YWR: Killer Charts
Disclosure: These are personal views and market commentary, not investment recommendations. For investment guidance seek professional help.
Usually, I look at the YWR Global Factor model for stocks which are working with attractive valuations, but this week I did the opposite. I searched for the Stinkers; stocks with the worst price and earnings momentum globally.
There are lots of Stinkers, but one sector stood out, and it’s surprising because it used to be a darling…. Everyone used to love this sector.
But before we get into the Stinker sector, I have to mention the YWR Investment Summit on September 22-23rd in Chamonix.
At the Summit we are going to pull together a lot of the YWR themes and summarise the non-consensus sectors and stocks where we can make money. We’ll also review the Economy and how we can front run the Robo-Advisors. The point is to end with an action plan.
If you can’t make it to France, it’s OK. I’m going to post the presentations on www.ywr.world.
But there’s a catch. I’m sorry…. you need to be a member for the Summit. If you want you can sign up for just the month. You’ll find it is worth the $10. Please join the club.
I’d like to meet you.
Back to the stand out sector in the Stinkers.
It’s renewables; offshore wind (Siemens Energy, Vestas, Orsted), Plug Power,EDPR, Scatec Solar, Enphase, etc. Aside from First Solar most of the ishares Clean Energy ETF has been terrible and not recovered this year.
Problems in offshore wind have been a particular standout, mostly from higher than expected construction costs disrupting projects.
Siemens Energy is trying to fix their offshore wind business.
Vestas is also having difficulty with the wind business.
Orsted’s impairment and earnings miss was the real doozy.
But Orsted is still excited about the outlook for wind in both Europe and the US.
And this is potentially the longer term opportunity for us.
European wind grows 5X!!!
US offshore wind goes from 0 to 30GW. Onshore grows too.
Amazing that US offshore wind is O right?
The US wind market benefit from the Inflation Reduction Act. We’ll talk about that more below.
But it’s not just wind. Orsted is investing in how to take wind power and make it into hydrogen. They call it P2X.
Hydrogen will be necessary for fertilisers, jet fuel and chemicals.
Orsted will invest in clean hydrogen production centres in Texas and Northern Europe (chemical industry hubs).
It’s interesting that renewables are in the dumps because back in March Goldman was saying how the US Inflation Reduction Act was going to create a US energy revolution even greater than US shale.
If Goldman is right maybe at some point we should be buying these beaten up wind stocks.
Here are the top charts from their report, Carbonomics.