Why This Utility's Stock Rocketed Higher in the Last Days of October
Shares of hybrid trash collector/power company Covanta Holding Corp (NYSE: CVA) were trailing the utility group through most of October. In fact, the stock was only up around 1% when investor sentiment changed abruptly in the last few days of the month. When all was said and done, Covanta ended the month up 8.4%, more than doubling the Utilities Select Sector SPDR ETF's (NYSEMKT: XLU) gain of 3.9%. The big jump came after earnings were announced on Oct. 26.
At first glance Covanta earnings were less than exciting. For example, while third quarter revenues were modestly higher year over year, net income and adjusted EBITDA were both lower. Adjusted earnings of $0.12 a share, meanwhile, were lower year over year by $0.04. Not great, but certainly not horrible in what has turned out to be tough year (see below). Alone, however, those numbers wouldn't likely have led to the shares' notable outperformance.
Image source: Getty Images.
Source: Fool.com