Wall Street Faces Election SNADU
Break out your value stocks, Great Ones!
Georgia election officials have yet to certify the results, but it appears that the Democrats will take control of the Senate.
Now, wait! Just … wait. SNADU? Are we just ignoring that headline? What’s a SNADU?
SNADU: Situation normal, all Dem’ed up. Take that however you want.
Just like the Spanish Inquisition, nobody on Wall Street expected the Democrats to win. In fact, the analysts over at JPMorgan Cazenove are probably genuinely surprised at the results. However, it’s a good thing they laid out the case for value stocks, just in case.
The point is, Wall Street’s tides are shifting after the Georgia Senate runoff election results … and investors are betting big on two sectors in particular: alternative energy and cannabis.
With pot-happy Dems in control of both the White House and Congress, decriminalization and potential legalization are now closer than ever. As a result, investors jumped on a slew of cannabis stocks today:
- Canopy Growth (NYSE: CGC) — up 15%.
- Aurora Cannabis (NYSE: ACB) — up 11%.
- Tilray (Nasdaq: TLRY) — up 16%.
In fact, the AdvisorShares Pure Cannabis ETF (NYSE: YOLO) soared 8% as cannabis stocks rallied across the board.
My favorite in the sector remains Canopy Growth, mainly due to the Constellation Brands (NYSE: STZ) partnership and its ability to quickly gobble up market share in the U.S. market. This is the moment Canopy has waited for.
That said, Curaleaf (OTC: CURLF) is my dark horse play in the pot patch because it already does quite well at cannabis sales stateside. (And its showrooms are really nice … or so I hear.)
But the Dem’s hippie agenda is more than just “smoke ‘em if you got ‘em.” The legislative sun is about to shine brighter on alternative energy … and if you weren’t already prepared for this seismic shift in the energy market, you darn well better start now.
Yes, oil just hit $50 per barrel for the first time in nearly a year. But investment capital has long since moved on to greener pastures … literally. And now, legislative capital, tax breaks, subsidies … you name it … could all potentially shift away from Big Oil and toward a whole slew of alternative energy companies.
Today, Wall Street cheered the potential for increased government backing:
- First Solar (Nasdaq: FSLR) — up 7%.
- SunPower (Nasdaq: SPWR) — up 15%.
- SolarEdge (Nasdaq: SEDG) — up 9%.
Y’all know my personal favorite in the alternative energy market: Plug Power (Nasdaq: PLUG). In fact, PLUG is up a whopping 131% since I recommended it in Great Stuff Picks. Congratulations!
The hydrogen market has truly ginormous potential, especially with electric vehicles (EVs) and electric semitrucks. With the U.S. government now leaning in favor of alternative energy, PLUG stands to gain even more.
But if Plug isn’t your thing, Bloom Energy (NYSE: BE) is another hydrogen stock to look into, while Beam Global (Nasdaq: BEEM) is tearing it up on the solar-charging front for EVs.
So, Mr. Great Stuff, should I buy any of these stocks?
You guys ask me this all the time in Great Stuff emails. I still consider PLUG a buy — it’s in the Great Stuff Picks portfolio, after all. (Tune in tomorrow for more on the portfolio!)
As for the rest? I like CGC, CURLF, BE and BEEM. But whether or not you should buy them depends on your risk tolerance and your investment goals. (What did you expect from a free financial e-zine?)
What I will tell you, though, is to not buy a single pot stock before you watch this!
Just when you thought the hype surrounding Tesla (Nasdaq: TSLA) couldn’t get any bigger… Morgan Stanley analyst Adam Jones dubbed CEO Elon Musk the “chosen one” and lifted TSLA’s price target to a Street high of $810.
The chosen one … seriously. I’d be shocked, but no amount of Tesla hype shocks me anymore.
Speculative battery stock, QuantumScape (Nasdaq: QS) plummeted 41% on Monday. Why? Quantum dilution fears, that’s why! Investors panicked over an S-1 Resale filing, which typically indicates a new share offering. The plunge prompted CEO Jagdeep Singh to sigh that the S-1 was merely “to permit the resale of shares that were already issued.” Wall Street bought it, and QS rebounded 16% today.
Today’s edition of “biotech headlines straight out of Mad Libs” is brought to you by plant-based medicine maker Jaguar Health (Nasdaq: JAGX). Jaguar’s treatment for noninfectious diarrhea in adults with HIV/AIDS is now in development for other distressing diarrhea-based issues. Other diarrhea-based issues? Yup. Imma leave it at that … gotta go now. But we’ll keep an eye on Jaguar to see if its recent runs continue.
No one expected much from the auto industry last year (well, if you forget about Nikola for a sec). General Motors (NYSE: GM) actually posted a sales increase for 2020’s last quarter — a 4.8% raise, and the automaker’s only sales increase of the year — but overall sales declined 12% for the year.
Ford Motor (NYSE: F), on the other hand, didn’t fare nearly as well. Struck with inventory issues, Ford’s typically strong F-150 sales cratered 33% last quarter. Overall sales fell 15.6% for 2020. Turns out, it’s a bit tough to sell trucks when your factories are shut down — just ask ol’ “chosen one” Elon. On second thought, please don’t wind him up on that again.
All good alliances come to an end — some with knives in the back, some with boots on the ground. Walgreens Boots Alliance is giving up its Alliance to AmerisourceBergen in a $6.5 billion “some stock, some cash” deal. Since Democrat legislators love negotiating on drug prices, this is probably a good time for Walgreens to eye the exit on the drug biz. I swear WBA has seen more lineup mix-ups than CSNY by now…
Welcome one and all to our first poll of the year!
Thousands upon thousands of you Great Ones shared your thoughts in last year’s many polls — and in our inbox for Reader Feedback, of course. Wink wink, nod nod, our inbox is right here.
We’re breaking into the new year hot and fresh with your thoughts on that whole “value versus growth” debate.
If you’ve kept up with your ‘Stuff, you’ll remember Monday’s issue, when we went on down to the Georgia gridlock. JPMorgan predicted that a Democrat sweep in the Senate special election would kick off 2021’s “next leg up in value rotation.”
Safe to say, Georgia’s still on my mind. And, with solar and pot stocks taking off like a shot, it’s good to see we’re keeping up with 2020’s “buy the news before there’s real news” kneejerk reactions…
But, with growth stocks set for a long-overdue reckoning, the Georgia Senate election might not be the only catalyst for value stocks to ramp up. So, let me ask you this: Do you think value stocks will make a comeback in 2021?
Click below and let us know!
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Joseph Hargett
Editor, Great Stuff