Off Peak

Fortnightly Magazine - May 1 2000
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Will utilities at last see a payoff in telecom investments?

While the price of stock in TNP Enterprises shot up 40 percent in the year ended Feb. 17, Western Resources saw its valuation drop by about the same proportion during that period. Montana Power's stock price climbed 72 percent, while that of NiSource plunged 35 percent.

What accounts for such drastic changes? According to Zach Wagner, energy analyst at Edward Jones, two major trends are evident: merger activity and diversification into telecommunications.

"If you look at a 52-week change in the prices of utility stock, those [companies] being acquired are generally up a lot, and those [that] haven't been acquired are usually in negative numbers," says Wagner.

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