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Southern Company Will Be Teaming Up With The U.S. Navy And Air Force

Summary Southern Co. and HelioSage are teaming up with the U.S. Military to develop three solar facilities on military sites across the gulf coast. Southern Co. has taken added interest since the end of QE3 in October 2014, hitting new all-time highs in a fighting market. Southern Co. is a stable long-term stock with a respectable 4.02% dividend. Southern Co. is reporting earnings on February 4, 2015. Here we are, three weeks into the year, and we are working our way through earnings. If this is the first time you have read my articles, I am building a portfolio for 2015 that contains all original research. I am digging through SEC filings and considering the state of the economy. So far, I have written articles about seven stocks and my eighth pick is Southern Co. (NYSE: SO ). I am focusing on long-term growth, diversification, and I love dividend stocks. With the uncertainty of the market right now, I have begun each search with a few primary characteristics of each stock. Aside from the economic state, which is driving me towards oil and retail, I am also looking for stocks that popped around mid-October of last year, and that have weathered the January storm. The reason for this is because October was the end of QE and people reallocated their money, and stocks that gained interest in these time frames are a good indicator of where a lot of it went. I believe that some of the stocks that have done well since that time are likely to continue to rise for the time being. This article will take an objective approach to the company, and raise any potential issues. However, upon evaluation, I believe that the market risks are not of immediate concern, but should be considered when deciding whether to invest or not. A Brief Overview Southern Co. is seen as a secure investment because of its customer base. According to its website : Southern Co. is a leading U.S. producer of clean, safe, reliable and affordable electricity, Southern Company owns electric utilities in four states – Alabama Power , Georgia Power , Gulf Power , and Mississippi Power – and a growing competitive generation company – Southern Power – as well as a licensed operator of three nuclear generating plants – Southern Nuclear – and fiber optics and wireless communications – Southern Telecom and SouthernLINC Wireless , respectively. Their clientele is around 4.4 million and they have nearly 46,000 megawatts of generating capacity. Below is some info about the power subsidiaries. Gulf Power Company (Gulf Power) Gulf power has a variety of power generation sources, and has a focus on Carbon Conscious Energy. Specifically, gas-to-energy, wind and geothermal, and solar are highlighted focuses of the company. Any time a company pairs with the government, many opportunities of expansion are created because the military is seen as a reliable customer once commitments are made. Gulf Power just announced that it is partnering with the U.S. Navy and U.S. Air Force to build solar energy farms within its region. The planned implementation date is December 2016; however, in my experience with the military, it is highly likely that this date may be pushed back. If approved, it will still be a large revenue boost, and there will likely be a reduction in operating costs since solar requires less regulation than other options such as nuclear. It will not replace other forms of energy at the moment, but will supplement them. Georgia Power Company (Georgia Power) Georgia power services 2.3 million customers as of December 31, 2013. The majority of the customers are serviced in metro regions, with the fewest customers in Southern Georgia. Total Georgia Power kW Capacity Hydro 1,087,536 Fossil 8,791,427 Nuclear 1,959,852 Solar 705 Other (Diesel, Combined Cycle and Combustion Turbine) 5,746,409 Total 17,585,929 Although solar is the smallest of the generating capacity, Southern Co. has made it clear that solar is one of the focuses of the company as the country moves towards cleaner, safer forms of energy. Georgia power has an initiative called the “Georgia Power Advanced Solar Initiative (GPASI).” 2015 will begin the first year that four Power Purchase Agreements (PPA) will take effect totaling 50 MWs of utility scale solar generation to be purchased by the company. Southern Power Company (Southern Power) Southern Power recently announced plans to develop a 131MW PV solar project in Georgia. The electricity will power 21,000 homes and will be sold to three Georgia electric membership corporations. First Solar will be the engineer and contractor. Plans to begin this project are set for September, 2015. There will be approximately 1.6 million thin-film PV solar modules mounted on single-axis tracking tables. Alabama Power Company (Alabama Power) Alabama Power is the second largest subsidiary of Southern Company and its customer base is approximately 1.4 million homes, businesses and industries in the southern two-thirds of Alabama. There are 24 generating plants that range from Hydro, Coal/Gas, Gas, and Nuclear. The single nuclear plant has a total nameplate generating capacity of 1,720,000 KW. One concern is that with the major earthquake and tsunami that struck Japan, operating expenses may rise once reviews are complete of nuclear facilities in the US. This may result in higher capital requirements and increased costs associated with ensuring safety. Many of the capital expenditures include investments to comply with environmental regulations. Mississippi Power Company (Mississippi Power) Mississippi Power is another subsidiary of Southern Co. that operates utilizing multiple fuel sources. You will notice that the diversification of fuel sources is intentional, so that the distribution of each source can be modified to adjust to current price trends. Lignite, natural gas, and traditional coal are the primary sources of energy with 70% of the customers being fueled by natural gas. Mississippi Power is currently working on a $6.1 billion, 582-megawatt power plant in Kemper, Miss. This has contributed to increases in debt load and the costs have surpassed expectations. It has a coal gasification design called Transport Integrated Gasification. It will tap into lignite reserves, which will reduce shipping costs and stabilize prices in the long term. The progress of this project is important because of the sheer scope and cost. Another important factor will be the recapturing of CO2. The company will need to ensure that this new plant is able to capture the targeted amount (65%) because if there is any excess or does not comply with regulations, it could become a target, upping the cost even more. The projected completion date is mid-2016. The Commonality One common theme throughout all of these companies is the level of debt currently held by the company. The debt level has grown steadily over the past several years. The 2013 annual report reflects a total debt of $23.395 billion. In a low interest climate, this is OK, but this is something they will need to keep under control in a rising interest climate. An important point on their debt though is some of the forms of debt they hold. For example, Alabama Power established a wholly-owned trust to issue preferred securities. The investment in the trust is reflected as other investments, and the related loan from the trust is reflected as long-term debt. This total was $206 million as of December 31, 2013. A tactic used to maintain the control of debt in Alabama Power is through the conversion of long-term debt to short-term debt. While this is not generally a good practice, there are strategic reasons why this could be a good decision. From 2014-2016, the debt maturities are expected to exceed operating cash flows. The solution to this is for the company to take out short-term debts to cover longer-term debts. With the seasonality of the business, this is necessary and while interest rates are low, this tactic will benefit the business. Short-term cash needs are met through the paper program and through a SO subsidiary organized to issue and sell commercial paper at the request of the company. There are very specific actions being taken to ensure debts are taken care of and after their current projects are completed and implemented, the expectation is that some of the debts should decline. In the meantime, it is important to keep an eye on the allocation of their cash flows and how they control their debts. More items to consider are investments that are made to comply with imposed regulations. As mentioned previously, as CO2 emissions gain the attention of politicians, it will affect the operations of companies like SO. Swings in weather are generally good for power companies since colder days or hotter days require the use of either a heater or air conditioning. However, major disasters can have a drastic effect on SO (note the location of the nuclear power plant on the coast). Finally, I mentioned interest rates assisting or hurting their ability to pay off debts, this trickles down to the bottom line and expect EPS to be effected by the rise in interest rates that may come within the next year. Should I Buy It? (click to enlarge) The stock currently has an attractive dividend yield of 4.03% and a PE ratio of 21.4. Currently there are 2 analysts that rate Southern Co. as a buy, 4 analysts rate it a sell, and 8 rate it a hold. A look at the charts from 2014 makes it seem a bit rich for the typical growth of a utility company; however, expanding back to 2010 and before yields more information. A long, drawn out correction from 2012-2014 has given the stock room to grow in the near-term. Southern Co. has been reaching new all-time highs on a regular basis and is trading above both 50 and 200-day SMAs. The future growth will most likely not happen as quickly as the last year. In fact, the stock is due for a correction. While it is currently a bit pricey, the revenue growth has shown superior growth to the industry average of 5.8%. SO is sitting at 6.4%, and as a long-term growth strategy, this could be a promising company to hold for years. The future earnings potential are dependent upon a number of factors mentioned previously and since prices are regulated by the FERC, retail rates may be adjusted as necessary to accommodate the current economic climate. Earnings are due to be reported on February 4, 2015 and this should give a good indicator of where the company will go from here. Regardless of the earnings results, this stock is a wait and see in the short term, but I will buy it for the long term. In the event of negative earnings press, I will wait until after the stock has declined and shown support multiple times before purchasing it. In the event of an earnings beat, I may wait a bit longer until a reasonable correction has occurred.

Stock Traders Flock Back To Gold ETFs

American stock investors and speculators started pouring capital back into gold this week in a serious way, aggressively buying GLD ETF shares. This buying was so massive that GLD had to shunt enough stock capital into physical gold bullion to grow its holdings by their fastest pace in about 5 years. And this is likely just the beginning, as American stock investors remain woefully underinvested in gold and not prudently diversified. Gold surged this week on massive buying from stock investors and speculators. This critical group of traders and their vast pools of capital utterly abandoned gold in the past couple years. So to see them start to flock back is a watershed event, heralding a major reversal in gold’s fortunes. And with their gold exposure remaining near extreme lows, they have vast buying left to do to restore prudent portfolio diversification. Successful investors have always practiced this essential concept of not putting all their eggs in one basket. This great wisdom is ancient, stretching back at least three millennia to King Solomon’s reign in ancient Israel. In the Biblical book of Ecclesiastes he advised, “Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” Portfolio diversification is absolutely critical. Most investors today keep the vast majority of their capital in stocks and bonds, which is fine. But truly wise ones also diversify into alternative investments , which simply mean not stocks, bonds, or cash. Gold has always been the leading alternative asset, largely thanks to its strong negative correlation with the stock markets. Gold thrives when stocks are weak, making it indispensable to managing overall portfolio risk. American stock investors’ preferred vehicle for diversifying into gold is the flagship SPDR Gold Trust ETF (NYSEARCA: GLD ). This is the world’s largest gold ETF by far, and offers some great advantages to stock traders. They can instantly buy or sell GLD shares, gaining or shedding gold exposure, with normal stock-trading accounts. And this is very efficient, with very low transaction costs. GLD’s mission is to track the gold price, which it has done flawlessly since its birth in November 2004. Investors and speculators owning GLD shares get gold-price exposure that’s virtually identical to gold’s underlying price moves. Achieving this mirroring isn’t trivial for GLD’s custodians, because the real-time supply and demand of GLD shares rarely matches gold’s own. That requires GLD to act as a conduit . When stock traders buy GLD shares faster than gold itself is being bought, they threaten to decouple to the upside. That would cause GLD to fail its tracking mission. So its custodians quickly step into the markets to offset that excess demand. They issue enough new GLD shares to supply that differential demand, and then use the proceeds to buy physical gold bullion that is held in trust for shareholders. Thus GLD is effectively a capital pipeline directly linking the vast pools of stock-market capital to gold. Differential buying pressure on GLD shares is quickly equalized into the underlying global physical gold market. So the more capital stock investors and speculators choose to deploy into GLD shares, the faster the gold price rises. GLD shunts stock-market capital into and out of gold, a double-edged sword. When stock traders sell GLD shares faster than gold itself is being sold, this ETF’s price will decouple to the downside. GLD’s custodians must quickly absorb that excess share supply, so they buy back enough shares to maintain gold tracking. They raise the capital necessary to make these purchases by selling some of the physical gold bullion held in trust for shareholders. Stock capital sloshes back out of gold. Even though the world’s gold miners launched this flagship gold ETF via their World Gold Council to increase gold investment demand, conspiracy theorists have long attacked it. So GLD has always been super-transparent. Every single day, it publishes its total gold-bullion holdings itemized down to the individual-gold-bar level including refiners, serial numbers, and weights. This week this list was 1,164 pages long! Watching GLD’s daily physical-gold-bullion holdings data is exceedingly important for all gold investors and speculators. It effectively shows stock-market capital flows into and out of gold itself. When GLD’s holdings are rising, stock-market capital is migrating into gold. When they are falling, it is exiting out. And this week an extraordinary reversal happened likely heralding a major sea change in gold investment. This first chart looks at GLD’s gold-bullion holdings over the past year or so in blue, measured in metric tons. They are superimposed over the gold price rendered in red. Stock investors and speculators just flooded back into gold through incredible differential GLD-share buying in recent days. I’ve carefully studied and watched GLD’s holdings for over a decade now, and I’m just amazed by this serious buying. Last Thursday January 15th, stock traders bought enough excess GLD shares to force its custodians to buy 9.6 tonnes of gold bullion. That grew GLD’s holdings by 1.4% that day, its biggest daily build since August 2011 just before the last major gold peak near $1,900! Stock investors flooded back into gold via GLD shares as gold soared 2.4% following Switzerland’s central bank greatly shocking the world’s markets. The Swiss National Bank suddenly and surprisingly abandoned its efforts to cap the Swiss franc in euro terms. This campaign was launched in September 2011 in response to the Eurozone financial crisis. It was intended to protect Switzerland’s export-heavy economy, keeping products affordable for its dominant Eurozone customers. SNB officials constantly called that cap the cornerstone of their bank’s policy. So traders weren’t ready for the SNB to capitulate out of the blue, it was a black-swan currency event sending shock waves cascading through global markets. Gold caught a major safe-haven bid in Europe on the resulting chaos, and American stock traders piled on. They were way underexposed to gold after years of shunning it, and their heavy differential buying of GLD shares certainly helped propel gold higher. Strong rallies feed on themselves, as nothing begets more buying like fast-rising prices. Stock traders snatched up GLD shares at such a furious pace that its holdings surged 13.7t or 1.9% on Friday the 16th and another 11.4t or 1.6% on Tuesday the 20th. All together over that 3-trading-day span, enough stock-market capital poured into gold via the GLD conduit to catapult this ETF’s holdings up 34.7t or 4.9%! This GLD holdings surge is readily evident above, a radical change from the heavy differential selling pressure GLD shares suffered in late 2014. I couldn’t remember the last time GLD’s holdings rocketed up so fast, so I had to crunch some numbers. This recent buying spree turns out to be GLD’s biggest 3-day build in both absolute and percentage terms in many years, a truly extraordinary buying event. GLD’s holdings hadn’t shot up by 34.7t in 3 trading days since May 2010, 4.7 years ago. That was an interesting time as stock traders migrating back into gold via GLD would help drive the yellow metal a whopping 56.3% higher over the next 15 months. Major stock-market capital returning to gold was a very bullish omen . This was also true the last time GLD saw a 4.9% 3-day percentage build in February 2009. That was 5.9 years ago, right after that once-in-a-century stock panic in late 2008 sucked in gold due to the resulting record U.S. dollar rally . But the subsequent big GLD-share differential buying comparable to last week’s heralded the early months of a major new gold up-leg. Over the next 2.5 years the gold price would rocket 92.4% higher as investors returned! So stock traders flooding into GLD is a major buy signal . As of this Wednesday, the data cutoff for this essay, GLD’s holdings were up 31.4 metric tons or 4.4% so far in January. This is serious buying by any standard. The chart above details GLD’s absolute and percentage holdings builds and draws on a monthly basis since early 2013. And the previous best month over this past year is merely July’s 11.1t or 1.4%. GLD’s January-to-date build nearly triples that! Though I was a few months early thanks to the Fed’s extreme financial-market distortions, I had been expecting stock investors to start returning to gold via GLD in a major way. They had totally abandoned gold in 2013 and 2014 as the Fed’s third quantitative-easing debt-monetization campaign had artificially levitated the stock markets. With stocks doing nothing but rally, demand for alternative investments collapsed. But stock markets are forever cyclical and can’t climb forever, no matter how much paper money the world’s central banks choose to print. So stretched to lofty and very-overvalued levels, it was only a matter of time until they inevitably reversed. And once that got underway, investors would remember the ancient wisdom of prudent portfolio diversification and start rebuilding their extraordinarily-low gold exposure. GLD’s holdings slumped to a miserable 6.3-year low of 704.8t earlier this month. At the prevailing gold price of $1,213, they were worth about $27.5b. Meanwhile, the 500 elite stocks of the S&P 500 had a collective market capitalization near $18,881.7b. Stock investors’ gold exposure can be approximated by comparing their capital invested in GLD shares to their capital invested in the leading S&P 500 stocks. That equates to mainstream stock-investor exposure to gold via GLD of just 0.15%! That is incredibly low by all historical standards. Many of the world’s best battle-hardened investment advisors believe that every investor should always have 5% to 10% of their capital deployed in gold. This is a prudent portfolio-diversifying hedge, an insurance policy that will pay out big when the stock markets decisively roll over. Merely to hit 5%, stock investors would have to up their GLD holdings by a staggering 34.3x! That’s not going to happen, but it illustrates just how chronically underinvested in gold stock investors are today. There is a more conservative read on at least how much stock capital will almost certainly flow back into GLD over the next couple years or so. This comes from just a few years ago when gold’s price last peaked. Back in August 2011 gold surged to $1,894 the last time it was in favor. That was inarguably the time gold enjoyed the most popularity among mainstream investors during GLD’s lifespan. That day GLD’s gold bullion held in trust for its shareholders was worth $78.2b, or 2.8x higher than today’s levels. But with the S&P 500’s market cap only at $10,585.3b then, stock investors’ gold exposure was around 0.74%. While that was a far cry from a basic 5% portfolio allocation in gold, it was still 5.1x higher than stock investors’ gold exposure today. So it’s not a stretch at all to expect stock investors’ gold exposure to gradually return to those gold-in-favor levels in the coming years. Gold will slowly regain popularity as these Fed-goosed stock markets inevitably roll over and lapse into their overdue cyclical bear market. Stock investors will remember the wisdom of prudent portfolio diversification to protect themselves from stock downturns. And no alternative investment is better for this critical mission than gold, thanks to its strong inverse correlation to the general stock markets. The recent serious differential GLD-share buying by stock investors is likely only the start, as they remain chronically underinvested in the yellow metal. This last chart illustrates how much differential GLD buying is still left to go. It extends GLD’s holdings and the gold price back to early 2013, when the Fed’s QE3 campaign and associated jawboning started levitating the U.S. stock markets. As alternative investments fell out of favor, the differential selling that hammered GLD shares was epic. The quarterly draws and builds in GLD’s holdings are shown here. This past week’s serious differential GLD-share buying by stock investors was a radical change, even at this scale. But GLD’s holdings have a long ways left to go to mean revert out of recent years’ extreme selling. Interestingly just days before the Fed more than doubled QE3’s debt monetizations to include U.S. Treasuries in December 2012, GLD’s holdings were at an all-time record high of 1353.3 metric tons. And that certainly wasn’t some anomalous extreme. Back 2.4 years earlier in the summer of 2010, they had hit 1320.4t. They averaged 1238.2t in 2011 and 1294.2t in 2012, and gold was actually suffering a major correction and consolidation throughout most of that span so it certainly wasn’t in favor among investors. So there’s no reason at all not to expect GLD’s holdings to fully mean revert back to those levels. Even after this week’s stunning surge of stock-market capital flowing into gold via GLD shares, this ETF’s holdings still have to climb another 553.8t to regain 2012’s average levels. That’s a staggering amount of marginal gold investment demand, and if it happens within a year or two it will help catapult the gold price dramatically higher. 2013’s epic outlying record plunge in GLD’s holdings puts this into perspective. That year as the Fed seduced stock investors into abandoning portfolio diversification, GLD’s holdings plummeted 552.6t. Nearly half of this extreme selling happened in 2013’s second quarter, which saw gold’s worst quarterly loss in an astounding 93 years! Those massive GLD gold-bullion liquidations that year driven by extreme differential selling helped batter gold down 27.9% in 2013. Imagine that all reversing. If stock investors merely migrate enough capital back into gold through the GLD conduit to regain those 2012 average GLD-holdings levels, gold is going far higher. Its price actually averaged $1,669 that year before 2013’s extreme selling. And with 2012’s correcting and consolidating, those gold levels were certainly nothing special and this metal wasn’t popular among investors. Such levels should easily return. Financial markets are forever cyclical , no trend lasts forever. No matter what money-printing mischief central banks are up to, stock bulls aren’t perpetual. They always eventually yield to subsequent bears. And just as stock markets can’t rise forever, gold can’t fall forever. Major reversals are afoot in both the lofty euphoric stock markets and depressed loathed gold market. Stock investors diversifying will lead the way. Their major GLD differential buying that is coming to help protect their portfolios will greatly accelerate gold’s young new up-leg. And gold’s gains will entice even more stock investors to participate by moving some of their own capital into GLD shares. This process will not only be self-feeding among the stock investors, but it will spawn major new buying in the crucial American gold-futures market as well. It wasn’t just American stock investors fleeing GLD shares that were responsible for 2013’s extreme gold downside anomaly, but American speculators aggressively dumping gold futures. And even though these guys recently reached selling exhaustion and started buying, they have a massive amount left to go to restore their total long and short gold-futures contracts to their normal years’ averages between 2009 to 2012. Stock investors buying GLD shares and futures speculators adding longs and covering shorts will work together to amplify gold’s coming upside. And the longer, faster, and higher gold rallies, the more it will motivate more investors to deploy capital to participate. This week’s incredible differential GLD-share buying is only the earliest vanguard of a major reversal getting underway in gold, it’s very exciting. Investors and speculators can certainly play gold’s big mean reversion higher in GLD shares, that’s the most-efficient and least-risky way. But since GLD’s mission is to mirror the gold price less this ETF’s annual 0.4% management fee, gold’s gains are the best GLD will see. Meanwhile the stocks of the gold miners, which were recently trading at fundamentally-absurd levels, will greatly leverage gold’s gains. The bottom line is American stock traders started pouring capital back into gold this week in a serious way. They bought GLD shares so aggressively that this ETF had to shunt enough stock capital into physical gold bullion to grow its holdings by their fastest pace in about 5 years. And this is likely just the beginning, as American stock investors remain woefully underinvested in gold and not prudently diversified. As the lofty overvalued U.S. stock markets inevitably roll over without Fed money printing forcing them higher any more, gold will gradually return to favor. Stock investors have vast GLD buying left to do to attain even a semblance of portfolio diversification. This massive buying is going to propel today’s low gold prices far higher, earning fortunes for contrarians brave enough to buy in early ahead of the herd. Copyright 2000-2015 Zeal LLC ( ZealLLC.com ) Additional disclosure: I am long extensive gold-stock positions which have been recommended to our newsletter subscribers.

Telecom ETFs To Watch After Dull Verizon Earnings

Verizon Communications Inc . (NYSE: VZ ), the largest U.S. wireless carrier, has come out with lukewarm earnings for the fourth quarter of 2014. While the company managed to surpass the Zacks Consensus Estimate for revenues, it reported in line earnings results. Verizon Earnings in Details Excluding one-time items (pension and other post-employment benefit liabilities), adjusted earnings per share came in at 71 cents, up 7.6% from adjusted earnings of 66 cents per share in Q4 2013. Adjusted earnings were in line with the Zacks Consensus Estimate. Verizon however posted a net quarterly loss of $2.23 billion or 54 cents per share as against a profit of $1.76 per share in the year-ago-quarter, largely attributable to costs incurred for employee pensions and severance. Quarterly revenues increased 6.8% year over year to $33,192 million, beating the Zacks Consensus Estimate by 2%. The year-over-year rise was driven by increased demand for Verizon Wireless and its high-speed FiOS Internet services. During the reported quarter, the company added 2 million postpaid customers as compared to 1.5 million subscribers added in the last quarter. However, profit margins at its wireless business contracted to 42% in the fourth quarter from 47% in the year-ago period. Also, the quarterly retail postpaid churn rate, the percentage of subscribers who switched to another wireless provider, increased to 1.14% from 0.96% in the year-ago quarter. On the wireline side, the company added net 116,000 FiOS video subscribers, 145,000 FiOS Internet subscribers and 88,000 FiOS digital video residence connections. ETF Impact Despite reporting in line earnings results, Verizon’s share price closed roughly 1% lower on concerns of lower revenue growth at the wireless segment, higher churn rate, added customer acquisition costs and provision for pension payment. Investors seem to be worried about the ongoing wireless price war, which might affect margins further. Other telecom players like AT&T (NYSE: T ) and Sprint (NYSE: S ) also fell 0.62% and 2.3% respectively, following Verizon’s uninspiring results. However, T-Mobile (NYSE: TMUS ) rose 1.40% in yesterday’s trading session. Given the mixed reaction from the telecom players, Telecom ETFs closed marginally higher on Thursday’s trading session. Below, we have highlighted three telecom ETFs with the largest allocation to Verizon. Investors should keep a close eye on these ETFs as they might face volatile trading in the days ahead, given that AT&T is also set to report results towards the end of the month. ETFs to Watch Vanguard Telecommunication Services ETF (NYSEARCA: VOX ) The most popular telecom ETF – VOX – tracks the MSCI US Investable Market Telecommunication Services 25/50 Index and holds 31 stocks in its basket. Verizon occupies the top position in the basket with 22.2% of assets. Sector-wise, about two-thirds of the portfolio is skewed toward integrated telecom services, followed by alternative carriers and wireless telecommunication services. The product has amassed $841.6 million in its asset base and charges 14 bps in annual fees. VOX gained 0.65% in yesterday’s trading session and is up nearly 2% in the year-to-date time frame and has a Zacks ETF Rank of 3 or ‘Hold’ rating with a ‘Medium’ risk outlook. Fidelity MSCI Telecommunication Services Index ETF (NYSEARCA: FCOM ) This fund follows the MSCI USA IMI Telecommunication Services 25/50 Index, holding 30 stocks in its basket. Verizon takes the second spot at 21.5% and, from a sector look, diversified telecom services makes up for 81% of assets. The ETF manages an asset base of just $86.4 million in AUM while the expense ratio is 0.12%. The fund has gained over 2% year to date and currently has a Zacks ETF Rank of 3. iShares U.S. Telecommunications ETF (NYSEARCA: IYZ ) This is also one of the most popular ETFs in the broad telecom space with an AUM of $570 million. The product provides investors exposure to 26 telecom stocks while charging 45 bps in fees and expenses. Verizon takes the top spot in the basket with a 12.9% share. In terms of sector exposure, diversified telecom services accounts for 70% while wireless telecom services takes the rest. IYZ is up 1.4% so far this year, and has a Zacks ETF Rank of 3 or ‘Hold” rating with a ‘Medium’ risk outlook.