Greentech is in the midst of its best run, on a weekly basis, since the huge bull advance from spring 2020 into the start of 2021. By our Greentech Timer’s definition, it’s a bull market now. Our benchmark index, the Wilderhill Clean Energy Index, is trading over its 20-day and 40-day moving averages, both of which are trending higher, a condition that started Monday. We’re also seeing the most consistently strong buying volume in Greentech in 13 months. Breadth is excellent. Over the past week, 92% of Greentech stocks are higher – 267 out of the 291 we track – and over the past month 83% are higher. It’s quite a swing in sentiment: over the past three months only 37% of Greentech stocks are higher, even after the past four weeks of excellent performance.
Technically, the extended bear market we’ve been in means there will be bumps along the road higher. Most notably, we still sit below the 200-day moving average, about 15% higher from where we enter today’s trading. That will end up being stout pushback, given that by the time Greentech advances to the 200-day it will coincide with a chart line that was support until January and now forms resistance. There are rarely any perfectly bullish situations, of course. But the roiled world fossil fuel markets have made the many advantages of renewables top-of-mind again – they are a pathway to energy independence, they’re cheaper, and – most importantly though least talked about – they’re essential for the long-term health of people and the planet. Wind, solar, nuclear and water are all bullish. EVs as a group still are laggards, populating much of the underperformers of the recent leg up.
Our Real Money Portfolio is designed to be fully invested at 12 equal-sized positions. We’re at 11 now and have our 12th – IEA – on Buy today.
Advanced Drainage Systems (WMS)
Shares moved decisively over the 200-day moving average last week and have pushed to the top of their recent range. A move through 126 would set shares up to test recent highs around 136, with technicals generally positive for WMS. There’s no news otherwise. We collected an 11-cent per share dividend last week. Our sell-stop is “under 100.” HOLD
Aecom (ACM)
Shares set an all-time high of 79.36 Monday and possibly are getting slightly extended here and could use a breather. The company inked a deal with Dallas-Fort Worth Airport, in a joint venture with a minority-owned construction services firm, to provide civil air services and construction management services. No dollar amount was stated, but DFW is active in expansion and rehab of its terminals. A similar contract Aecom had last decade was worth about $100 million. Shareholders as of April 6 will collect a 15-cent dividend. Our sell-stop is “under 58;” 75 then 78 are resistance. Shares are over support and look generally positive. BUY
Archaea Energy (LFG)
The landfill gas business beat expectations for its fourth quarter, posting sales of $58.4 million and earnings per share of 7 cents. Management sees sales volumes more than doubling this year, to a midpoint projection of 11.4 MMBTU with adjusted EBITDA nearly doubling to $145 million. The figures are likely low, using a reference price that is well below current market prices. Half of Archaea’s 2022 production is locked in on long-term contracts. Wall Street reaction was mixed, seeing capital expenditures as coming in higher for the current year than expected, but overall, Arachaea is executing on its plan. Support should be stalwart around the high 17 area. We’re up about 7% on the trade. Our stop-loss is “under 12.85.” HOLD
Charah Solutions (CHRA)
Charah should report earnings next week – a week later than news services had calculated previously – with a whisper number of $87 million of revenues circulating, above the high end of published Wall Street estimates. Shares continue to tread water in a zone of competing support and resistance levels. Our stop-loss is “under 4,” with a probable sell recommendation from us before shares would reach that level. HOLD
Clean Earth Acquisitions Corp. (CLINU)
The Greentech-focused SPAC is profitable for us given the per-share trust value we can demand back is 10.10, even as the recent unit price is 10. We’ll hear little news until a deal announcement. The next action here will be to split the units when possible. That will be on or about April 15. Units largely are now illiquid, but can be bought at a discount to trust value still. BUY under 10.10
Clearway Energy (CWEN/A)
One of our featured stocks in last week’s issue, the portfolio added Clearway Class A shares at 33.41 Thursday, the mid-point of the high and low for the day. We’re up a few cents on the renewable energy developer/operator. There’s resistance about two bucks above here, with support 2-3 dollars below. BUY
Daseke (DSKE)
The specialty trucker is holding the support line and not seeing a lot of bearish pressure. Our stop-loss is “under 7.19,” which would represent a definitive break of the multiple levels of support. HOLD
Good for Growth Shares, Warrants, Rights (GFGD, GFGDW, GFGDR)
We’re profitable on the shares alone given the $10 trust value (shares are trading at a discount, around 9.70), with the warrants and rights therefore all profit even at their depressed prices (21 cents and 19 cents, respectively). No news, as the SPAC is on the hunt for a merger target. HOLD
Infrastructure & Energy Alternatives (IEA)
One of last issue’s featured stocks, we recommended buying IEA around 12.50. Shares never slipped to that price however, advancing about 25 cents overall. Shares till look strong technically, with signals suggesting a $3 upside here and a Golden Cross due to occur soon, which should draw more interest. We’re shifting our rating from “Buy around 12.50” to Buy. BUY
KraneShares China Green Energy (KGRN)
China’s central government rescued the weak grouping of environmental shares Wednesday, after the government said that it should pursue policies that should “benefit the markets.” That reversed KGRN’s dip lower, building a gap below that is support. Shares are pushed up against moving average resistance here though. Our sell-stop is “under 32.” HOLD
Lithium Americas (LAC)
The company reported earnings last week meeting Wall Street expectations with a loss of 10 cents a share, and a profit of 7 cents a share stripping out discontinued operations and including non-recurring gains. Capital costs for operations in the U.S. and Argentina are seen higher as management seeks to get projects online, but lithium prices seem more than strong enough to justify speed to market and higher costs. Shares have jumped 22% since earnings, with improving volume a, bullish sign. We’re up more than 15% right now. Our sell-stop is “near 22.” HOLD
MP Materials (MP)
We up more than 10% on the producer of rare earth metals. Little news. MP is in an uptrend with long-term resistance at 50 the target to see broken. BUY
Excelsior Portfolio
ADS-Tec Energy (ADSEW)
Little news for the EV charger maker. Warrants are stronger on the week at 1.33 recently, about 20% below our buy price. HOLD
FuelCell Energy (FCEL)
FCEL starts Wednesday pressed up against resistance at the 200-day moving average, a mark that squashed a rally two weeks ago. The company issued a press release in which it said it expects revenue to exceed $300 million in 2025 and $1 billion by 2030. By comparison, sales the past 12 months were $86 million. That didn’t do much for shares – investors likely have some fatigue of far-off sales projections after the SPAC mania of the past couple of years. We’re up 30% on our half-sized position now. HOLD.
Origin Materials (ORGNW)
Warrants are holding steady in the 1.50 area, with no news for the carbon-negative plastics producer. HOLD
Ree Automotive (REEAW)
Ree continues to be a poor performer, with bearish calls on the stock continuing to weigh on shares and warrants. Our warrants are stronger this week at 35 cents, up from 27 last week, but that is still below the average price of a SPAC warrant – 47 cents – which is indicative of the poor job management has done convincing Wall Street of the prospects of its EV chassis. As part of a basket buy of five SPAC warrants last year, our goal is to see the trade through long term. HOLD
ReNew Energy Global (RNWWW)
Warrants are 30 cents weaker this week at a recent 1.70, but not out of the ordinary. The Indian renewable energy producer got some good news in court last week when an Indian judge ruled pricing agreements can’t be unilaterally changed by a utility customer. HOLD
Volta Inc (VLTA.WS)
Volta didn’t hold its earnings call, stating it needs to reschedule after finding it has to restate a prior 10-Q to account for errors in accounting for restricted stock units. The change ballooned the loss for the quarter ended September 30 by $27 million. SPAC accounting restatements are a dime a dozen, it seems, given the rush to get SPACs to market in 2020 and early 2021 and shifting regulatory guidance during that period. So, it’s not reason for a lot of concern, but it’s hardly inspiring of confidence. For the quarter to be announced, expect sales of $12.3 million and a loss of 18 cents a share. HOLD
Thank you for being a subscriber. Our next SX Greentech Advisor issue is published Wednesday, April 6. Our regular updates come in weeks between issues, with the next being Wednesday March 30. Buy and sell alerts also come to your inbox as needed. I welcome your comments, suggestions and questions any time. Reach me at brendan@cabot.net.