Looking at the weekly charts, last week created some damage, technically. The S&P 500, tech-heavy Nasdaq 100 and the Greentech ETFs all gapped lower with last week’s action. A price gap typically creates resistance, and the pushback here is made even sturdier because the gap coincides with the 40-day moving average for Greentech (the S&P and Nasdaq 100 are well below their 40-day averages today). That means that even while we’re looking at posting the third straight up-day in the Greentech sector for the week, it’s not a time to get overly optimistic.
The one bright spot is solar, which is holding support of its 40-day average on the strength of the suspension of tariffs on panel imports from various countries. That helps domestic residential and utility installers, as well as related businesses, such as microinverters, load control and photovoltaic hardware. There is fairly substantial chart resistance about 10% above solar stock prices today, but it is relatively better than water, wind, nuclear and EVs, which are all bearish. There are some other positives: the Greentech universe (about 295 U.S.-listed stocks) has shown largely neutral price action the past week, with few significant gainers or losers compared to a week ago, potentially a sign of some stabilization. Over the past three weeks, too, growth stocks in general, as represented by the main Nasdaq 100 ETF, the QQQ, are in a near-term uptrend while the S&P continues to push downward. This divergence could be an early sign money is starting to flow back into growth stocks.
Real Money Portfolio
Clean Earth Acquisitions Corp. Shares, Warrants and Rights (CLIN, CLINW, CLINR)
The SPAC remains on the hunt for a merger target. We bought the units at 10.01, a discount to the 10.10 trust value, which the shares (recently at 9.87) have claim to. That means we can’t lose money on this trade. The warrants (14 cents) and rights (19 cents) are quite weak, but not unusually so for an open SPAC these days. HOLD
Clearway Energy (CWEN/A)
Clearway approached our sell stop of “around 28” late last week but have ticked upward since. Last week’s action did put it below resistance, so a move to 31-32 would be a positive. We received a per-share dividend of $0.3536 a week ago. Little news. HOLD
Darling Ingredients (DAR)
We recommended selling Darling in our issue delivered to subscribers before the open last Wednesday, after DAR settled below our sell stop of “below 73” and didn’t rebound. The portfolio booked the sale at 73.06, the midpoint of the high and low of June 15. Shares have since fallen further, to around 66 recently. SOLD
Good for Growth Shares, Warrants, Rights (GFGD, GFGDW, GFGDR)
The portfolio bought the SPAC units at 9.97, a three-cent discount to the trust value the shares now have claim to. That means we can’t lose money on this trade if we have patience to see it through. Warrants at 11 cents recently and rights at 12 cents are quite weak, but about par for the course for current SPACs. HOLD
Montauk Resources (MNTK)
Our featured stock last issue, as a “Watch,” the biodiesel maker has plunged today, down about 12% to under 12 midday Wednesday. The gas tax holiday appears to be throwing some confusion into the ramifications for the taxes that help support the renewable fuels program. There are also signs high gas/diesel prices have dampened overall demand for fuels. Let’s continue to watch and see how the policy shakes out. WATCH
Natural Grocers by Vitamin Cottage (NGVC)
The western organic grocery chain has just about retreated to the 200-day line, where we may want to consider adding a position. Technicals still suggest some more downside here. Little news. WATCH
Vertex Energy (VTNR)
A tour given to a Credit Suisse analyst last week indicates that Vertex will start producing renewable diesel a bit earlier from its Mobile refinery, late this year, as opposed to the start of 2023 and scale it larger sooner than expected. One interesting wrinkle the Credit Suisse report revealed is that Vertex won’t be exiting the fossil fuel business; instead, once the renewable diesel operation is up and running, the rest of the facility will sell a crude-oil-derived pre-gasoline known as VGO to other refiners. We prefer not to own majority fossil-fuel-asset companies in the Greentech portfolios and we’ll need to evaluate the overall business split between renewables and fossil fuels later. VTNR is down from our buy price, but appears to be exhausting the move lower. BUY
Excelsior Portfolio
ADS-Tec Energy (ADSEW)
Shares are down sharply today while the warrants are up sharply to a recent 62 cents on good volume. Little news. We speculate share sellers are reacting to the gas tax holiday under consideration as affecting the EV ecosystem, while warrant buyers see a greater likelihood of warrants becoming exercisable in the next few years on a mostly positive brokerage report this week. HOLD
Altus Power (AMPS/WS)
Altus will join the Russell 2000 Index Friday. Addition to the Russell will add support to shares – there’s about $60 billion in ETFs indexed to the Russell 2000 and a much greater amount “shadow indexed” to it. That means there are actively managed funds that use the Russell 2000 as their benchmark and these funds will largely reflect the holdings of the Russell to avoid the risk of vastly underperforming the index. We’re up about 60% on the warrants. Our trade aim is to benefit from the price gains in the warrants as shares improve, given the exchange values placed on them by a company option to convert warrants to shares when shares, at 7.44 recently, trade over 10. HOLD
Constellation Energy (CEG)
Nuclear stocks have had a rough June, surrendering about 11% as a group. Constellation has performed about that but has rebounded of late and looks to hold over support today. HOLD
ESS Technology (GWH.WS)
We own the warrants of the iron-flow storage maker as part of a long-term trade on the current price of warrants and the conversion ratio if and when shares trade more than 10. The warrants are at 44 cents today, and share are weak in the mid-3 area. The bet here is, like Altus, shares will move over 10 by 2026, making our warrants much more valuable by nature of the company-stated conversion rate of warrants to shares over 10. BUY
FuelCell Energy (FCEL)
FuelCell is stronger this week but still in a longer-term downtrend. The still-to-come booking of mandated sales to Korea’s Posco this year will improve sentiment. HOLD
Origin Materials (ORGNW)
The company remains on track to open its first carbon-negative plastics plant in Ontario this year. Origin announced a capacity reservation agreement with Kuraray, a Japanese plastics maker, in which Kuraray will purchase intermediate materials from Origin to develop its own carbon-negative plastics. No financial terms were disclosed. Warrants are basically unchanged on the week at 1.10. HOLD
Ree Automotive (REEAW)
Ree remains weak. Warrants are at 20 cents, shares at 1.55. Little news for the EV chassis maker this week and nothing of consequence may happen before 2023. HOLD
ReNew Energy Global (RNWWW)
ReNew shares slightly lower on the week. Warrants are unchanged on the week at 1.15. Renew is India’s largest renewable energy operator/owner. HOLD
Volta Inc (VLTA.WS)
Volta announced that it has installed EV charging stations at 16 Kroger (KR) grocery stores in the Atlanta area and will add chargers at Kroger locations elsewhere through the year. A key part of Volta’s strategy is to use its EV charger display advertising capability to drive sales at nearby retailers and collected a premium from advertisers as a result. Kroger should provide a good proof of the concept. HOLD.
Thank you for being a subscriber. Our next SX Greentech Advisor issue is published Wednesday, July 6. Weekly updates will come each Wednesday, with any timely notices as needed. Get in touch with comments, suggestions and questions any time. Reach me at brendan@cabotwealth.com.