Independence Day
July 4th has always been one of my favorite holidays. Summer weather, fireworks, cookouts, and especially birthday cake (my bday is lucky number 7/7). Celebrate safely and Enjoy the long holiday weekend.
Monthly Updates plus special report
I was able to resist the temptation to write up an update mid-month in June and intend to resist again in July. However, I do want to create a investing article for beginners for those on the distribution list that are just getting started in investing (or want to get started). Look for this article sometime in July. If you have any topics or questions, please send me a note. Otherwise tune in to Clubhouse rooms to hear more (if you need a clubhouse invite, let me know).
Half-way through 2021
As of the end of June, the broader market was up 12.5% (NASDAQ) to 14.4% (S&P) with smaller companies up slightly more at 17.0% (Russell 2000). And, the clean energy stocks came roaring back in June with the QCLN ETF up 10.4% and our Clean Energy SPAC portfolio up 9.6%, however, both are still down for the year, 1.5% and 8.0%, respectively.
In a Fidelity account I'm building in 2021 for the top Clean Energy SPAC companies of the 2020's, the June gains were 22.7%. This portfolio is over-weighted with EV Charging companies and has a significant holding in STEM, the energy storage company. The table below shows top 5 percentage growth of the holdings in the month of June only: Fisker, ChargePoint, STEM, EVgo, and MP materials.
Companies that de-SPACed in June
Four companies are now fully public through the SPAC process and trading on their own. Proterra, a maker of electric buses, is the best of bunch and strongest pipeline of sales. President Biden visited one of their manufacturing plants a few months ago and they continue to announce new commitments for bus sales. Origin materials is an interesting company that is working on a process to produce carbon negative materials focusing on PET plastics first. However, it is definitely be a long term play as they don't expect revenue until 2023 and breakeven in 2025.
SPACs with Announced Targets in June
Four SPAC announced their targets in June in market segments of EV charging, batteries, lidar, and autonomous trucks. Solid Power is interesting as it is developing a solid state battery (similar to QuantumScape) for EVs and has partnerships with Ford and BMW. However, no meaningful forecasted revenue until 2025.
Second half of the Year
So what happens in the second half of the year? Well, my crystal says…..
If I knew the real answer to that, we'd all be rich! The market is on fire and hitting all-time highs. The Federal Reserve continues to prop up prices by buying securities and keeping the supply of money high. Consensus view is that the inflation we are seeing is transitory, meaning that it is temporary and will come back down when supply chains are fixed (example, used car prices are way up, but it won't keep going at this rate when supply comes back into market).
My guess is that we will see a significant correction (10%-ish) in the next couple months, but we will continue to hit new highs. My forecast (okay, it is more like a guess) is for the S&P to be up between 20-25% for the year. That would mean a second half of positive gains, but not as much as we experienced in the first half.
The Climate Crisis continues to get lots of attention and rightly so. The Northwest US setting record temps (about 10 degrees over the record!). Extremely dry conditions in the West and the Plains. More hurricanes, more wild fires, more devastation. The building collapse in Miami. And Did you see the ocean on fire?
Clean Energy stocks will, I believe, over-perform in the remainder of 2021 and for the remainder of the decade. But one can beat the averages by focusing in on the top 1/4 to 1/3 of the firms with the best teams and technologies. Below are the list of the companies being tracked in our Clean Energy SPAC portfolio.
DATABASE LISTING
29 companies that have de-SPACed and now trade as their own ticker
25 companies named as targets by a SPAC
32 SPACs searching for clean energy companies