Pennon Group is up 12% since it reported its half-year results in November, when the company reported earnings that were broadly in line with expectations. Unlike Severn Trent and United Utilities, roughly 40% of Pennon Group's operations are in waste management.
Last month, Pennon Group was involved in takeover speculation with the Abu Dhabi Investment Authority, which is reportedly interested in acquiring the company and disposing of its recycling and waste management business Viridor. Pennon Group is the owner of South West Water which revealed a 10% rise in its first-half profits, while Viridor announced 26% drop in its six-month profits.
The stock is trading at 782 and is finding support at the 50-day moving average of 751. If the results are good we could target the 800p level.