Equities suffered a brutal first half amid the global energy crisis, and the nightmarish scenario appears nowhere near over. On August 31, Russia completely shut down its gas supplies to Europe via the Nord Stream 1 pipeline for the second time this year. Energy prices were the primary force, driving inflation to a new high of 9.1% in the Eurozone, up from 8.9% in July.
“The energy crisis brings a huge amount of unknowns and concerns in the market,” said Clive Burstow, Barings’ London-based head of global resources. “High prices are driving inflation and pushing industrial capacity offline, which is worsening an already constrained supply chain.”
The surge in power prices and threats to supply are affecting businesses from China to the US, leaving investors with a challenge to figure out where to put their money. While the crisis has dampened profits and revenues for many names, some tickers stand to benefit in the wake of Russia’s unreliability to supply Europe with gas, if you know where to look. In this article, our team examines three of our top choices from areas of the market that are bucking the downward trend.
The U.S. Economy is headed for trouble…
Why are stocks absolutely soaring right now…? Yet at the same time millions of Americans are out of work… Commercial bankruptcies are piling up… Delinquent credit card debt is skyrocketing… Not to mention, we are smack in the middle of a pandemic that has all but forced our economy to a grinding halt… Something’s just not adding up. Friend, if you are confused by all of this… You are not alone… [Full Story]
Oil and gas prices spiked earlier in the year due to Russia’s invasion of Ukraine and could spike again into 2023 due to the energy crisis in Europe this winter and reserve concerns. Energy stocks have dramatically outperformed the broader market, as evidenced by the 79.9% gain over the past six months for the Energy Select Sector SPDR ETF (XLE).
The International Energy Agency (IEA) expects global energy demand to increase by more than 30% by 2035. APA Corp. (APA) is one of the few oil and gas exploration and production companies offering exposure to the meteoric rise in gas prices.
In the second quarter, APA saw $3.05 billion in total revenue representing 71.3% year-over-year growth with strength across oil, natural gas, and natural gas liquids (NGLs). Adjusted earnings grew 205% from the prior-year quarter to $811 million. Adjusted EPS increased 239% from the prior year to $2.37. Analysts expect Q3 revenue to be $2.63 billion, indicating a 59.2% year-over-year increase. APA’s earnings are expected to increase 145% year-over-year to $2.40.
MKM Partners analyst Leo Mariani recently raised the firm’s price target on APA from $45 to $50, citing international natural gas prices having reached all-time record levels driven by the cut-off of most Russian gas into Europe as well as outages and maintenance on a few major global LNG facilities around the world.
The 29 analysts offering recommendations mostly agree with Mariani. The stock garners a Buy rating and a $54 median price target, representing a 48% increase from the current price. With a low TTM price-to-earnings ratio of 4.5, APA seems like a bargain against peers.
Bezos, Musk, and Yellen Planning Behind the Scenes [$150 Trillion]
While most Americans were distracted by mainstream media headlines predicting a stock market crash…
PhD Investigative Journalist Nomi Prins found evidence that shows the elites are spending trillions of dollars to “transform” the economy.
Jeff Bezos and Elon Musk have pledged billions of dollars to make it happen…
And Treasury Secretary Janet Yellen is working with 131 countries, 234 cities, and 695 of the world’s biggest companies –including Bank of America, Nike, and Exxon Mobil –to overhaul everything about the American way of life.
Go here right now to see what it means for your family and your money
In response to Russia’s inability to supply Europe with gas, European policymakers are revisiting the possibility of nuclear power to meet their energy needs. On July 6, EU lawmakers voted to adopt nuclear energy as a clean and green energy source. In February 2022, France announced plans for up to 14 new nuclear reactors by 2050 in an effort to reduce its dependence on fossil fuels.
According to a report by Report Linker, the global nuclear electricity market to grow to $179.89 billion in 2022, from $166.13 billion in 2021, at a CAGR of 3%. By 2026, the global nuclear electricity market is expected to hit a valuation of $239.17 billion in 2026, registering a CAGR of 7.4%.
Leading manufacturer and supplier of nuclear components, BWX Technologies, Inc. (BWXT) stands to benefit from nuclear power’s expansion. The company recently announced that it had been awarded a contract by the US Department of Defense Strategic Capabilities Office to build the first advanced nuclear microreactor in the United States.
On August 8, BWX reported Q2 earnings per share of $0.82 and beat estimates by $ .07. The company’s revenue amounted to $554 million, up 9.7% year over year, and outperformed Wall Street expectations by $9.87 million.
BWXT looks like a bargain at just 15.85 price-to-earnings. The stock has gained 9.4% so far this year and is offering a forward dividend yield of 1.71%, which the company supports with free cash flows of $64 million. The current consensus among seven analysts offering recommendations is to Buy BWXT s res. A median price target of $65 represents a 23% increase from the current level.
The Forever Battery: Making Gas Guzzlers Obsolete
Only 2% of cars sold in the U.S. today are electric vehicles… but that’s about to change — FAST.
A new battery breakthrough is ready to hit the market. It could revolutionize the $2 trillion automotive industry … and could soon make gas guzzlers obsolete.
This technology is predicted to cause a 1,500% surge in electric vehicle sales over the next four years.
The company pioneering this new battery could be the investment of a lifetime.
Amid the global energy crisis, defense stocks are a solid choice. “You’re immune from economic shock, because the market for defense goods bears no relation to commercial demand for anything in the civil economy,” said Richard Aboulafia, a managing director with consultancy AeroDynamic Advisory.
What better way to tap into the potential of defense contractors than through an Exchange Traded Fund (ETF). for investors seeking exposure to just the top names in the industry and those that are most impacted by the trends of the sector, the iShares U.S. Aerospace & Defense ETF provides exposure to the aerospace and defense sector where companies tend to be rather large, slow growing, but remarkably stable due to the widespread use of long-term government contracts for most of their services.
ITA tracks a market-cap-weighted index of US-listed manufacturers, assemblers, and distributors of aircraft and aircraft parts primarily used in commercial or private air transport and produces components and equipment for the defense industry, including military aircraft, radar equipment, and weapons. The fund caps its holdings to meet diversification requirements, limiting a single company to 22.5% of the fund’s assets and preventing completely unbiased exposure to the top few that dominate the industry. Concentration risk remains high despite the caps, reflecting the undiversified nature of the industry. Despite this, ITA still allocates holdings to a mixture of large, mid, and small-cap companies. The fund uses a representative sampling strategy instead of replicating the underlying index. The index is rebalanced quarterly.
A company with 400 million ‘patents’
One company has quietly compiled more than 400 million official trade secrets.
Trade secrets are like patents in that they protect valuable and proprietary information…
But unlike patents, trade secrets take less time to register… and more importantly, they never expire.
Which is a huge advantage for this little-known company.
You see, this company is using these trade secrets to build the world’s largest “codebase,” which will bethe key to it becoming “America’s Next Big Monopoly.”
Not surprisingly, Wall Street is starting to take notice. And the smart money is already pouring in.
Tech investor Cathie Wood has invested over $80 million already, and Microsoft founder Bill Gates has invested as well.
Get the details here before this story hits the mainstream media.