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ChargePoint Stock Has a Really Compelling Long Term Case

It hasn’t been easy to own ChargePoint (NYSE:CHPT) stock in the last year.
Source: YuniqueB / Shutterstock.com
First, the stock got caught up in the…

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This article was originally published by Investor Place

It hasn’t been easy to own ChargePoint (NYSE:CHPT) stock in the last year.

Source: YuniqueB / Shutterstock.com

First, the stock got caught up in the electric vehicle (EV) bubble that began to inflate in late 2020 and popped in the first quarter of 2021.

Since then, CHPT stock has been subject to the whims of the infrastructure bill that languishes in Congress.  

The bullish case for ChargePoint is clear. The world is moving towards electric vehicles. However, there is a chicken-or-egg question for investors to consider.

That question is which comes first the EVs themselves or the charging infrastructure to support them.

If you believe, as I do, that the latter has to lead the way, then you’ll have a framework to understand why CHPT stock is a good speculative investment.  

There are a lot of competitors entering this space. And there will likely be more on the way. But this is one time where being a first mover, and sector leader, is likely to pay off for investors.  

Competition Will be Intense 

When I think about competitors to ChargePoint, I tend to stop at Blink Charging (NASDAQ:BLNK) and Tesla (NASDAQ:TSLA).

However, that’s an oversimplification of what is an expanding list of competitors. For example, Royal Dutch Shell (NYSE:RDS.A) has plans to launch 500,000 charging stations in the next four years.

This makes sense since Shell is the market leader with 25,000 branded service stations located throughout the United States. It’s unlikely that the company would just quietly abandon that leadership position. 

There’s also BP (NYSE:BP) to consider. The company is investing $7 million in IoTecha, a smart EV charging firm. This supports BP’s goal of providing over 70,000 public EV charging points throughout the world by 2030.  

And there are other companies that are also making aggressive moves on the charging station front. Hyundai (OTCMKTS:HYMTF), for example, is selling Level 2 home charging stations that could help to ease range anxiety.  

Fortunately, the pie will be large enough to go around. If Shell and BP hit their targets that would still leave nearly 500,000 charging stations that need to be built out by 2030.

While that may not sound like that much of a boost, remember that once a charging station is built, ChargePoint will get those two words that investors love to hear, recurring revenue.  

The EV Infrastructure 

I frequently go an entire day without thinking of charging my smartphone. Yet, I almost always fully charge it every night. My children, on the other hand, seem to have their phones plugged in every second of the day. Talk about range anxiety. 

The reason I bring this up is that neither one of us is right. It’s just a preference. But I do see a parallel with electric vehicles.

I suspect that EV “service stations” won’t be where the action is at. I believe the real market is going to be home charging stations, and in setting up charging stations in grocery store parking lots, entertainment venues, parking decks and the like.  

That’s because the battery packs in development are designed for frequent use. In fact, it appears that battery manufacturers are expecting it.

They aren’t going to spend time educating the consumer on how to charge the battery. They’re just expecting that the consumer will want a charging solution that’s available wherever they go. And so too is ChargePoint which has a range of solutions to address this very situation.  

When I look at it that way, I get far more bullish on CHPT stock.  

Don’t Wait on CHPT Stock 

ChargePoint doesn’t report earnings again until December 1. And spoiler alert, they aren’t going to be reporting a profit.

That is enough to keep many investors from jumping on the stock. But Will Ashworth makes a strong case for why the company’s lack of profitability shouldn’t keep you away, and I agree.

At this point, if it’s revenue you’re looking for, it’s revenue that ChargePoint is delivering.  

I’m generally a cautious investor, but I’ll admit to being intrigued by CHPT stock as a speculative bet.

I can understand why some investors are hesitant. However, this is one time where if you wait for things to be perfect, you’ll have missed the largest gains. ChargePoint may be a choppy trade for some time, but the long-term outlook is bullish.  

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.  

Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for InvestorPlace since 2019.

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The post ChargePoint Stock Has a Really Compelling Long Term Case appeared first on InvestorPlace.

Author: Chris Markoch

Economics

New Zealand cash rates – the canary in the coal mine?

My son, Angus, ventured into the Sydney residential market at the beginning of the year acquiring a small apartment, with what I considered to be an enormous…

My son, Angus, ventured into the Sydney residential market at the beginning of the year acquiring a small apartment, with what I considered to be an enormous loan from one of the Big Four. At the time the fixed four-year home loan rate was around 1.95 per cent per annum. Today, the advertised rate has jumped 1.0 per cent per annum to around 2.95 per cent. This reflects the Australian four-year Government Bond yield moving up from 0.20 per cent at the beginning of 2021 to the current 1.32 per cent.

The likely response to this change from property buyers today is that a much higher proportion of their mortgage will be attributed to a variable home loan. This rate typically reflects the Reserve Bank of Australia’s (RBA) cash rate, and at 0.10 per cent per annum it is currently at a record low, and well below the “emergency low” of 3.0 per cent per annum implemented during the Global Financial Crisis (6 months to September 2009).

Across the ditch, the Reserve Bank of New Zealand (RBNZ) has raised its official cash rate for the second time in two months by 0.25 per cent to 0.75 per cent per annum to counter growing inflation, which hit 4.9 per cent in the September 2021 quarter, and is expected increase to 5.7 percent in the March 2022 quarter.

RBA vs RBNZ cash rate

Markets are currently pricing in five more 0.25 per cent increases by the RBNZ over the next twelve months to a targeted 2.0 per cent per annum. Will New Zealand be seen as a canary of the coal mine moment given inflation has become a global problem? Only time will tell, however if cash rates happen to jump by 1.5 per cent and this filters through into the rate for variable home loans. The tailwinds currently being enjoyed by asset owners (with debt) – close to nil interest rates – could easily become headwinds.

The US inflation figure for October 2021 hit 6.2 per cent, a 30 year high.  Selected CPI subcategories saw the following 12 month changes: Beef +24 per cent, gasoline +51 per cent, natural gas +28 per cent and used cars and trucks +26 per cent. The UK was not far behind, with an inflation rate of 4.2 per cent for October.

ds-us-inflation-2021-2

Global supply chain bottlenecks and shifting consumer demand from services to goods could well be transitory, but as the Founder of Bridgewater Associates, Ray Dalio, warns, “raging inflation” is eroding people’s wealth today – particularly those who have their money in cash.




Author: David Buckland

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Economics

Dow Jones, the S&P 500, and Nasdaq price forecast after sell-off on Friday

Wall Street’s three main indexes ended sharply lower on Friday as news of a new COVID variant worried investors around the world. The World Health Organization…

Wall Street’s three main indexes ended sharply lower on Friday as news of a new COVID variant worried investors around the world.

The World Health Organization (WHO) on Friday designated a new COVID-19 variant detected in South Africa, and a lot of people didn’t want to hold risk assets on Monday morning or are afraid of what that could look like Monday morning.

Markets are reacting negatively because it is unknown at this point to what degree the vaccines will be effective against the new strain and would it initiate new lockdowns around the world. David Kotok, chairman and chief investment officer at Cumberland Advisors, added:

All policy issues, meaning monetary policy, business trajectories, GDP growth estimates, leisure, and hospitality recovery, the list goes on, are on hold. The new strain may complicate the outlook for how aggressively the Federal Reserve normalizes monetary policy to fight inflation.

The new Omicron coronavirus is detected in Britain, Italy, Netherlands, Germany, Israel, Belgium, Botswana, Denmark, Hong Kong, and Australia for now.

Britain has already imposed travel restrictions on southern Africa, while the European Commission is considering suspending travel from countries where the new variant has been identified.

The upcoming week will be busy, and investors will pay attention to Fed Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen’s appearance before Congress to discuss the government’s COVID response on November 30.

S&P 500 down -2.3% on Friday

 S&P 500 (SPX ) weakened by -2.3% on Friday and closed the week at 4,594 points.

Data source: tradingview.com

If the price falls below 4,500 points, it would be a strong “sell” signal, and we have the open way to 4,300 or even 4,200 points.

The upside potential remains limited for the week ahead, but if the price jumps above 4,650 points, the next target could be around 4,700 points.

DJIA down -2.5% on Friday

The Dow Jones Industrial Average (DJIA) weakened -2.5% on Friday and closed the week below 35,000 points.

Data source: tradingview.com

The Dow Jones Industrial Average remains under pressure as news of a new COVID variant worried investors worldwide.

The current support level stands at 34,500 points, and if the price falls below this level, the next target could be around 34,000 points.

Nasdaq Composite down -2.2% on Friday

Nasdaq Composite (COMP) has lost -2.2% on Friday and closed the week at 15,491 points.

Data source: tradingview.com

The strong support level stands at 15,000 points, and if the price falls below this level, it could be a sign of a much larger drop.

Summary

Wall Street’s three main indexes ended sharply lower on Friday after the news that the World Health Organization designated a new COVID-19 variant detected in South Africa. All policy issues go on hold currently, and investors will pay attention to the government’s COVID response on November 30.

The post Dow Jones, the S&P 500, and Nasdaq price forecast after sell-off on Friday appeared first on Invezz.







Author: Stanko Iliev

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Economics

Wind Power Becoming too Cheap for Industry to Sustain Itself

The price of generating wind power has gotten so low, that companies may soon be unable to invest in additional
The post Wind Power Becoming too Cheap…

The price of generating wind power has gotten so low, that companies may soon be unable to invest in additional technologies for the sector.

According to major turbine-making company Siemens Gamesa, the cost of wind power has recently dropped to such a low level that it can finally challenge the fossil fuel industry, mostly due to an abundance of investments in renewable energy. “What we’ve clearly achieved is that wind power is now cheaper than anything else,” said the company’s CEO Andreas Nauen as quoted by Reuters.

However, Nauen warned that “we shouldn’t make it too cheap,” because it could hinder the influx of additional investments in the green space. Across Europe, both wind and solar are substantially cheaper that natural gas, coal, and even nuclear power. And, with governments’ strong ambitions to adopt a climate friendly agenda, the demand for wind turbines has reached a record-high; but, the relatively lower prices and increased competition have also eroded away at producers’ margins.

“We have probably driven it too far,” said Nauen, adding that if prices continue to decline, the sector won’t be able to invest in further innovations. To make matters worse, accelerating global inflation for raw materials, coupled with supply shortages, also threatens to squeeze turbine makers’ margins. Moreover, governments around the world have begun eliminating generous wind subsidies in favour of more competitive contracts submitted by the lowest bids.

“We need to change auction systems in the future,” said Nauen, suggesting that local job creation should be governments’ top priority, rather than just the lowest price.


Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Wind Power Becoming too Cheap for Industry to Sustain Itself appeared first on the deep dive.

Author: Hermina Paull

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