TECO Energy, Inc. (NYSE:TE)

CAPS Rating: 3 out of 5

A holding company for regulated utilities and other unregulated businesses.

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Player Avatar TMFJLo (94.03) Submitted: 4/22/2013 7:07:44 PM : Underperform Start Price: $18.13 TE Score: +15.27

TECO's stock has risen sharply recently as higher natural gas prices make coal more competitive. With 61% of generation capacity coming from coal + 9M tons annual coal mine production, TECO will most definitely benefit in the short run. But I'm making an underperform call because I think TECO might get stuck in a coal rut, where price structures keep it entrenched with coal long after other utilities have diversified and modernized. It might take a while for this to happen, and I'm not positive where TECO's share price will head in the next year, but I'm long on TECO's short. Read a bearish take here: http://www.fool.com/investing/general/2013/04/16/will-natural-gas-destroy-these-dividend-stocks.aspx?

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