The Energy Sector To Watch In 2021 By Alex Kimani - Dec 29, 2020, 7:00 PM CST
The year 2020 has been unusually volatile for the U.S. financial market, but more so for the energy sector thanks to nationwide lockdowns and subsequent fuel demand destruction. It s become a recurring theme, but the oil and gas sector has again emerged as the worst performer among America s 11 sectors for the 11th straight year.
Indeed, Refinitiv data shows that the
S&P 500 earnings growth rate would have only declined 2.3% when you exclude the energy sector instead of the 6.5% when you include it. That s quite damning for the index s smallest sector, representing just 2.3% of the index in aggregate market cap weighting.
Oil and gas companies see their long-term futures constrained and some are looking to transform themselves. Those connected to the machines are looking to scale and take control over the electric grid. One side hopes to offer income, the other capital gains. We’ll start with the capital gains.
SolarEdge Technologies: The Front End of a Bubble
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When any stock starts selling for 10 times its revenue, it’s in bubble territory. Such valuations can be justified, if the company is growing fast and doing so profitably. But even cloud application stocks eventually fall to Earth, either because they justify the faith by growing into their valuation, or by failing and falling.
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