Entergy's Decision to Drop Trading Baffles Many

Still, Dwivedi is not surprised by Entergy's decision to end a trading venture that already has lasted longer than some.

"As with many trading businesses, Entergy-Koch has the tendency to dominate discussions about Entergy," he wrote. And, "in our view, Entergy-Koch has been a source of valuation drag. Many utility investors are still not comfortable with energy trading as a business, and most are not willing to pay much for trading-related earnings."

Investors didn't exactly celebrate Entergy's decision to exit the business, however. The company's stock fell 1.6% to $53.86 after the news was announced on Tuesday. It was down another 1.1% to $53.25 on Wednesday.

Still, most analysts recommend buying or at least holding the shares.

Prudential has stopped covering some other energy companies altogether, however. The research firm announced late Tuesday that it has withdrawn its recommendations for a number of integrated utilities -- including Duke (DUK - Cramer's Take - Stockpickr), El Paso and Williams (WMB - Cramer's Take - Stockpickr) -- because its senior industry analyst, Carol Coale, has resigned. The firm said that its latest recommendations for the stocks, most of them neutral, "should not be relied upon going forward."

Like many, Coale struggled to predict both the meltdown and the rebound in the merchant energy sector. She did offer a late call to sell Enron before the stock wound up worthless. But she also warned investors to shed Dynegy -- when it was less than $1 a share -- before dropping coverage on the company and essentially leaving it for dead. Dynegy, down 3 cents to $4.15 on Wednesday, went on to become one of the top gainers in the market, although the company still faces clear challenges.

For its part, Prudential has described the hole in its coverage as temporary.

"Carol has decided to take some time off from the business and has resigned from Prudential Equity Group," the firm explained when questioned by TheStreet.com this week. "We are committed to the sector she covered and intend to resume coverage of that sector as soon as we responsibly can."