If you’ve been following me for a long time, you’ll know that my primary focus is to find well-rounded companies based on my six-factor stock-scoring model.
Basically, I’m looking for a convergence multiple investment factors that outperform the market.
Each factor alone can put a tailwind behind a stock price. But when four, five, or all six factors come together on the same stock…they can create a truly powerful force.
This system is where I have found success for myself and my readers over the years. I focus on the convergences of fundamental factors — growth, size, dynamism, etc.
But my colleague and good friend Ian King is an expert in another type of convergence.
He and his team work to identify companies that are perfectly positioned at the center of three converging macro-winds:
1. Government funding.
2. Private equity.
He learned that when a government backs the same mega trend that the private sector is pouring money into…
And especially when the megatrend is centered on innovation and critical technology…
This can create some truly lucrative returns for investors who spot convergence correctly and early.
Ian has just published a presentation on what he calls the “Fourth Convergence.” He reviews three convergences that have already led to investment fortunes in the 21st century… then reveals where he sees the following great convergence that is taking shape today.
I don’t want to spoil you, because the presentation is a “to see for yourself” kind of thing… and you will see why Ian is an expert in this area.
But what I will be do is share a hint.
Because my Green Zone Fortunes subscribers already have very profitable exposure to the fourth convergence mega trend that Ian highlights…
And if Ian is right, that means we’re going to make even bigger gains in the months and years to come.
A macro + fundamental convergence
When I recommended Texas Sterling Infrastructure Inc. (Nasdaq:STRL) to my followers in October 2020, the construction company was worth just $426 million.
Since then, its size has more than doubled…and our model portfolio position is up about 140%.
I just checked the stock quote (which, remember, you can do for almost any market stock on MoneyandMarkets.com)…
Sterling still rates a rock solid 98 out of 100a point better than its score when I recommended it at the end of 2020.
So we still have this convergence of tailwind factors blowing hard on our backs!
Moreover, I also believe that we have the type of macro-convergence that Ian King is looking for. Again, these are:
1. Government funding.
2. Private equity.
See, last Thursday, Sterling announced that it had successfully won one of its largest site development projects ever…by partnering with Hyundai Engineering America Inc.
Now, if you recognize Hyundai as a No– American car manufacturer… you are right. The automaker is headquartered in Seoul, South Korea.
But as its name suggests, Hyundai Engineering America operates in the United States and recently chose Sterling Infrastructure to help build its 600-acre electric vehicle (EV) battery manufacturing plant in Bartow County, Pennsylvania. Georgia.
The news touched on a familiar deal, as Sterling was also awarded a multimillion-dollar development contract in September to build Rivian’s 500-acre EV facility in East Atlanta.
It is two battery factories are innovating in Georgia…and it’s all thanks to the convergence of government funding, private sector investment, and an innovative mega-trend.
Government funding dates back to the Cut Inflation Act which was signed into law on August 16, 2022. In total, the act provides over $1 trillion in grants and incentives for clean energy generation. And that includes specific production credits for US-produced battery cells and modules.
No wonder we now see a treasure trove of battery and electric vehicle manufacturers hiring new and bigger quantities of private investment capital into facilities in our own territory, which is great for the US labor market and economy!
And, of course, it’s also great for Sterling Infrastructure… which is being awarded contracts worth hundreds of millions of dollars as government incentives and private investment capital converge to build a new era of innovative technologies “Made in USA”.
When I first recommended my followers buy STRL in late 2020, I pointed out how Sterling is a game of pick and shovel on the fast-growing mega trends of e-commerce and cloud computing.
Both require physical properties — distribution centers, in the case of e-commerce; and data centers, in the case of cloud computing. And my team and I noticed how Sterling’s strategy was focused on serving these high-growth, high-margin segments of the construction industry.
Now we’re starting to see Sterling’s next two money-generating segments develop…
One of them, as we talked about today, is the construction of electric vehicles and the manufacture of advanced batteries in the United States.
Made in the USA
Whether it’s the supply chain disruptions we’ve experienced as a result of the COVID-19 pandemic or the growing geopolitical tensions between the United States and China…American policymakers now have a renewed and vigorous interest in bringing high innovation manufacturing back to the United States.
The so-called “green energy” revolution is one of the megatrends that the convergence of public and private investment is propelling today…
And whether or not you believe in this mega trend, I urge you to look at how investing in a game of pick-and-shovels, like STRL, can help you make incredible investment gains on the mega trend – again , whether you believe it or not.
Plus, there’s yet another “Made in the USA” innovation mega trend heating up.
It also benefits from the convergence of public funding, private sector investment and innovation…
It has nothing to do with energy, but everything to do with an even more fundamental building block of nearly every tech product we use today…and it also focuses on the strained relationship between the states. United and China.
I think Sterling Infrastructure will also benefit from this situation…
I’ll explain why later…because I promised my friend Ian that I wouldn’t spoil the big reveal of his latest presentation on “The Fourth Convergence”.
To get his ultra-smart and up-to-date research on this opportunity, I recommend you watch his presentation and see for yourself.
If you think Sterling Infrastructure is the only way to play these new “Made in the USA” situations… Ian will open your eyes to even more of these above-market returns we are enjoying in STRL.
And if you’re already convinced and following both Ian and my advice on this incredible and momentous convergence, let us know how it goes! Write to me at BanyanEdge@BanyanHill.com. I will be sure to pass on your experience to Ian as well.
To good profits,Adam O’Dell Chief Investment Strategist, Currency and markets
|After the latest quarter-point hike, it looked like the days of oversized Fed moves were over. But now we can’t be so sure.
Inflation in February was stronger than expected. And the financial world is trying to dampen the chances of a bigger rally this month.
Lost in the noise of the outlook for the Fed’s next move, it looks like the 10-year Treasury yield is slowly breaking out of its downtrend. After soaring for most of 2022, the 10-year yield peaked in late October and began a slight decline, even dipping below 3.5%.
It didn’t last. The 10-year yield has been rising since early February and is again above 4%.
We can interpret this in two different ways.
Rising long-term bond yields are usually a sign that the economy is healthy. All other things being equal, yields fall when investors expect slower growth and rise when they expect higher growth, because that growth tends to drag inflation with it.
But what if it’s not what is the bond market telling us here?
What if yields rose because the bond market priced inflation without growth?
The unemployment rate today, at 3.2%, is near historical lows. It’s not really a good starting point for a growth boom. That’s actually what you see in a late-stage economy ready to cool down.
Think about it. There are three fundamental components to economic growth: labour, capital and productivity.
You can always increase production (work) by adding more workers. But where are you going to find new workers if everyone already has a job and companies are desperate for talent?
Then there is capital. Yes, you absolutely can grow the economy by making major new investments in productive capacity.
And as Ian pointed out earlier this weekthis is exactly what is happening, especially in the manufacture of semiconductors and other technology-related materials.
The United States is injecting tens of billions of dollars into the factories of the future. The problem is that it will be years before they are able to actually produce.
It looks like it might actually go backwards. Output per hour is actually down, suggesting American workers are becoming less productive.
With the decoupling of the Chinese and American economies, I don’t expect that to change anytime soon. If anything, it’s likely to get worse before it gets better.
By “dipping China,” the United States made what will likely be considered by future historians to be one of the most monumental decisions in our nation’s history.
It will be disruptive. It’s already the case ! But it will also create fantastic profit opportunities.
Ian King is well aware of this…and well ahead of most other investors in his positioning.
As Adam pointed out today, Ian just kicked off his full analysis of what he thinks is the best opportunity facing us right now.
If you haven’t already, you should catch it here.
Cheers,Charles Sizemore Editor-in-Chief, The Banyan Edge