I think this is good news, sort of, for the very troubled wind power sector.
Yesterday, January 3, Equinor (EQNR) and BP (BP) announced that they would terminate their contract and exit the 1.2 gigawatt Empire Wind 2 project off the coast of New York. Why is this good news?
All you have to do to find the high profits that will make the risk of investing in climate change stocks worthwhile is to focus on sectors (1) where the rewards are solid and the risk is quantifiable, (2) where companies are making profit the old-fashioned way by building out networks and then charging high rents to use them, by (3) carefully targeting a few technologies (wind and solar and hydrogen and electric cars) that will be part of any mix of solutions, and (4) by investing in bottlenecks that are likely to drive prices up (and provide good profits for companies that resolve the bottleneck.
A couple of days doesn’t a trend make, but the trading action in European wind stocks has caught my eye in the last week or so. Yesterday, Wednesday, March 30, wind turbine maker Vestas Wind Systems (VWDRY) gained 5.80%. That took the stock to a gain of 4.60% in the past week. The stock is down 2.26% for 2022 to date as of the March 30 close. Wind developer Orsted (DNNGY) was up 3.27% to bring its gain in the last week to 7.71%. The stock is down 3.88% for 2022 to date. With Europe looking to reduce its reliance on imports of Russian natural gas, increasing the region’s wind power capacity is one solution.
The United States will ban imports of oil and natural gas from Russia, President Biden announced Tuesday. U.S. allies in Europe also announced action on the energy front with a plan to cut natural gas imports from Russia by two-thirds in 2022. Even though the White House has said that the long-lead time on the ban would give importers and consumers time to find other sources by the end of 2022, oil futures soared today with the price of West Texas Intermediate, the U.S. crude benchmark, climbing to $126.98 a barrel, up 6.35%, for April delivery as of 12:30 p.m. in New York. International benchmark Brent creek rose 6.52%to $131.24 a barrel for April delivery.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My fifty-ninth YouTube video “QuickPick: Orsted” went up today
I don’t think 2021 is going to be an especially good year for Tesla and it will be tough across the auto industry. That means, if I’m right, that this ETF’s heavy exposure to Tesla (and to Nio) is going to be a drag on what I see as a likely recovery in the wind power stocks Iberdrola, Orsted, and Vestas Wind Systems that all are top 10 portfolio holdings in the ETF. I’d rather play any wind power rally through these stocks–I own Orsted (DNNGY) and Vestas (VWDRY) in my Jubak Picks Portfolio–than though this ETF with its drag from Tesla in 2021. I will sell the VanEck Vectors Low Carbon Energy ETF out of my Jubak Picks Portfolio tomorrow June 3.
Here are my first five stock picks for my Special Report on finding “Real Green” Stocks. These are my “low-hanging fruit” stocks for climate change.
