Oil Be Seeing You…
In all the most familiar places … gas station lines and NASCAR races … all day through!
Great Ones, are y’all feelin’ it at the pump yet? I certainly am, and I work from home! Well, I also run the Hargett family “Uber” with two teenage kids. Some of y’all know what I’m talking about.
Either way, the average price at the pump in the U.S. topped $4 a gallon over the weekend, the highest prices since 2008. In fact, gas prices could set a record this week if things continue like this. The highest national average in the U.S. was $4.11 per gallon back on July 17, 2008.
Anyone wanna make bets on whether or not we’ll top that mark? I’d take that bet.
Anywho, it all boils down to oil and energy prices … and that nasty little Russian invasion of Ukraine, which has totally farked everything up.
As rational investors, we are forced to remember that oil is a commodity. As long as the U.S. participates in global markets, U.S. oil and energy prices will be dictated by the open market and influenced by global events.
The alternative? I hear lots of talk about “energy independence” and “pumping our way out” of this snafu.
But there are only two ways U.S. energy independence is gonna happen:
1. The U.S. bans all imported oil and relies solely on domestically produced oil. We have enough production, so why not? Well, while this sounds good and all, it will never happen. Such a move would require direct U.S. government intervention in the free market … and possibly even government ownership of oil production. Ain’t nobody got time for that communist B.S.
2. We go all in on alternative and green energy.
The hard truth is that the U.S. can pump all the oil and natural gas it wants, but U.S. consumers will still be subject to the whims of the global market.
The only feasible way to secure U.S. energy independence — or for any country to achieve energy independence, for that matter — is to invest in alternative and green energy sources. It’s why I’m such a big proponent of green energy investments like solar, hydrogen, wind, batteries, electric vehicles (EVs), etc.
These companies are the future of oil independence, which is how we should really view these types of investments. Imagine if the cost of recharging or “filling up” your vehicle didn’t go up or down based on whether some despot decides to invade another country. It sounds glorious to me.
But Mr. Great Stuff, those EVs need electricity! That comes from oil and natural gas! You can charge at the “pump,” but you’ll still have to pay for oil!
Ah, I see you haven’t heard about companies like NextEra Energy (NYSE: NEE). There’s a reason why NEE stock is a Great Stuff Picks holding … and it’s not just for the $0.42 per-share dividend and the 2.07% annual dividend yield.
NextEra is one of the leading green energy power utilities in the U.S. It generates, transmits, distributes and sells electricity throughout the country, and it does so with a broad swath of solar, nuclear, wind and hydrogen power plants.
That’s right — I said hydrogen power plants.
Now, back in October 2020, I recommended buying NEE stock for all of these reasons and more. This year, the shares have dropped alongside the broader market as investors panic over inflation, war, the ongoing pandemic, the Great Resignation … you name it.
But this is not the time to sell NEE stock. No sir!
Now is the time to buy. You see, we’re at a unique crossroads right now that gives us the perfect setup for NEE stock: high energy prices, rising inflation and the risk of a potential recession.
All three of these instances favor utility companies like NextEra Energy. Just ask “value investors” about buying utilities during a recession or rising inflation or high energy prices.
What’s more, there is a third driver for NEE — the green energy movement.
I’m not the only one who sees this opportunity for NEE investment either. Today, Keybanc upgraded NEE stock to overweight with an $87 price target.
The bottom line here is that NextEra is a triple-threat investment.
The stock will hold up well during a recession (should one emerge). It will gain as energy prices and inflation rise. And it will gain as green energy becomes increasingly the only way to get out from under the weight of the global oil monstrosity.
Editor’s Note: AI Cracks Open Largest Untapped Energy Reserve On Earth
A tiny Silicon Valley company is using AI to unleash the largest untapped energy source in the world. I’m not talking about oil, gas, wind, hydro, nuclear … or anything you’ve likely heard about before.
Yet this breakthrough is set to help launch an era of cheap, abundant electricity the likes of which the world has never seen.
Adam O’Dell just recorded a free video where you can get the whole story, as well as the details of the company that’s central to this breakthrough. Act fast, as this stock could be moments away from taking off.
Good: Sweet Sephora Serenade
Kohl’s (NYSE: KSS) just can’t seem to catch a break from unwanted activist investor attention … no matter how much Kohl’s Cash the sleepy suburbanite flips in exchange for real-world money.
New York-based hedge fund Macellum Capital Management is still breathing down Kohl’s’ back in a bid to take over the company’s board seats — despite its upbeat revenue outlook for 2022 amid ongoing supply chain issues.
With Wall Street wolves howling at the door, Kohl’s issued fresh long-term financial targets for its business this morning, throwing virtually everything it had onto the cluttered checkout counter.
One of the biggest standouts is Kohl’s plan for its Sephora shops — makeup stores within stores designed to lure unsuspecting shoppers deeper into department store domain. (You’ve gotta be careful in those places — without a totem, you might never make it out of Kohl’s’ winding corridors.)
So far, Kohl’s has opened about 200 Sephora shops inside its brick-and-mortar locations. But even bigger schemes haunt Kohl’s dreams: Now the company wants to open 850 Sephora stores by 2023 and bring in $2 billion in annual sales through the makeup market alone.
Those are pretty lofty ambitions considering Kohl’s made roughly $20 billion throughout all of 2021 … from all its business segments. But hey, if it gets the people going, who am I to rain on the retailer’s parade?
I’ll leave that to Macellum…
Better: Pedal To The Metal
Ride-sharing rebel Uber (NYSE: UBER) revved its engine this morning after driving on cruise control for the better part of a year.
The company’s raising its 2022 financial outlook now that Omicron fears are waning and gross bookings — essentially how many people are using Uber — have been boosted to pre-pandemic levels.
Here’s CEO Dara Khosrowshahi’s take on the company’s turnaround timetable:
Considering Uber stock is down 32% year to date, customers aren’t the only ones eager to step on the gas and get back to normal life. With the summer travel season just ‘round the river bend, these next few months will be crucial to Uber’s comeback story — not to mention UBER investors’ profitability plans.
If Uber can elevate EBITDA between $130 million and $150 million like it said in its latest SEC filing, then by golly by gosh, the company might just become Wall Street’s latest comeback kid.
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Best: Cohen Cranks Up The Heat
It’s a rainy day in hell when Bed Bath & Beyond (Nasdaq: BBBY) worms its way to the top of our stock leaderboard … and yet, here we are.
(To be fair — ♫ To be faaaair… ♫ — it is a rainy day in Kentucky. So, close enough.)
Just to be clear: BBBY stock isn’t up 55% this morning because of anything the great Beyond is doing right…
Rather, the stock is climbing because GameStop’s (NYSE: GME) chairman Ryan Cohen — who apparently owns a 10% stake in Bed Bath & Beyond through his investment company RC Ventures — is sick and tired of losing money on Beyond’s busted stock.
See, Cohen isn’t impressed with Bed Bath & Beyond’s supposed “turnaround” under CEO Mark Tritton. In fact, in an open letter to the company’s board, Cohen sounded downright disappointed in Beyond’s underperformance:
In response, Tritton offered a little tit for tat: “We will carefully review their letter and hope to engage constructively around the ideas they have put forth.”
Translation: Nobody asked for your opinion, Cohen.
This open letter reads a little like the unsolicited advice a parent gives you on how to “fix” your entire life … when all you really wanna do is keep eating Hot Pockets for breakfast and wearing pajamas all day.
It’s not that the advice isn’t warranted … it’s just not exactly welcome.
Behold! A brand-new chart of the week has appeared, courtesy of VisualCapitalist … with data from S&P Global Market Intelligence. It’s Chart-ception.
Like Great Stuff said last week — and basically every week before then — it’s gonna take a handful of alternative energy solutions to completely wean the world off of oil. And outside of the hydrogen hoopla … building better battery tech is where it’s at.
But where are most EV batteries made these days? Check it out:
Surprise … it’s China, with 79% of the world’s production capacity.
Next up is the U.S. at 6.2%, followed by Hungary at 4%, Poland at 3.1% … and it’s all down from there. But what’s next? What will the battery production market look like when EVs are actually, you know, mainstream?
If you’ve been following the soap opera-esque drama of EV Days, you know the EV and battery markets move fast these days as the demand for EVs grows ever-higher.
And as you can see in today’s chart, everyone and their mother is ready to throw money into the battery-building blitz — especially Volkswagen.
I mean, Volkswagen makes more cars than any other automaker … like, in the world. It has a pretty big interest in powering those future electrified cars. Volkswagen’s investments in EV-making plants across Europe means a whole lotta battery capacity is incoming.
By 2025, analysts predict that Germany will take second place with 11.3% of the world’s battery-making capacity, with China brought down a peg to just 65.2% of global lithium-ion capacity.
By then, the U.S. is slated to go from 6.2% of global capacity up to … a whole 6.3%.
Like I said, it’s gonna take a lot to kick back the oil dependency and get serious about greener energy option. All that said…
Yup, I knew it. Here comes the obligatory hydrogen twist, once again.
No, no, I got most of the hydro-ranting out of my system up above. But until the world’s boot-scootin’ around on hydrogen-powered whatever-have-you … building better batteries is your next best bet.
The best part of all? Y’all Great Ones are already invested in the battery builders straight at the source — the lithium that goes into said batteries.
Remember Albemarle (NYSE: ALB)? The best ‘marle? The Albemarle that’s … umm … the world’s top lithium producer? It doesn’t matter as much where these batteries will be built — Albemarle will be supplyin’ the li-on.
So that gives you, what, a bajillion different ways to get in on the new energy market? Lithium producers, hydrogen utilities, EV automakers … the Great Stuff Picks list goes on.
Of course, if you’re still … still … aching for some battery-making bacon, we’ve got you covered! Just click here to charge up on the latest EV-powering greatness.
And if you — yes, you — want to share your thoughts on the whole wide energy market, feel free to yap my ear off in the inbox!
Do you have a different way to invest in clean energy? Or are you still pursuing your dream of becoming the last true oil baron? (Hey, we don’t judge here.)
Write to us whenever the market muse calls to you! GreatStuffToday@BanyanHill.com is where you can let your words fly like wind power and let your smarts shine like solar … or something like that.
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Until next time, stay Great!
Editor, Great Stuff