Chase Boddison
Jan 1, 2025
"Energy market picks"
Energy Stocks to Watch:
1.
TC Energy (TRP): $48.74
Market Cap: 50.92B
Overview
As of November 25, the P/E ratio is 14.60 which is slightly above their average ratio, however I believe that with the election of Trump the price will skyrocket so looking to a year in the future I believe that this stock is undervalued. TC Energy also owns and operates the xl keystone pipeline, which the Trump administration plans on reopening in the coming months.
Articles:
The article discusses Donald Trump's reported intention to revive the canceled Keystone XL oil pipeline project if reelected, despite significant obstacles. The project, initially halted by President Obama, revived by Trump, and rescinded by President Biden, has since been abandoned by its developer, TC Energy. Experts highlight diminished economic feasibility due to shifts in oil market dynamics and alternative pipelines. The initiative, while unlikely to materialize soon, signals Trump's commitment to pro-oil policies and opposition to Biden's energy agenda. Challenges include land acquisition, public opposition, and market conditions
Donald Trump plans to revive the Keystone XL oil pipeline despite its cancellation and significant challenges. The project was halted by President Biden in 2021, leading its developer, TC Energy, to abandon it. The original infrastructure has been removed, and new permits would be required. Market conditions, alternative pipelines, and landowner opposition make the project's revival unlikely. Still, Trump's intent is largely symbolic, emphasizing energy independence and contrasting his policies with Biden’s climate-focused agenda. Experts doubt the pipeline's viability given current oil market dynamics.
Donald Trump’s transition team is preparing a broad energy plan focused on boosting U.S. oil and gas production. The plan includes lifting restrictions on LNG export permits, accelerating offshore and federal land drilling, and reinstating the Keystone XL pipeline. Trump aims to repeal Biden-era climate policies, replenish the Strategic Petroleum Reserve, and pressure the International Energy Agency to adopt a more pro-oil stance. While emphasizing energy independence, the proposals may face regulatory and legal challenges and would require significant time to implement fully.
2.
Cheniere Energy (LNG): $213.06
Market Cap: 50.79B
Overview
Cheniere Energy is an American liquified natural gas company that has its hand in many different forms of oil transportation and pipeline systems. Its current P/E ratio stands at 13.8 which is nearly 13 points below the average of 26.64 or 49% below their average. I believe that with the election of Trump this company could see up to 30% spike in their trading price based on historical data and the incoming administration’s push to energy independence.
Articles
This article highlights LNG as a very solid stock choice for those who are looking to hop into the growing liquified natural gas market. Analysts give it an 84% buy rating due to the upcoming policies and reduction of regulations to come from the Trump administration. Analysts also give it a very solid 9/10 chance of outperforming the market in the next 12 months; with the only factors that would contribute to otherwise being geopolitical. Overall the article highlights this as a very solid investment for someone looking to broaden their portfolio to the oil industry.
3.
Rio Tinto (RIO): $62.22
Market Cap: 106.37B
Rio Tinto Group (RIO) and Its Lithium Sector: Poised for Growth
Rio Tinto Group, a leading mining and metals company, has been making significant investments in lithium production, a critical component for electric vehicle (EV) batteries and energy storage systems. As the global push for renewable energy and EV adoption accelerates, Rio Tinto's lithium projects are positioned to play a key role in the company's growth trajectory.
Why Rio Tinto's Lithium Sector Will Thrive Under the Trump Administration
Although the Trump administration was not a strong advocate for renewable energy, several key factors make Rio Tinto’s lithium sector an attractive investment opportunity during this period:
Domestic Lithium Production and Energy Independence The Trump administration prioritized reducing dependence on foreign resources and fostering domestic production of critical minerals. Lithium, being a designated critical mineral, fits squarely into this strategy. Rio Tinto’s Jadar lithium project in Serbia, along with its expanding interests in U.S.-based lithium resources, aligns with the administration's goal of securing reliable, local supplies of essential materials.
Growing EV Market and U.S. Manufacturing Despite a general focus on fossil fuels, the administration supported manufacturing growth in the U.S., including the automotive sector. As EV production increases domestically, driven by companies like Tesla and other global manufacturers, the demand for lithium is expected to rise. Rio Tinto's ability to supply high-quality lithium to U.S. markets positions it as a critical player in the supply chain.
Deregulation and Mining Incentives The administration’s deregulation efforts and incentives for mining could reduce costs and expedite the permitting process for new lithium projects. This creates a more favorable environment for Rio Tinto’s lithium operations, allowing the company to scale up production more efficiently.
Strategic Focus on High-Growth Sectors While traditional sectors like coal and oil received the administration's direct support, Rio Tinto’s focus on lithium provides an opportunity to tap into long-term growth trends in energy storage and renewable technologies. This diversification is likely to appeal to investors seeking exposure to both stable commodities and growth-oriented sectors.
The Jadar Lithium Project and Future Prospects
One of Rio Tinto’s most ambitious projects is the Jadar lithium-borate deposit in Serbia, one of the largest lithium finds in the world. This project positions the company as a significant player in the global lithium market, with the potential to supply both European and U.S. markets.
Additionally, Rio Tinto is exploring lithium extraction technologies in the U.S., leveraging its Boron mine in California to produce lithium from waste streams—a sustainable and cost-effective approach that aligns with long-term market trends.
Our View
Under the Trump administration, Rio Tinto’s lithium sector is well-positioned to capitalize on policy support for domestic resource production, increasing demand for EVs, and global lithium market growth. With Elon Musk’s recent support of Donald Trump, and Musk’s appointment to a cabinet position by Trump; it’s fair to assume that Trump will be in support of Musk as well. With strategic projects like Jadar and innovative production methods, Rio Tinto is poised to secure a leadership position in the rapidly expanding lithium industry, driving potential stock price growth in the next year and beyond.
Investors should remain attentive to global lithium demand trends and potential policy changes that could further influence the market.