Greentech is still bearish, but a 12% rebound from the lows of last week gives us the feeling that things are stabilizing. Our sector is being helped by very good earnings results in solar and renewable-energy related semiconductors, which clearly are easing various investor fears. We still have some ways to go before we can say Greentech is bullish, but it’s a start. Right now, the sector is testing near-term moving averages to the upside in an effort to start unwinding the bearishness. It’s a good time to be cautious still, but seek out opportunities.
We have one sell that you must execute in the next couple of weeks. Our Navitas Semiconductor warrants are being redeemed and they have to be sold to avoid being cashed out at 10 cents each. We also are shifting our China-listed environmental stocks ETF to Buy. More below.
Real Money Portfolio
Advanced Drainage Systems (WMS)
The company reported mixed third-quarter estimates relative to consensus, missing on EPS, netting 86 cents compared to 91 cents consensus, but beating on sales by 10%, at $715 million revenue. Demand, backlog and pricing power are all said to be strong for the year ahead. Management will pay a dividend of 11 cents a share to shareholders of record as of March 1. More significantly, the company will buy back $1 billion worth of shares – about 12% of the market cap – over the next few years. Shares are around long-term support now. We don’t have a firm sell-stop on right now. HOLD
Archaea Energy (LFG)
No news this week and shares are struggling with resistance up through 17.50, but they continue to hold up well. Our sell-stop is ‘under 14.’ BUY
Charah Solutions (CHRA)
We moved Charah off the Watch List and to a Buy last week. The portfolio added shares at 5.22, the midpoint of the high and low of last Thursday. We’re holding support a little weaker this week, at 5.03. We may be in for some near-term weakness here, but shares continue to look fine. We have no firm sell-stop right now, but suggest a wider-than-usual berth, to about 4.10. Moves as large as 76 cents would be normal by volatility measures. BUY
Daseke (DSKE)
One of two featured stocks our last issue, we added the specialty transport business to the portfolio last Thursday at 11.23, the midpoint between that day’s high and low trades. Shares look to be in great shape, having enjoyed two previous weeks of strong buying volume. Various technical approaches suggest a strong move is ahead. Nothing is ever guaranteed, of course, but Daseke is the strongest stock, technically, in the Greentech universe right now. BUY
The Growth for Good Acquisition Corp. (GFGDU)
The portfolio added units of the ESG-focused SPAC Thursday at 9.97, the midpoint of the high and low for the day. Each unit consists of one share, half a warrant and a right, with 16 rights equaling one share at any business combination. The recent price of units is a penny weaker, but the trust value of each share remains $10. Warrants are at 31 cents and Rights are 17 cents each. That puts us up almost 2% on the trade, or 1.6% if you had to sell on the market today. To maintain maximum flexibility and to execute our strategy with this SPAC unit, you need to request through your broker to now split the units into their components. At current prices the units, if available, remain a Buy. BUY
Heritage-Crystal Clean (HCCI)
Shares seems to have found support in the mid-27 area. They’re still below resistance and aren’t Buys yet. WATCH
KraneShares China Green Energy (KGRN)
Rating Change: From WATCH to BUY
Asia’s best performing cleantech funds are actively buying Chinese environmental stocks in expectation that the country’s long-term policy will support the industry. This ETF is primarily China-listed, China-focused Greentech stocks. Long-term, we want exposure to China as the country pushes toward de-carbonization. With China moving toward bifurcating the stock world to China and everyplace else, we’re going to buy here with the hope of holding for the long-term. It also appears shares are bouncing off support at 38, which we had been wanting to see. We’re changing our recommendation from Watch to Buy. BUY
Lithium Americas (LAC)
Shares are testing resistance at 28 this week and have pushed over to start today. Overall, they have shown a good move back from the recent lows close to 24. Chart-wise, support is at 22, resistance at 28-29 and then in the 33 area. The long-term trend is up. BUY
Excelsior Portfolio
ADS-Tec Energy (ADSEW)
SPAC warrants are generally quite weak as investors have shied away from growth plays of late. Our fast-EV charger warrants are no different, with ADS-Tec trading weaker this past week. Near 75 cents today, we feel one could add to the position here, knowing ADS-Tec has more than 4.5 years to prove its case to the market and boost our warrants. The company continues to show progress, however, with Austria utility Energie Steiermark exploring deploying ADS-Tec chargers throughout the southern Austrian province of Stryia. It isn’t said how large the deal may be, but the utility has had two ADS chargers in front of its headquarters in Graz for the past year. HOLD
FuelCell Energy (FCEL)
Hydrogen and fuel cells remains a quiet sector of late. FuelCell Energy will report earnings in March, leaving a potential few weeks to wait for a catalyst. HOLD
Navitas Semiconductor (NVTSW)
Rating Change: From HOLD to SELL
We need to sell the balance of our holdings. The company has issued a mandatory redemption of the warrants, and if we don’t sell before March 7, the warrants will be retired at just 10 cents each. Fortunately, warrants are slightly over our buy price and we should have a few days of volume and price support to get out. However, warrant prices will begin to degrade as we get closer to the redemption date. We sold three-quarters of our position in mid-November at 6.68, booking 160% profit on that portion. If you still want to own Navitas, we recommend closing out the warrants rather than converting and looking for an entry point into the shares. SELL
Origin Materials (ORGNW)
Origin will collaborate with Pennakem, a specialty chemical company out of Belgium, to “industrialize carbon-negative chemicals and materials.” Presumably this will lead to revenue of some sort, but there are no details. Announced warrants are slightly strong on the news this week, at 1.07 recently. HOLD
Ree Automotive (REEAW)
Warrants continue to be out of favor as the EV chassis maker continues to be pre-revenue. We have plenty of time to see this position through. HOLD
ReNew Energy Global (RNWWW)
The company will buy $250 million of shares in the open market, using money from a recent asset sale. ReNew also said preliminary third-quarter results generated revenue of $183 million and adjusted EBITDA of $11 million, which we can’t back out to GAAP EBITDA due to lack of disclosure with the preliminary numbers. Warrants are basically unchanged on the week. Shares are around 6. There is a clause allowing for redemption of warrants if they trade at 10 or higher for 20 of 30 days. HOLD
Volta Inc (VLTA.WS)
The U.S. EV charging company announced it has modest installations of charges in France, Germany and Switzerland, which shows its new European effort has some legs. On a percentage basis, warrants are up strongly the past week, to 1.52 recently, from around 1 last week. HOLD.
Thank you for being a subscriber. Our next SX Greentech Advisor issue will be published Wednesday, February 16. Please send along your comments and questions anytime to me at brendan@cabot.net.