 89 RGRE RBS Rogers Enhanced Energy ETN 07/06/2015 Yes 90 RGRI RBS Rogers Enhanced Industrial Metals ETN 07/06/2015 Yes 91 RGRP RBS Rogers Enhanced Precious Metals ETN 07/06/2015 Yes 92 ALTL RBS US Large Cap Alternator ETN 07/06/2015 Yes 93 TRND RBS US Large Cap Trendpilot ETN 07/06/2015 94 TRNM RBS US Mid Cap Trendpilot ETN 07/06/2015 95 ONEF Russell Equity 01/26/2015 Yes 1 96 ESTX Source EURO STOXX 50 04/10/2015 97 VRD SPDR Nuveen S&P VRDO Municipal Bond 03/18/2015 Yes 98 KME SPDR S&P Mortgage Finance 03/18/2015 Yes 99 GMFS SPDR S&P Small Cap Emerging Asia Pacific 03/18/2015 Yes 100 USMI United States Metals 03/18/2015 Yes 101 EU WisdomTree Euro Debt 02/11/2015 Yes 1 Showing 1 to 101 of 101 entries Notes : 1) actively managed, 2) reached planned maturity. All exchange traded notes are identified with “ETN” as part of their name description.

EWI: 3 Coins In The Fountain

A long established fund, with consistent dividend returns. The fund is well off its highs attained before the financial crises of 2008. Italy, as part of the larger EU, offers investors the opportunity to grow with a recovering EU economy. Among the available legions of ETFs there are only two mostly Italian weighted at better than 94% and they are closely related funds. First, is the plain vanilla iShares MSCI Italy Capped ETF (NYSEARCA: EWI ) and the currency hedged version, the iShares Currency Hedged MSCI Italy ETF (NYSEARCA: HEWI ). The currency hedged fund HEWI, as its ticker symbol suggests, is identically the EWI fund with the addition of a U.S. Dollar vs Euro currency hedge. It should be noted that a currency hedge does its best to mitigate fluctuation in currency exchange. Just briefly, when the U.S. Dollar strengthens against the Euro, Euro denominated profits will seem to shrink when translated into U.S. Dollars even if Euro denominated profits remain unchanged. Conversely, when the Dollar weakens vs the Euro, Euro denominated profits will seem to grow, even if Euro denominated profits remain unchanged. A currency hedge is designed to ‘smooth out’ these fluctuations. However, there are costs associated with currency hedge, so an investor would a long term horizon may or may not fully benefit from a currency hedge. Hence, the choice of the hedged [HEWI] or unhedged [EWI] version is left to the discretion of the investor. The benchmark index is Morgan Stanley Capital International [MSCI] Italy 25/50 Index (NYSEARCA: USD ): The MSCI Italy 25/50 Index is designed to measure the performance of the large and mid-cap segments of the Italian market. It applies certain investment limits that are imposed on regulated investment companies, or RICs, under the current U.S. Internal Revenue Code. With 26 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in Italy. The fund’s cap refers to U.S. IRS tax code in that: …at the end of each quarter of its tax year no more than 25% of the value of the RIC’s assets may be invested in a single issuer and the sum of the weights of all issuers representing more than 5% of the fund should not exceed 50% of the fund’s total assets… Lastly, the MSCI cap methodology is designed to minimize turnover. (click to enlarge) ( Data From MSCI and BlackRock) The three heaviest weighted sectors are a little different. The fund weights the Energy Sector energy about 10.8% more than does the index; Financials about 4.41% lighter than the index and Utilities almost 13% heavier than the index. So the fund leans a little more defensively than does the index. In spite of the difference, the iShares Italy capped fund EWI seems to emulate the MSCI index rather well. iShares EWI vs the MSCI Index 1 Year 3 Year 5 Year 10 Year Inception MSCI Italy 25/50 Index -7.09% 7.97% -0.58% -2.83% 4.07% iShares Italy Capped EWI -7.23% 8.21% -0.59% -2.83% 4.16% (Data From BlackRock) As far as individual holdings, MSCI only list the top ten heaviest weighted holdings. A quick comparison reveals a slight difference from the fund. First, the top ten Index holdings represents 65.42% of the entire index, whereas the top ten holdings of EWI represents 68.74% of the fund’s holdings. As far as individual top ten holdings, the iShares fund carries three identical financials and Telecom Italia (NYSE: TI ) 3.6132% of the fund’s total holdings. On the other hand, the MSCI Index carries a fourth financial, Banca Monte Dei Paschi di Siena ( OTCPK:BMDPY ) 5.25%, of the index. The fund carries the bank also, but it accounts for only 2.096% of the total fund. Top ten comparison of MSCI Index vs iShares EWI Sector MSCI EWI Sector Consumer Discretionary LUXOTTICA GROUP (NYSE: LUX ): 4.66% LUXOTTICA GROUP: 4.58% Consumer Discretionary Consumer Discretionary FIAT CHRYSLER AUTOMOBILES NV (NYSE: FCAU ): 4.00% FIAT CHRYSLER AUTOMOBILES NV: 4.11% Consumer Discretionary Energy ENI (NYSE: ENI ): 11.00% ENI: 11.96% Energy Financials INTESA SANPAOLO ( OTCPK:ISNPY ): 12.13% INTESA SANPAOLO: 13.48% Financials Financials UNICREDIT ( OTC:UNCFY ): 7.57 UNICREDIT: 8.72% Financials Financials BANCA MONTE DEI PASCHI DI SIENA SP: 5.25% ASSICURAZIONI GENERALI: 4.53% Financials Financials ASSICURAZIONI GENERALI ( OTCPK:ARZGY ): 4.48% ATLANTIA: 4.56% Industrials Industrials ATLANTIA ( OTCPK:ATASY ): 4.43% TELECOM ITALIA: 3.61% Telecommunications Utilities ENEL ( OTCPK:ENLAY ): 7.73% ENEL: 8.93% Utilities Utilities SNAM ( OTCPK:SNMRY ): 4.00% SNAM: 4.26% Utilities Represents 65.42% of the Index Represents 68.74% of the Fund (Data from BlackRock and MSCI) It’s worth making note of the difference between those two top holdings. Banca Monte Dei Paschi di Siena provides corporate and consumer banking services, asset management, life insurance, pension funds and investment trust. The bank has a market cap of $5.3876 billion, has a negative EPS at -5.97 and does not pay a dividend. Lastly, the shares are rather volatile with a beta of 1.73 times the market. Telecom Italia’s primary businesses are landline and mobile telephone service, internet and internet protocol TV as well as the office product and IT provider, Olivetti , as a wholly owned subsidiary. Telecom Italia company is the leading company in its sector, with international operations in Brazil and Argentina in addition to domestic operations. Telecom Italia has a market cap of $19.87 billion, a P/E of 25.65 and a beta of 1.43 times the market, however, no dividend yield. (click to enlarge) Lastly, a few words about the Italian economy: Italy seems to have two economies: the northern, industrial economy as well as a lagging southern economy. The difference is notable. The entire economy grew at about 0.3% in 2015-Q1 with full year expectations of about 0.7%. The Eurozone economy, (EU19) as a whole, grew at 0.4% in Q1. The results were similar in Q2, with Italy growing at 0.2%, while the entire EU19 grew at 0.3%. However, according to the Economist , ” A Tale of Two Economies” , North and Central Italy grew at 2%, well ahead of the Eurozone as well as the entire EU, (EU28). To put it perspective: … Of the 943,000 Italians who became unemployed between 2007 and 2014, 70% were southerners… … Italy’s aggregate workforce contracted by 4% over that time; the south’s, by 10.7%… …Employment in the south is lower than in any country in the European Union, at 40%; in the north, it is 64%… In the North, per Capita GDP is about $35,500; in the south about $19,250. Unemployment in the North is 9.5%; in the south 20.7%. Public debt is approximately 133% of GDP. The economic obstacles in the south go beyond direct economic regions, including changing demographics. About 700,000 Italians migrated to the northern part of the country and skilled labor is in short supply in the south. Lastly, the southern region contains the islands Sardinia and Sicily where growth and recovery have been slower. Until recently, both islands have been weighed down by higher utility and transportation costs to and from the mainland. Their economies rely heavily on the Hospitality Industry. However, recent reforms and infrastructure upgrades have had very positive results. To put progressive reforms in perspective, Sicily now ranks as the 8th and Sardinia 13th of the fastest growing of the 20 regions in Italy. Sardinia is currently seeking tax haven status, and is currently free from custom duties; Sicily is developing Etna Valley, attracting electronics firms such as STMicroelectronics (NYSE: STM ) and Numonyx, a wholly owned subsidiary of Micron Technologies (NASDAQ: MU ). Key Facts Summary Net Assets Outstanding Shares Holdings x-cash or derivatives 20 Day Average Volume Expense Ratio (Industry Average 0.44%) Price/ Earnings Price/ Book Beta Annualized Yield iShares EWI Italy 25/50 Capped $1.1504 billion USD 79.5 million 26 494,696 0.48% 22.39 1.10 0.85 3.69% and 2.52% TTM (Data from BlackRock and MSCI) At first glance, an investor might shy away based on the Italian economy and to be sure, there is a risk. However, Italy is a key component state of the larger European Union. In other words, the Italian economy is not entirely left to its own devices and is subject to the rules and regulations governing its membership in the EU. True the EU has had some difficult years, but amazingly, has not only come out intact, but has even added a new member. Right now, Italy’s economy as an EU member will feel the effects of a global economic contraction. However, for those investors with patience, the potential for the Italy economy as a member of a fully recovered EU economy, may prove profitable in the long run.

20% Dividend Raise And Recent Pullback Make My Favorite Utility Northwestern Corp. Attractive

NWE raised its dividend 20% for Q1 2015 to $0.48 per common share (3.67% annually). Q4 2014 adjusted earnings were $2.68 per share (at the midpoint of guidance of $2.60-$2.75) a +7.2% improvement over Q4 2013. Total revenues were about $312.95 million. This was a miss of -$37.14 million. Revenues were down year over year about -1.9%. Northwestern Corp. (NYSE: NWE ) does business under the name Northwestern Energy. On February 15, 2002 Northwestern Corp. acquired the energy distribution and transmission business of Montana Power to form Northwestern Energy (still Northwestern Corp. though). It is a leading energy delivery company with business in Montana, South Dakota, Nebraska, and Wyoming, especially the first two states. It recently raised its dividend by 20% to $0.48 per common share per quarter for a 3.67% annual yield. The long term chart of NWE below shows it to be in a strong upward trend long term. (click to enlarge) Essentially NWE has gone straight upward since the low of the Great Recession. Perhaps as significantly, it had recovered fully from the Great Recession by April 1, 2010. Such stalwarts as Chevron and Johnson & Johnson took much longer — until early 2011 and late 2012 respectively. Even stalwart utility companies such as Southern Company (NYSE: SO ) and Consolidated Edison (NYSE: ED ) took until early 2011 to recover to their 2007 highs. NWE has a past as an outperformer; and its future will likely be equally as bright. To understand the latest stock price movements, it may be best to look at the charts of the 10 year US Treasury Note yield and the one year chart of NWE . (click to enlarge) The yellow line in the NWE chart above demarks January 30, 2015, which was the recent yield nadir for the 10 year US Treasury Note. As the yield for the 10 year US Treasury Note rose from 1.64% on January 30, 2015 to 2.24% on March 6, 2015, the price of NWE stock fell. This is the normal scenario for utilities when interest rates rise because the utilities’ dividend rates are normally remaining unchanged. This high correlation also likely tells investors that this is a good time to buy NWE (and utilities in general), if you believe the yield on the 10 year US Treasury Note is resuming its downtrend. There are many reasons to believe this: Most EU bonds have been trending downward due to the €1.1 trillion ECB QE program in 2015. Many bonds that are generally viewed as riskier and less stable than US Treasuries currently have much lower yields (and are much more expensive) than US Treasuries. For example, the Spanish 10 year bond yield is 1.15% and the Italian 10 year bond yield is 1.13% . These low yields on “riskier” bonds should push the yields of the “less risky” 10 year US Treasury bonds downward. The 10 year US Treasury Note yield is 2.12% as of this writing March 13, 2015. The USD has risen dramatically against the Euro and other currencies in the last year. For instance, the Euro has fallen from 1.39 USD per Euro on May 6, 2014 to 1.06 USD per Euro as of the close on March 12, 2015 (almost a -24% drop). If the USD is appreciating against other currencies, that makes US Treasuries that much more attractive to foreign investors. After all a European could have made fantastic money just on the appreciation of the USD since May 6, 2014, if the European had owned US Treasuries. He/she would also have gotten the yield on the Treasuries. Plus since US Treasury yields have been going down, the European investor would have gotten appreciation on the price of the US Treasuries. Since many people think the devaluation of the Euro versus the USD is likely to continue as the ECB dispenses more QE in 2015, many Europeans seem likely to invest in US Treasuries. This should act to increase the prices (decrease the yields) of US Treasuries. That in turn is also motivation for investors (including Europeans and Japanese) to buy US utility stocks, which will likely have stable to increasing yields. All of the major economies other than the US have been increasing easing actions. The BOJ has a huge QE program . The PBOC has recently been announcing new easing programs . If there is a lot of extra liquidity around, people will not want to pay very much in interest rates to borrow money. Foreign investors will also be happy to keep their money in Treasuries of the one country with an appreciating currency (the one that is not doing more easing currently). The US Fed has talked about raising its rates, especially the Fed Funds rate. If it did this, that would likely lead to higher US Treasuries yields. However, this is increasingly unlikely. The US inflation rate was -0.1% in January 2015; and the overall trend has been strongly downward in recent months. If the US Fed tries to raise rates in that environment, it will only cause STAGFLATION. Further a raise in rates would cause the USD to appreciate that much faster; and the appreciation we have seen just since May 6, 2015 is already hurting US exports. It is also spurring foreign imports. Both of these items will tend to act to destroy US jobs, although there may be a lag in the effect. This would act directly against the Fed’s mandate on full employment. Plus it clearly doesn’t need to control inflation through a rate increase at this time, which is the Fed’s main mandate. On top of all of the above, NWE is a well run company that has seen steady growth. Adjusted EPS for Q4 2014 were $2.68 per common share (a +7.2% improvement over Q4 2013). For FY2014 GAAP Net Income was $120.7 million (or $2.99 per diluted share) compared to $94.0 million of $2.46 per diluted share for FY2013 — a 22% improvement. GAAP Net Income guidance for FY2015 is for $3.10-$3.30 per diluted share — a midpoint 7% improvement. This is good growth for a utility. A key factor in NWE’s growth will be the new Hydro facilities purchased from PPL Montana in late 2014. These are eleven hydroelectric generating facilities ( 633 Megawatts ). They were obtained for $900 million. $870 million of that purchase price was added to the rate base with a 50-year life. Return on equity is expected to be 9.8%. The capital structure is 52% debt and 48% equity. This resulted in $400 million in issued equity (7.767 million shares issued at $51.50 per share) and $450 in new debt. The resulting first year annual retail revenue requirement is approximately $117 million. The debt is 30-year first mortgage bonds with a coupon of 4.176%. The all-in cost of the debt was 4.353%. Of this 4.25% is recoverable under the hydro approval granted by the Montana PSC. The transaction closed November 18, 2014. This should be a good new revenue source for FY2015. It should help NWE meet or exceed its guidance. The chart below shows NWE’s recent history of meeting or exceeding its guidance. (click to enlarge) As investors can see, there is a high likelihood that NWE will beat its initial FY2015 guidance. Any upward revisions during the year should help the stock rise. With a 3.67% dividend and an uptrend in the stock price that is almost unshakeable, NWE appears to be about as much of a sure thing as investors can find. When you add the quick recovery it showed from the Great Recession, it makes it even more attractive in a very uncertain market. We have already had six plus years of the current bull market. A bear market may be on the near horizon. If so, NWE may be a relatively good place to be. It will pay you a nice dividend to wait for a recovery in any stock price fall. Another point in NWE’s favor is that Fitch upgraded NWE’s Issuer Default Rating to BBB+ on November 5, 2014. Fitch gave as reasons: The acquisition of the hydroelectric portfolio. The low risk, regulated utility business model. The improved financial and business profile. Its moderating CapEx budget. From a metrics standpoint, the PE of 17.49 and the FPE of 15.34 indicate a currently reasonable price of $52.30 per share as of the close March 12, 2015. The average analysts’ one year price target is only $57.46 per share, but this could easily rise significantly if the new hydro facilities provide a bit more income than has likely been conservatively estimated. The Beta of 0.52 is also a positive in an uncertain market. NWE is a buy with an average analysts’ next five years EPS growth per annum forecast of 7.60%. This is outperformance in the utility industry. The comparable numbers for a few other major utilities are: Consolidated Edison — 2.77% EPS growth, Southern Company — 3.30% EPS growth, and Duke Energy (NYSE: DUK ) — 4.52% EPS growth. There has been no insider selling on NWE. NOTE: Some of the fundamental fiscal data above is from Yahoo Finance. Good Luck Trading/Investing. Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in NWE over the next 72 hours. (More…) The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.