W&T Offshore (WTI) Announces GoM Lease Awards & 2021 Hedges - Nasdaq

W&T Offshore (WTI) Announces GoM Lease Awards & 2021 Hedges - Nasdaq

W&T Offshore (WTI) Announces GoM Lease Awards & 2021 Hedges - Nasdaq

Posted: 12 Jan 2021 07:11 AM PST

[unable to retrieve full-text content]W&T Offshore (WTI) Announces GoM Lease Awards & 2021 Hedges  Nasdaq

Are Clean Energy Stocks In Bubble Territory - OilPrice.com

Posted: 11 Jan 2021 02:00 PM PST

The Age of Renewable Energy is upon us, with the global shift to renewable energy in full swing, but like any huge rally, the divide between the bulls and the bears widens exponentially, with bears calling for another big bubble to burst, and the bulls standing their ground with no thoughts of conceding at all.  The bulls, of course, have a lot of ammunition. 

Clean energy stocks have been hot throughout 2020 and are showing no signs of letting off steam in the new year, thanks to the rapidly changing political landscape in the United States. 

The slim majority that the Democrats have clinched in the Senate is likely to help President-elect Joe Biden fulfill his pledge to promote clean energy and EVs through sweeping legislation such as the Green New Deal might be tougher to enact.

But that has not stopped investors from going out on a limb and bidding up clean energy securities to new highs.

The $5.5 billion (AUM) iShares Global Clean Energy ETF (ICLN), a catch-all bet on clean energy, has pulled in a record $691 million of inflows in the week after Democrats landed both of Georgia's Senate seats while the $4.2 billion Invesco Solar ETF (TAN) is on track to add $370 million in just seven days—another all-time haul. 

Meanwhile, the WilderHill Clean Energy Index (PBW) has already tucked on another 19% to start the year, following a 203% increase in 2020. All three funds are hovering around all-time highs.

And now, Wall Street is saying it might be best to pump the brakes as stock valuations in the renewable energy sector may be getting out of whack.

Related: India Oil Demand Falls For First Time In 20 Years Due To COVID

True, the early days of the clean energy boom were fed largely by wishful euphoria, as the Wall Street Journal points out, using the example of Tesla (NASDAQ:TSLA), which is now trading at more than 1,000 times trailing earnings.

But that "euphoria" has helped fund the next round of clean energy, which has more fundamental catalysts behind a rally. This is where it gets real.  

Bubble in the Making?

In a note to clients, Raymond James analyst Pavel Molchanov, has downgraded five alternative energy and clean technology stocks urging investors to lock in profits and look for new opportunities.

Molchanov has downgraded Enphase Energy Inc. (NASDAQ:ENPH) to Underperform from Market Perform, labeling the maker of solar inverters as a "textbook example of overly euphoric sentiment."

Molchanov notes that Enphase and close peer SolarEdge Technologies (NASDAQ:SEDG) remain the most dominant in module-level electronics for the U.S. residential market, "but new entrants are working to erode that duopoly.

The analyst says Enphase's premium 50x EBITDA valuation leaves the company with little margin of error, meaning just about everything has to go right in the current year to justify the steep valuation.

Susquehanna's alternative energy analyst Biju Perincheril has also downgraded both names to Neutral from Positive, citing stretched valuations. Perincheril has assigned new price targets of $195 for ENPH and $340 for SEDG, suggesting 6% and 5% downside, respectively.

Related: Asian Buyers Rush To Secure North Sea Oil After Saudi Surprise Cut

Not everybody has bailed on Enphase, though, as Goldman Sachs has upgraded the stock while downgrading First Solar (NASDAQ: FSLR), citing a shifting preference toward residential solar and battery exposure.

Bad for ESG?

The biggest risk to the clean energy bull thesis is that these overly optimistic bets hinge on the slim majority that the Democrats hold on the Senate. 

Additionally, it's unclear how aggressively the Biden administration will pursue those policies considering the government's top priority at the moment is to contain a pandemic that is rapidly spiraling out of control.

Perhaps even more interesting, a cross-section of Wall Street now sees the clean energy frenzy posing a major threat to other ESG stocks.

According to Bloomberg Intelligence analysts Eric Balchunas and Athanasios Psarofagis:

"Clean-energy exchange-traded funds could bypass the broader ESG category in natural assets in the next few months if current trends hold. Flows into clean-energy ETFs have breadth and depth that typically portend a grassroots frenzy of buying as investors seek to grab exposure as fast as they can."

Indeed, the 17.6% gain by the iShares ESG MSCI USA Leaders ETF (SUSL) in the past 52 weeks has only slightly outpaced the 16.9% rally by the S&P 500 and looks downright pedestrian compared to a 169% gain by ICLN and 260% by TAN.

And bubble fear isn't confined to clean energy, either. A recent E*Trade Financial survey showed that most investors believe the stock market is in bubble territory. Some 66% of 904 investors managing at least $10,000 in an online brokerage account think the market is "either fully or somewhat in a bubble", while 32% list a recession as their top portfolio risk at present. And it's not just Tesla that's on their minds ... 

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:

NIO Stock Drops, Wells Fargo Pops as Stock Market Heads Higher - Barron's

Posted: 12 Jan 2021 05:55 AM PST

Stocks were edging higher Tuesday morning as the stock market bounces back from Monday's drop

Futures on the Dow Jones Industrial Average were up 73 points, or 0.2%. S&P 500 futures were had advanced 0.3%, and Nasdaq Composite futures has gained 0.4%.

Markets are looking ahead to earnings season, which officially begins Friday, when JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) report. Delta Air Lines (DAL) and Taiwan Semiconductor (TSM) report Thursday. S&P 500 earnings are expected to drop around 10% from a year ago in the fourth quarter.

The price of crude oil continues to rise, with WTI Crude, the U.S. benchmark, up 1.6% to $53 a barrel. Oil stocks were up, with the Energy Select Sector SPDR ETF (XLE) rising 1%. ConocoPhillips (COP) gained 1% after Mizuho upgraded the stock to Buy from Neutral and raised its price target to $56 from $36.

Moderna (MRNA), one of the biggest producers of the Covid-19 vaccine, says the vaccine should provide immunity for a year. This will satisfy investors if it means the globe can still reach herd immunity, which would catalyze reopening and help the economy return to pre-Covid levels. The stock had gained 1% in premarket trading.

Wells Fargo (WFC) was rising 1.6% after UBS upgraded the stock to Buy from Neutral. Other bank stocks were rising as well, with Bank of America (BAC) up more than 1%.

Albertsons Companies (ACI) had climbed 4.5% after beating estimates on revenue and earnings. The company reported adjusted earnings per share of 66 cents, beating expectations of 35 cents. Sales came in at $15.4 billion, better than the forecast for $15 billion.

Electric-vehicle maker NIO (NIO) fell 1% after Citigroup downgraded the stock.

Fortinet (FTNT) rose 2% after D.A. Davidson upgraded the stock to Buy from Neutral and lifted its price target to $170 from $130.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

Dow Futures Edge Higher Amid Trump Impeachment Drama; Treasury Yields Extend Bond Market Selloff - TheStreet

Posted: 12 Jan 2021 05:30 AM PST

The Tuesday Market Minute

  • Global stocks inch higher in cautious trading, with markets tracking political drama in Washington and noting the ongoing rise in U.S. Treasury bond yields.
  • House Speak Nancy Pelosi will move forward which impeachment procedures Wednesday amid reports that VP Mike Pence will not invoke the 25th Amendment to remove President Trump from office.
  • Benchmark 10-year Treasury yields rise to a fresh 10-month high of 1.156% overnight, extending the bond market sell-off that has investors focused on global interest rates.
  • Bitcoin rebounds from Monday's bear market slump, adding 9% to trade past $36,000 as crypto volatility grips markets.
  • Oil nears 11-month highs ahead of EIA and API reports, with WTI crude passing $53 dollars per barrel.
  • Fourth-quarter earnings reports start this week with numbers from JPMorgan, Citibank and Wells Fargo on Friday.
  • U.S. equity futures suggest modest opening bell gains Tuesday ahead of Redbook retail sales data at 8:55 am Eastern time.

U.S. equity futures edged higher Tuesday, pulling global stocks out of Monday's selloff, as markets continue to focus on political developments in Washington and a worrying rise in Treasury bond yields linked to government spending plans.

House Democrats have vowed to push forward with articles of impeachment against President Donald Trump this week following reports that suggest Vice President Mike Pence won't move to invoke the 25th Amendment and remove him from office.

However, with only seven full days remaining until President-Elect Joe Biden's inauguration, Trump near-term exit seems unlikely, and Democratic efforts on impeachment could stall or complicate some of Biden's early ambitions, including a new fiscal stimulus package he has hinted will be worth 'trillions of dollars'.

That pledge, alongside earlier spending agreements from the last Congress, has rattled bond markets for weeks, pushing benchmark 10-year Treasury note yields some 30 basis points higher to a ten-month high of 1.161% in overnight trading.

Last night's moves were also linked to comments from Atlanta Federal Reserve bank president Raphael Bostic, who said he was not "super concerned" about the rise in longer-term yields and didn't think the Fed would need to track it too closely.

Stocks, in fact, could face a series of tests this week beyond the rise in Treasury yields that could set the tone for this year's early bull market. At least eight companies will launch IPOs this week, lead by Poshmark and Petco Health, in an effort to raise around $5 billion and extend last year's run of successful new listings.

Big bank earnings on Friday, as well, including fourth-quarter updates from JPMorgan Chase  (JPM) - Get Report, Citigroup  (C) - Get Report and Wells Fargo  (WFC) - Get Report will be in sharp focus this week, as will key retail sales data for the month of December. 

Early indications Tuesday, however, suggest some modest risk appetite, with futures contracts tied to the Dow Jones Industrial Average suggesting a 78 point opening bell gain and those linked to the S&P 500 priced for an 11 point advance. Contacts tied to the Nasdaq Composite are indicating a 58 point gain for the tech-focused benchmark.

The U.S. dollar index slipped 0.06% against a basket of its global currency peers to 90.411, while Bitcoin added 9% in overnight trading to rise by $36,000 after yesterday's nearly 20% plunged. 

In other markets, oil prices climbed closet to an 11-month high in overnight trading ahead of U.S. inventory data that could show a fifth consecutive week of declines, adding to price pressures brought by Saudi Arabia's surprise output cut and bets on stronger energy demand over the first half of the year.

WTI contracts for February jumped 69 cents to $52.94 per barrel, while Brent futures for March added 77 cents to $56.43 per barrel.

European stocks were mixed in early trading, with the Stoxx 600 rising 0.15% and Britain's FTSE 100 falling 0.35% in the opening hours of trading, while Asian markets nudged modestly higher, highlighted by a fresh 30-year high for the Nikkei 225 in Tokyo.

Why Oceaneering International Stock Rallied Again Today - Motley Fool

Posted: 12 Jan 2021 01:41 PM PST

What happened

Shares of Oceaneering International (NYSE:OII) rallied more than 12% by the close of trading on Tuesday. Fueling the oil stock was growing enthusiasm in the oil market as crude prices continued climbing. With today's jump, Oceaneering International is up more than 40% so far in 2021, boosted in part by a big rally last week. 

So what

Crude oil prices continued their recent rebound today. WTI, the primary U.S. oil benchmark, rose more than 1.7%, closing above $53 a barrel. Meanwhile, Brent, the global benchmark, added another 1.6%, closing above $56.50 a barrel. That pushed crude oil to an 11-month high. 

Oil platform and tanker ship in offshore area at sunset.

Image source: Getty Images.

The main factor raising oil prices was investor enthusiasm that supplies will tighten, causing inventory levels to decline, thanks in part to recent efforts by Saudi Arabia to curb more of its output. Analysts believe that U.S. inventory levels, which the government will report tomorrow, should drop for the fifth straight week. 

This rising tide of higher prices is lifting all boats in the oil market. That's because it will enable oil producers to generate more cash, giving them more flexibility to sanction new capital projects. As they do, it would benefit Oceaneering International since it should secure more service contracts. 

Now what

While Oceaneering International has won more than $250 million of new and renewal contracts since the end of the fourth quarter, the oil industry faces a long road to recovery, especially offshore, which is Oceaneering's focus. Because of that, it could be awhile before its results start improving since the industry will likely hold back expansion projects until the oil market is on a firmer foundation. That uneven recovery could cause its shares to be very volatile this year.


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