In today's Action Alerts PLUS Daily Rundown, Chris Versace answers your top questions on portfolio holdings ChargePoint (CHPT) , Clear Secure (YOU) , Vulcan Materials (VMC) , gold, oil and much more.
CHRIS VERSACE: Hello, JD.
JD DURKIN: Nice to have you here. So let's kick things off with a question from a newer member.
CHRIS VERSACE: OK.
JD DURKIN: First of all, welcome to that newer member. What are the club's suggestions for playing gold and energy, Chris?
CHRIS VERSACE: So we have exposure to gold and energy both through two ETFs-- GLD and XL. And we like GLD as a natural hedge, so we tend to be using that over the last several weeks, given some uncertainty in the market. We're going to be mindful of that as inflation continues to rear its head.
It's something we think is going to continue to happen, and we'll look for more data on that in the balance of the week. But in terms of energy, this is a tough one. We do think that the reopening of China is going to drive demand for oil, but we're also going to be mindful of what's happening both in Western Europe and here in the US. Good news is that the ifo economists have come out earlier this week, and they said we do not see the likelihood of a recession unfolding in 2023 for the euro area.
So that's a positive for oil. And when we take that into account, our thinking here is, geez, we last picked up oil around-- sorry-- XLE shares around $85. They're well below that. Odds are we're going to use some of that additional weakness to scoop up some additional shares in the coming days.
JD DURKIN: All right. Where would you consider adding to Clear Secure is the next question.
CHRIS VERSACE: Well, Clear Secure has been very oversold, and we communicated that to members in our roundup from last week. Candidly, with the TSA data remaining favorable, with travel data from the airlines, particularly partners United and Delta being very favorable-- and I actually flew to New York on United, and I can tell you the lines are long and Clear Secure works like a charm.
So I do think that we're going to continue to lean into Clear Secure. It's well below our cost basis. Typically, that's when we want to scoop up those shares. So could we be doing that in the coming days? Yes, we could.
JD DURKIN: Great original reporting. Taking it on yourself to take the observations and to recognize the impact.
CHRIS VERSACE: I appreciate that. You know you've got to check these data points out for yourself.
JD DURKIN: Absolutely. When in doubt, just show up. Last week, Mexican officials-- to another question here-- seized a port facility owned by Vulcan Materials amid ongoing tensions with a Mexican cement company. Is this a bit of a headwind, do you think, to potentially worry about?
CHRIS VERSACE: So this is-- if anything else, it's more headline risk than anything. And I say that because when we dig into it, we find out that was a facility that was already closed by Vulcan Materials. So it has no impact on the day-to-day operations of the business. Rather, this was tied to a, I should say, what appears to be a past relationship with the Mexican cement company Cemex.
So I would say it's just noise.
JD DURKIN: Chris, of course, if the day ends in Y, It's a day to talk about ChargePoint. What competitive advantages does ChargePoint have over its rivals?
CHRIS VERSACE: So let's remember the overall thesis behind EV charging. As you and I have talked before and shared with members, it's a rising tide that lifts all boats. However, we picked ChargePoint for a reason. Now, one of the early ones was because of its strong balance sheet, with enough cash to carry it until it gets to EBIT positive or starts to generate operating profits.
But the other one to consider is two things, actually. One, their position is currently stronger outside what we call the passenger vehicle market. Are they strong there? Yes. But they're even stronger in more commercial vehicles. And as we've pointed out with members, we are seeing a lot of action in that market as well.
So when we think about Amazon and the trucks that-- excuse me-- that they're using, Mac truck, and the trucks that they're bringing are PACCAR, Navistar, all of these in the commercial sector really play to ChargePoint's strengths. And the other is just the recurring nature of the subscription part of the business that they have. Typically, when we talk about subscriptions or memberships with, say, Costco or even Clear Secure, that's a very nice, predictable indicator of future revenue.
So, for all those reasons, we like ChargePoint.
JD DURKIN: All right. Finally, here, a general education question. When you look over at the portfolio tab, Chris, how is weight calculated?
CHRIS VERSACE: So I'm going to assume the question refers to each positions weighting in the portfolio. It's very simple. You take a look at the current share price, you multiply that by the number of shares that are listed, and then you divide by the total assets in the portfolio. Pretty straightforward.
JD DURKIN: There we go. All right, the great Chris Versace. That's going to do it for us here today. Thanks for being here.
CHRIS VERSACE: Thank you.
JD DURKIN: In person, as always. You're always welcome.
CHRIS VERSACE: [LAUGHS] Yes.
JD DURKIN: Nice to have you here. Members, to those of you watching at home, Chris will be back tomorrow for more on what he is watching for the week. We'll see you then.