U.S. Markets

Corvex's Meister says Exelon stock can rise, calls it a defensive play

BOSTON (Reuters) - Investment manager Keith Meister said on Thursday the utilities sector is a sensible place to invest and pitched Exelon Corp as a favorite idea because it is cheap, well-positioned in its sector and because he expects change at the company.

“The whole space is cheap and Exelon trades at a deep discount,” Meister, who runs Corvex Management, said at the 13D Monitor Conference. He added Exelon to his portfolio during the second quarter and said stock of the Chicago-based energy company could climb by 30%.

Utilities, he said, are not impacted by uncertainty around the Nov. 3 U.S. election and offer defensive protection against factors that would slow growth.

The company could also benefit as investors focus more on environmental issues and gravitate toward electric vehicles and away from coal generation.

Investors prefer pure-play regulated businesses and there is uncertainty around the company’s Exelon Generation, a leading provider of zero-carbon nuclear energy whose profitability is weighing on the company, Meister said.

Exelon’s stock closed at $39.32 on Thursday and climbed nearly 2% in after-hours trading, following Meister’s talk. Corvex owned 2.2 million shares at the end of the second quarter.

Reporting by Svea Herbst-Bayliss in Boston; Editing by Matthew Lewis