Russia’s decision to cut the oil it exports to Europe again – it’s now down to about 20% of pre-Ukraine invasion levels – is a sign the country wants to force energy prices higher to break opposition to the war. Higher fossil fuel prices are a long-term positive for renewable utility-level energy in Europe and for EVs there and in the U.S. In the sector right now, there are still lots of headwinds, but Greentech is making some progress. The near-term moving averages, the 20-day and 40-day, are now flat and hinting at turning higher, a sign that the bears may be wearing themselves out. Other signals are mixed but increasingly suggest the lows of May could be the bottom of this market. There remains work ahead to be done – firm resistance sits 15% higher from here and then about 30% higher – but that leaves enough room to potentially see some good trades in leading names. Close in to where the sector is now, we want to see last week’s high of 52 in our Greentech proxy, Wilderhill Clean Energy ETF (PBW) – that would be a break of the downtrend line formed during the November peak.
Real Money Portfolio
Clean Earth Acquisitions Corp. Shares, Warrants and Rights (CLIN, CLINW, CLINR)
No news on the Greentech SPAC, which is searching for a merger. The SPAC market is in a lull, with not a lot of trading in blank checks on the hunt. Warrants are recently at 8 cents, rights at 11 cents. HOLD
Clearway Energy (CWEN/A)
Clearway announces Q2 earnings this Tuesday, August 2, before the market opens. Consensus is for earnings of 44 cents per share. Shares remain range bound, above support in the 31 area and are showing good buying coming when shares sell down. Our sell-stop remains ‘around 28.’ HOLD
Good for Growth Shares, Warrants, Rights (GFGD, GFGDW, GFGDR)
An ESG-focused SPAC, Good for Growth shares are generally trading in the 9.80 region, a typical discount to trust value (10.10) in SPAC shares these days. One trading service registered a trade at 10.30 Tuesday, but it wasn’t enough volume to suggest we can sell at that price. Our SPAC strategy is to recoup a slight profit on our invested capital either by selling the shares above trust value or collecting the trust value as the SPAC progresses. GFGD rights are at 12 cents and warrants at 8 cents, both typical of a SPAC still seeking a merger. HOLD
Li Auto (LI)
A recommended buy in our July 20 issue, this Chinese EV maker was added to the Real Money Portfolio Thursday at 36.01, the midpoint of the high and low for the day. Li has weakened along with other Chinese automakers the past week, as competitor BYD had to shut down its factory again due to Covid fears, but the picture remains good for both domestic China EV incentives and Li’s own manufacturing and sales efforts. LI stock is on near-term support here. We’re going to set a sell-stop at below 26.68, which would erase gap support and signal that shares have sliced through multiple levels of support. BUY
Montauk Renewables (MNTK)
The renewable natural gas producer is just on the wrong side of its 200-day moving average of 10.93. We want to see shares establish themselves with a couple of closes over 200 before we add shares. The company will report earnings on August 9. WATCH
Natural Grocers by Vitamin Cottage (NGVC)
NGVC remains in a tightening zone of resistance and support, now between 16 and 16.61. It looks unlikely we’ll see a breakout up or down before earnings are reported next Thursday, August 4, after the market closes. Consensus looks for 20 cents a share earnings. WATCH
Ormat Technologies (ORA)
ORA looks like it’s gearing up to challenge a resistance point at 85.60, the price we’re watching to see shares break before we buy in a chart-driven approach. On Wednesday, August 3 the company releases earnings after the market closes. Expectations are for 20 cents a share earnings. WATCH
Vertex Energy (VTNR)
VTNR slipped last week when the CEO sold about 13% of his position. We don’t place a lot of weight on insider selling compared to buying – there are lots of reasons to sell, only one reason to buy. The drop in shares came on a light volume day, so its importance shouldn’t be overstated. Shares look fine at current levels. Vertex reports earnings August 9 before the open, with consensus seeing $1.24 earnings per share. HOLD
Excelsior Portfolio
ADS-Tec Energy (ADSEW)
Our warrants are firming up again, trading around 97 cents of late, up from 90 cents last week. The German EV charger maker is about due to release quarterly earnings, but no firm date has been announced. HOLD
Altus Power (AMPS/WS)
Warrants are at 1.33, 28 cents over our buy price. The industrial and commercial building solar installer/operator will report earnings before the market opens on August 15. There is no consensus call on Wall Street; we’re looking for the business to stay on track to generate $120 million in sales, which means this quarter and the next two need to average about $33 million. GAAP income will probably be helped by the lower cost of shares and warrants, which due to accounting from the SPAC merger can muddy the long-term picture. HOLD
Constellation Energy (CEG)
The company will report earnings before the open of August 4, with 55 cents per share earnings expected. Shares have held support at 53 and therefore would be inclined to rally should results be positive. Little news, which is probably positive for an energy provider in the height of summer heatwaves. HOLD
ESS Technology (GWH.WS)
Q2 earnings will be announced August 11, after the close of trading. Everyone wants to see revenue recognition on installed units in San Diego, which has been delayed due to peculiar contractual goalposts management hasn’t fully detailed. Warrants are about unchanged on the week at 45 cents, and since our investment thesis as detailed in the May 18 issue remains intact and the price is more advantageous, our rating remains at Buy. BUY
FuelCell Energy (FCEL)
FCEL is weak but remains range bound. Fuel cell stocks need Greentech to turn bullish to see investors come back in. Little news. HOLD
Origin Materials (ORGNW)
Origin inked an offtake agreement to sell carbon black into the synthetic rubber industry with a supplier in that segment. It also will work with Revlon to produce environmentally friendlier packaging. All these deals are potential revenue generators, with nothing contractually guaranteed yet, though Origin has gathered a multi-billion-dollar off-take portfolio that should power operations for years to come. Management will announce quarterly results ahead of the open on August 3, with expectations for a loss of seven cents per share. More importantly is management continuing to report the opening of its first carbon negative plastics plant is on track for Q4 this year. HOLD
Ree Automotive (REEAW)
Tomorrow, Ree will host an investor event in Michigan for a walk-in van it will build with the EAVX division of Morgan Olson, an established delivery truck maker. Interested folks can register to view the event on webcast through Ree’s investor relations site. Warrants remain flat at 14 cents of late, a small positive. HOLD
ReNew Energy Global (RNWWW)
ReNew released its annual report for the year ended March 31 – the financials had previously been released so the report has little effect on trading. The company does face some uncertainty from potentially having to bury power lines in environmentally sensitive areas, by court order though it’s unclear whether they’ll actually have to do it. Warrants are weaker this week at 1.17. Shares are in a downtrend and need a catalyst to reverse sentiment. HOLD
Volta Inc (VLTA.WS)
The EV charger maker will install 25 EV chargers in Hoboken, New Jersey, doubling the company’s screens (from 50 to 100) in the New York City area. Volta aims to generate most of its value from display ads on its chargers. The exposure in Hoboken, which isn’t paying Volta anything, should help with Wall Street sentiment – the city, across from lower Manhattan, is home to many Wall Streeters. Warrants remain weak, at 39 cents recently. HOLD
Thank you for being a subscriber. Our next SX Greentech Advisor issue will be published Wednesday, August 3. Weekly updates will come every non-issue Wednesday, and any timely notices get distributed as needed. Get in touch with comments, suggestions and questions any time. Reach me at brendan@cabot.net.
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