Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
To achieve superior risk adjusted after tax returns by making privately negotiated investments in the E&P, midstream, services and power sectors.
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The share price appreciation of both Hammerhead and Permian will have added added circa $94m to NAV since the June update, whereas the share price of Riverstone has hardly moved. The discount is significantly higher than the June update. Think I’ll add!
Problem is that you're not getting the cash back. They're going to pump it into net-zero stuff which probably won't go well because their track record is appalling. They've repeatedly made terrible decisions.
34adsaddsa,
Couple of throwaway sentences ... do you have anything to substantiate what you say?
The MOIC for 30/06/23 for decarbonisation is 0.73X so a 27% overall loss. Not great but not "Appalling". Ceres Power down 70%, ITM down the same, Jupiter Green down 30%, Keystone Positive Change down 40%.... so what are you comparing against?
Let's look at that 27% or $58m.
1/ A third of that loss ($20m) is Anuvia - it's dead, gone bust, bad decision, but this happens.
2/ $9m is Hyzon. Hydrogen Fuel Cells. Looking at the Nasdaq RSE bought after a pull back of 33% but caught a falling knife with hindsight. It's an early stage play but a great example of a beneficiary under the IRA. It goes into commercialisation next year. "Hyzon Motors has announced the successful completion and testing of the first nine single-stack 200kW Fuel Cell System (FCS) B samples at its production and innovation centre in Bolingbrook, Illinois. This validates Hyzon’s design, equipment and operating procedures and it is now looking to increase its rate of production. Hyzon remains on course to declare Start of Production and commercialisation of its innovative FCS in 2024."
3/ $11m Tritium. Disappointing but digging into the detail are you aware that: "Tritium announced record results for the first four months of 2023 with a new production and revenue record, a $40 million capital investment from two existing backers and an expectation it will be EBITDA positive in the first half of calendar 2024. The company raised its forward-looking growth guidance as it continues to invest to meet strong customer demand for its EV fast chargers."
Did you know that they hold 30% US market share are according to the Nasdaq "super attractive", with a "strong buy" from 5 analysts covering them:
https://www.nasdaq.com/articles/buy-alert%3A-3-ev-charging-stocks-nearing-super-attractive-entry-points
Do you find that appalling?
A $30m loss on Solid Power. That loss is shared and also backed by BMW, Ford, Samsung and is funded by the United States Department of Energy to further scale and develop its nickel- and cobalt-free cells for its Solid-State battery technology that could significantly lower the price of EV batteries. The technology is intended to produce cells that are more energy-dense as well as lighter, thinner and less volatile than lithium-ion cells.
Doesn't that sound it could be a beneficiary of the IRA? If successful will the MOIC still be 0.39x? Or many times that?
...TBC next post...
Solid Power is also a buy on 7 analysts following and a candidate for your "must buy list"
(Source: https://www.nasdaq.com/articles/3-up-and-coming-ev-stocks-to-put-on-your-must-buy-list)
Are we starting to feel less appalled?
Finally a $13m loss on Enviva, which I've previously covered in some detail, and once again on Nasdaq a buy with 33% upside according to the 5 analysts following including Citi and JP Morgan. Again it's a recovery play but where they are guiding the market with cost reductions, EBITDA substantial growth as previously described - refer to:
(Source:https://s28.q4cdn.com/898203682/files/doc_financials/2023/q2/EVA-2Q23-Investor-Presentation-08-04-2023-updated-4pm.pdf)
If you've been paying attention I've described $83m of losses, not $58m. That's because there are other portfolio members on a >1 MOIC, like Freewire on a 2X MOIC. So gains as well as losses.
So when you say "They've repeatedly made terrible decisions." if you look at their portfolio objectively then they've also made some smart decisions too. Moreover, I've described specifically why the jury is out with most of the portfolio too.
Since green investments are typically growth by their very nature, 27% is actually much less than other growth stocks. Comparing Scottish Mortgage for example that's down, what, 50%? GROW is down 70%.
The US IRA, the European Green Deal, the Chinese dominance in most things green, UK's labour Green Prosperity Plan from 2024, the Japanese Green Plan (https://www.jdsupra.com/legalnews/japan-unveils-green-subsidy-programme-6441356/) are juggernauts totalling more than $5 trillion of subsidies and support worldwide. We are only feeling the affect of those programs from mid 2023. You have to think carefully why those juggernauts are irrelevant since Riverstone's decarbonisation portfolio is a direct beneficiary.
Politically too, people can be as dismissive as they like about green wash, but there is a ground swell of public opinion as disaster follows disaster and a political solution is demanded to combat this. This will benefit decarbonisation - this is the certain future - and investors need to smell the fumes, it's as simple as that.
Extrapolating the past to predict the future as you appear to be doing, is something which wouldn't have worked for RSE's O&G portfolio if you'd done that 2 years ago - and I believe the decarbonisation portfolio will prosper going forwards in the same way.
"Global investment in clean energy is on course to rise to USD 1.7 trillion in 2023, with solar set to eclipse oil production for the first time"
(Source: https://www.iea.org/news/clean-energy-investment-is-extending-its-lead-over-fossil-fuels-boosted-by-energy-security-strengths)
Excellent posts Agricore. Thank you