Inflation fears clipped growth stocks this week, so Greentech’s near-term outlook has gotten muddied a bit. Our benchmark index is in a support zone right now, having opened below the 200-day moving average this morning but over the 40-day. With the market closed tomorrow and having a 1pm close Friday, we could see some weakness into the holiday as people look to close out positions to take a long weekend given the recent iffy action in growth. Nevertheless, the fundamentals are good and technically, there remain a lot of positives sparked by the recent infrastructure bill. The larger, 10-year spending Build Back Better bill seems closer to being passed, too, which sets the sector for more tailwinds. There is generally little news in our portfolio companies this week, which isn’t unusual for Thanksgiving. For now, maintain up-to-date sell stops to weather this week’s easing.
Real Money Portfolio
Aemetis (AMTX)
Aemetis is sitting on top of our stop-loss but on more meandering action that bearishness. Taking the ~18% profit here wouldn’t be a bad decision – talking profts rarely is – but we’re going to loosen the stop back to the 200-day moving average, which is also right near our buy price, since price internals suggest AMTX is due to turn upward soon. We’re also waiting for formal announcements of more renewable fuel off-take agreements that management indicated would come soon. Lower sell-stop from ‘around 17.50’ to ‘under 15.’ As a reminder, we prefer to execute sell-stops based on closing, rather than intraday, prices. BUY
Aptiv (APTV)
We recommended buying Aptiv off our Watch list with last week’s issue and the portfolio added a position Thursday at 177, the mid-point of the high and low of the day. We’re setting our initial sell-stop ‘near 151,’ which is below the 200-day moving average and into zone where support should come in, if we fall that far. BUY
Array Technologies (ARRY)
One of our featured stocks last week, we added a position at 25.38, the midpoint of the high-low prices of Thursday. The recent market weakness has clipped us a little, but it’s coming on light volume. A convergence of support suggests 21 should be a floor and we’re going set our sell-stop at ‘under 21.’ Company CEO Jim Fulsaro announced he will retire at the end of 2022. BUY
Aspen Aerogels (ASPN)
Aspen Aerogels continues to hold up nicely, showing little sympathy effects with the broader growth stock pullback this week. Our sell-stop is ‘under 48,’ which would be a notable break of the 40-day moving average. BUY
Centrus Energy (LEU)
In last week’s issue, we recommended taking partial profits, taking half the position off the table, purely on the specter of a short-term downturn that has materialized. The portfolio booked a 105% profit on the half we sold, at 68.7, the midpoint between the high and low of Thursday. The chart suggests LEU is due to turn higher again soon after giving up another four points from that level. We have a hold on the remaining half of the uranium refiner, with a stop-loss of ‘near 51.’ Yesterday the company successfully completed its plan to redeem all of its Class B shares, which had been paid a special dividend. It’s paying about $42 million to shareholders; we like removing the overhang of dividend payments and the potential common share float the B shares represented. SOLD HALF, HOLD HALF.
Enphase Energy (ENPH)
ENPH looks good, but has advanced so quickly from our buy price of 228.73 that it is due to pause or step back and let the moving averages catch up. That’s probably what we’re seeing now. At a recent price of 247, it’s on near-term support, with additional support at 216, 207, 196, and the price gap that closes at 190. Our sell-stop is loose so we can stay in the long-term trade of U.S. solar demand. BUY
ESS Tech (GWH)
The other featured stock of last week’s SX Greentech Advisor issue, we recommended buying the long-duration energy storage business under 15, an opportunity that presented itself immediately. The portfolio booked in GWH at 14.97, the midpoint between the high and low prices Thursday. A recently closed SPAC deal, GWH is going to be volatile as arbitrage hedge funds do their usual shifting in and out of the stock. For that reason, we also recommend a loose sell-stop here, ‘near 11.’ Performance still shows a very good Relative Strength to the broad market, and shares should find support well before then. BUY
KraneShares China Green Energy (KGRN)
The mostly China-listed Greentech stock fund continues to be range bound, with a ceiling of 49 and action that has us suspecting a better entry will present itself than today’s price in the 48 area. WATCH
Onsemi (ON)
ON has stepped back just a little from the recent all-time high of 63.34 (closing basis) reached last week. Around 61 today, it’s not even testing support levels and has us up about 37% from our buy price. Our sell-stop remains ‘under 50’ (avoid a sell stop right on this price). BUY
Wolfspeed (WOLF)
We were waiting for WOLF to dip under 130 to buy, which it did last Wednesday and after. For portfolio purposes, we’re treating it as a limit-order filled at 129.99. If you’ve waited to buy, there’s an even better price available now, as shares has backed down to 123 today. There are many levels of support below the stock here, and WOLF is performing more like a typical easing from an overbought condition than any major change in the technicals. We’re setting our initial sell-stop at ‘under 107,’ which is a slightly larger potential loss than we prefer to risk, but indicates some support levels above have been broken. BUY
Excelsior Portfolio
European Sustainable Growth SPAC / ADS-Tec Energy (EUSGW)
Little news for the SPAC and its German EV charger merger target ADS-Tec Energy. Warrants are perking up this past week, hitting a high of 2.88 before falling back to the 2.20 area today, roughly a 33% gain on our position. The SPAC deal has yet to close, so the warrants are likely still a good way to trade this company’s debut, with the risk the merger may not happen. BUY
Li-Cycle (LICY.WS)
Warrants have eased 15% this week on typically volatile action, but they remain in the 3.50 area today, a 45% gain for the portfolio. The company has the option to initiate a cashless redemption if shares trade at $10 or greater for 20 of 30 days and they haven’t traded under 11.89 the past month. For that reason, we don’t recommend buying the warrants any longer. We likely are sellers when the redemption is announced. HOLD
Navitas Semiconductor (NVTSW)
Navitas remains strong, with our warrants trading around their theoretical maximum value of 6.50 today. That’s the maximum because they are redeemable when the underlying shares trade at 18, with an exercise price of 11.50. We sold most of the position early last week with a special bulletin, booking a 160% gain on three-quarters of the original position. We’re up about 150% on the remainder we hold. Given the redemption clauses if shares trade above both the prices of 18 or 10 for 20 of 30 days, we’re holding the balance and looking to sell on additional spikes above 6.50, which isn’t atypical of SPACs. MOST SOLD; HOLD REMAINDER.
Origin Materials (ORGNW)
We’re underwater on the net-zero-carbon plastics maker, having bought at 2.43 and warrants trading at 1.81 today. More investment banks are initiating coverage on Origin, which is a positive because it gets the company’s story into investor minds. Shares are trading in the 7 area, while warrant prices imply shares “should” be over 13. SPAC-derived securities often don’t trade logically. Our belief is that, long-term, Origin’s plan to make plastic from biomass feedstock, instead of petroleum, will pan out. HOLD
Ree Automotive (REEAW)
Ree is the weakest of the original six SPACs we bought as a basket this summer, which is every holding in the Excelsior portfolio but EUSG. Our strategy is that it’s likely one or two would be big winners and one SPAC of the bunch could be a dud, and it’s possible Ree is the latter. We remain unsettled by the large stock-option expense management reported last week as it loads up on engineering talent – $400 million in the last quarter and some $60 million expected this quarter. The warrants have the better part of five years to pay off for us, and we retain enough faith in the company’s long-term EV chassis design to stick with it for now. Warrants are around 73 cents today, compared to our 1.10 purchase price. The underlying shares are around 3.85. HOLD
ReNew Energy Global (RNWWW)
ReNew is weaker of late, probably due to India’s demand that coal retain a place in global energy commitments during the recent global environmental summit. As India’s largest renewable asset owner and operator, ReNew benefits greatly from Indian solar and wind demand. That will be sizable in any case. At a recent 1.85, we’re still up about 25% on the warrants. HOLD
Volta Inc (VLTA.WS)
Volta has backed off rally it experienced after the Infrastructure bill passed, with our warrants at 3.00 today after a peak of 4.50 a couple of weeks ago. That’s still a 35% gain. The EV charger company continues to announce a steady stream of generally small sales showing it is executing on its plan to place chargers with display ads at high-visibility properties. This past week, it announced a deal for chargers at three CBL properties, a company which owns 99 developments nationally, mostly open-air malls. HOLD.
Thank you for being a subscriber. Our next SX Greentech Advisor issue is published Wednesday, December 1. We will send a special bulletin with any interim recommendations. Contact me anytime with questions or comments at brendan@cabot.net.
Have a happy and healthy Thanksgiving.