PODCAST: Great Stock and Fund Picks Post COP26


Great Stock and Fund Picks Post COP26 include Tesla, NIO, Li Auto, TPI Composites, Schneider National, Knight-Swift Transportation, FREYR, Fisker, Alstom, NARI Technology, SINOPEC Engineering Group, Covestro, Rexel, Ørsted, Siemens Energy, FirstEnergy, Sunrun, PAVE infrastructure ETF, Parker-Hannifin, Xylem, Jacobs Engineering, Martin Marietta, Cleveland-Cliffs, Xcel Energy, United Rentals, VOTE ETF, Plug Power Inc., Brookfield Renewable Partners

PODCAST: Great Stock and Fund Picks Post COP26

Transcript & Links, Episode 71, November 19, 2021

Hello, Ron Robins here. Welcome to podcast episode 71 published on November 19, titled “Great Stock and Fund Picks Post COP26” — and presented by Investing for the Soul. investingforthesoul.com is your site for vital global ethical and sustainable investing news, commentary, information, and resources.

Remember that you can find a full transcript, links to content – including stock symbols, quotes, and bonus material – at this episode’s podcast page located at investingforthesoul.com/podcasts.

Now, just a reminder. I do not evaluate any of the stocks or funds mentioned in this podcast. Furthermore, if you’re concerned about the ESG and sustainability ratings of any stock or fund included in this podcast, check your broker’s online site for such information.

If your broker doesn’t have this information, signup for free with Morningstar and you can gain access to company and fund ESG-sustainability ratings. Please note, I receive no compensation from Morningstar or anyone else covered in these podcasts.

Also, if any terms are unfamiliar to you, simply Google them.

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Great Stock and Fund Picks Post COP26 (1)

Several of today’s articles relate in some way to COP26. Here’s the first titled, Following COP26? Look at These 3 Sustainable Investing Strategies and 40 Stock Picks. It’s by Jack Denton writing in Barron’s. Now please excuse my improper pronunciations of company names in these quotes from this article. Quote.

Interested in the renewables sector? Morgan Stanley says…

Look at China Jushi (600176.China), Jiangsu Zhongtian Technologies (600522.China), Luoyang Glass (1108.H.K.), Engie (ENGI.France), Ørsted (ORSTED.Denmark), Siemens Energy (ENR.Germany), FirstEnergy (FE), and Sunrun (RUN).

For energy storage…

Ganfeng Lithium (1772.H.K.), Panasonic (6752.Japan), Zhejiang Huayou Cobalt (603799.China), and QuantumScape (QS) are worth checking out.

Across hydrogen…

Morgan Stanley identifies Beijing SinoHytec (688339.China), China Petroleum & Chemical (0386.H.K.), Johnson Matthey (JMAT.U.K.), NEL (NEL.Norway), Air Products (APD), Enbridge (ENB), and New Fortress Energy (NFE) among the potential winners.

Attractive bets in sustainable alternative fuels…

include major oil companies Exxon Mobil (XOM) and Chevron (CVX), as well as HollyFrontier (HFC) and Marathon Petroleum (MPC).

The developing field of carbon capture, utilization, and storage offers picks including:

Bayer (BAYN.Germany), ConocoPhillips (COP), NextDecade (NEXT), and Occidental Petroleum (OXY).

Opportunities in electric transportation and green mobility still abound…

Familiar electric-vehicle stocks such as Tesla (TSLA), NIO (NIO), and Li Auto (LI) make Morgan Stanley’s list, as do TPI Composites (TPIC), Schneider National (SNDR), Knight-Swift Transportation (KNX), FREYR (FREY), Fisker (FSR), and Alstom (ALO.France).

Renovation and energy efficiency also offer options…

NARI Technology (600406.China), SINOPEC Engineering Group (2386.H.K.), Covestro (1COV.Germany), and Rexel (RXL.France) are among the potential plays.

Morgan Stanley’s view is that there are also many stocks facing headwinds… from the trend of decarbonization,

including sectors such as energy; power and utilities; cement; chemicals; coal; metals and mining; industrials; automobiles; airlines; and shipping. 

In particular, it is bearish on stocks including Consolidated Edison (ED), Continental Resources (CLR), XCel Energy (XEL), Ford Motor (F), BMW (BMW.Germany), Nissan (7201.Japan), American Airlines (AAL), Deutsche Lufthansa (LHA.Germany), and Air France-KLM (AF.France), among others.” End quotes.

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Great Stock and Fund Picks Post COP26 (2)

Now, turning to infrastructure. Another favorite of ethical and sustainable investors, there’s this article titled Infrastructure stocks on watch after bill passes Congress. Four under-the-hood ways to play it by Keris Lahiff. It appeared on cnbc.com. Here are some quotes.

“‘’I think that the (PAVE infrastructure ETF) is a great way to gain exposure…’ Ari Wald, head of technical analysis at Oppenheimer, says it has more room to run…Wald told CNBC’s ‘Trading Nation’ on Monday. ‘We’re bullish on that industry because it is indeed reclaiming its leadership… It has also outperformed the S&P 500 this year, climbing more than 35%…’

Wald highlights diversified motion and control parts manufacturer Parker-Hannifin as one stock at the top of his watch list… Shares have jumped this month, rising by 11%. The broad-based S&P 500, by comparison, is up just 1%.

Nancy Tengler, chief investment officer at Laffer Tengler Investments… Prefers to play the group through individual stocks rather than the PAVE ETF. She picked out three names she believes have upside potential.

Xylem is a beneficiary of the $55 billion water spend that’s been allocated in the bill,’ she said in the same interview. ‘This is significant spending for water. The state appropriation bills are somewhere in the $2 [billion] to $2.5 billion range annually. This is $55 billion over five years.’

‘Then, for the highways portion of the bill, we like Jacobs Engineering. So think about the $40 billion that’s being spent for bridges, that’s going to benefit engineering and construction companies, and then Martin Marietta, which is obviously just the asphalt for the road,’ said Tengler.

Xylem, Jacobs and Martin Marietta Materials… this year all are up by at least 30%, while the S&P 500 has climbed 25%.” End quotes.

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Great Stock and Fund Picks Post COP26 (3)

Now for my second article on infrastructure. It’s titled, 3 Stocks That Could Win Big Under Biden’s Infrastructure Bill by Matthew DiLallo, Neha Chamaria, and Reuben Gregg Brewer. Here are quotes from the authors on their picks.

“1. Reuben Gregg Brewer chooses Cleveland-Cliffs (NYSE: CLF)

Over the past couple of years Cleveland-Cliffs has turned itself from a steel industry supplier into an integrated steelmaker that also sells key competitors iron ore pellets and other steelmaking inputs…

Cleveland-Cliffs could also be benefiting from increased demand for its steelmaking ingredients… It is, thus, heavily leveraged to the elevated steel demand likely to come from increased infrastructure spending…

Cleveland-Cliffs’ stock is the best-performing North American steel mill over the past year. However, thanks to the mergers used to create it, the steelmaker also has the most leverage, with a debt-to-equity ratio of 1.3 times, twice as high as the next competitor.

2. Matt DiLallo likes Xcel Energy (NASDAQ: XEL)

The infrastructure package includes significant funding for the energy transition to cleaner alternatives… That aligns perfectly with Xcel Energy’s investment plan. The utility has committed to achieving net-zero carbon emissions by 2050 and is investing billions of dollars to achieve that bold goal.  

In addition to investing heavily in renewable energy, Xcel Energy is spending billions of dollars on upgrading its transmission system. It’s also building EV infrastructure, including installing charging stations in major transportation corridors and underserved communities… The company said it could invest up to $4 billion over the coming decade on hydrogen-related projects to blend that emissions-free fuel into its natural gas system…

The company could tap into government-funded programs from the infrastructure bill to support its spending plans. That could enable it to achieve its decarbonization efforts while creating significant value for shareholders by growing its earnings and dividend.   

3. Neha Chamaria recommends United Rentals (NYSE: URI)

As federal spending on infrastructure picks up, so should demand for heavy machinery like the ones United Rentals rents out. In fact, the company is already witnessing higher demand even before federal spending kicks off… Growth of 22% in its third-quarter rental revenue encouraged United Rentals to upgrade its outlook…

United Rentals looks well positioned to win as infrastructure spending in the U.S. gathers steam.” End quotes.

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Great Stock and Fund Picks Post COP26 (4)

Now, this is a new style ESG ETF, Article’s title is VOTE: ESG Activism in an ETF. It’s by Neena Mishra of Zacks. Quote.

“In this episode of ETF Spotlight, I speak with Yasmin Dahya Bilger, head of ETFs at Engine No. 1, about activist investing through an ETF. The activist investment firm had sent shock waves through Corporate America in May when it targeted Exxon Mobil XOM and successfully placed three candidates on the board of directors.

The Engine No. 1 Transform 500 ETF VOTE, which started trading in June, intends to encourage transformational changes in companies through shareholder activism. The fund invests in 500 of the largest US public companies and comes with an expense ratio of just 0.05%.

VOTE is an excellent alternative to standard S&P 500 ETFs for ESG focused investors since they can get a similar financial performance while participating in efforts to bring transformational changes in portfolio companies. Microsoft MSFT, Apple AAPL and Alphabet GOOGL are the top holdings in the market cap weighted ETF, which has already gathered about $250 million in assets.” End quotes.

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Great Stock and Fund Picks Post COP26 (5)

Honorable Mentions

These are ethical and sustainable investment recommendations worth reading about but I hadn’t the space to review them in this podcast.

1. Title: 3 Solid Climate Tech Funds for Investors – appearing on Morningstar.com by Sylvester Flood. Quote “Bill Gates has said that the next generation of FANGs… will be climate tech companies.” End quote.

2. Title: New BlackRock Minimum Volatility Factor and Fixed Income ESG ETFs Provide More Choices to Putting Sustainability at The Core of Investment Portfolios — on Business Wire. Press release. Quote “These funds further enable our clients to build strong portfolios customized to their sustainable goals and navigate the transition to a low carbon economy.” End quote.

UK Focused picks

1. Title: ACE 40 ethical rated list: Interactive Investor completes annual review. Quote “In performance terms, 48% of active funds on ACE 40 are in 1st and 2nd quartile versus peers over one year to end September 2021, with 79% in 1st/2nd quartile over three years and 91% over five years.” End quote.

2. Title: The Best ISA Investment Funds In November 2021 — on moneyfacts.co.uk. By Derin Clark.

Recommendations associated with Renewable Energy

1. Title: Why Solar Energy Stocks Are Suddenly Hot Again – on the Motley Fool. By Travis Hoium. Quote “Headwinds have turned into tailwinds for the solar industry.” End quote.

2. Title: Green Energy Stocks – Why Now is the Time to Invest from the blueandgreentomorrow.com site). By Sean Mellon. Quote “We’ve chosen to focus on stocks listed on the coveted and tech-led Nasdaq 100, according to the index’s most recent performance and data.” End quote.

3. Title: Why Solar Energy Stocks Jumped Thursday again on the Motley Fool. By Travis Hoium. Quote “The U.S. government rejected a request for solar tariffs, and investors liked what they heard.” End quote.

4. Title: Five climate ETFs for a post-COP26 world on etfstream.com. By Jamie Gordon. Quote “Investors can rest easy knowing a glut of ESG ETF launches in recent years means they are bound to find products matching their climate convictions.” End quote.

5. Title: 3 Climate Tech Stocks To Watch In The Wake Of COP26. By Josh Dylan on Nasdaq.com. Quote “Top Climate Tech Stocks To Watch Right Now Daqo New Energy Corporation (NYSE: DQ), Brookfield Renewable Partners (NYSE: BEP), Plug Power Inc. (NASDAQ: PLUG).” End quote. Incidentally, Daqo is a controversial pick as it is accused of using forced labor.

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Ending Comment

Well, these are my top news stories with their stock and fund tips — for this podcast: “Great Stock and Fund Picks Post COP26.’

To get all the links, stock symbols, or to read the transcript of this podcast — and more — go to investingforthesoul.com/podcasts and scroll down to this episode.

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Thank you for listening.

Talk to you next on December 3. Bye for now.

© 2021 Ron Robins, Investing for the Soul.

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