Altus, Omicron the FOMC trading notes +3

10:36 29-Nov-21

By now you know it's called Omicron, after the WHO did us all the conversational favor of skipping the greek letters Nu and Xi.  There are early, though possibly biased, reports that symptoms are relatively mild and experts I spoke with over the weekend noted that would be consistent with most viral evolutionary strategy, which is to increase infectiousness will lessening severity.  We won't really have a more accurate picture for weeks though.

This will lend added interest to testimony from Powell & Yellen at 10AM tomorrow.  I will monitor, but doubt there will be any change to the Fed's plans to begin tapering on December 15th.  An update on estimated government default, also projected for that day unless Congress acts, seems more likely.  Then of course, there's the Jobs reports on Friday morning.

The main purpose of this note is to add ALTM to website, after calling out the trading opportunity, along with the caveats.  I wouldn't have done that if I didn't see further upside, though, and I like today's 6% post-dividend drop, which I see as the natural consequence of year end trading in the absence of options, even more than Friday's pricing.  I'm narrowing my medium-term (post-EagleClaw-transaction, calendar year 2022) price target to $100 based on repricing to 6% yield.  Doubling remains quite possible with the increased pipeline ownership that I cited and/or natural gas upside.  This is further supported by the latest report from the Department of Interior with recommendations for leasing of federal lands for hydrocarbon production, which calls for higher fees while offering scant guidance on climate change issues.  We'll also see what OPEC+ has to say after delaying to evaluate the Omicron response. 

For those who wish to adhere more strictly to ESG investing, I'm keeping an eye on multiple renewable stocks which have plenty of December value potential.  However, many of those I called out last week remain, with today's dip in XEBEF looking appealing despite the DoI report, for those who won't worry about near-term pricing.