Investor Opinion: “I ditched oil stocks for wind…

Charles Webb has been investing in stocks for just over 10 years. He started investing through Nationwide’s stock trading service in 2008 and has since built a diversified investment portfolio that includes FTSE 100 stocks, start-ups, precious metals, rental properties and certain cryptocurrency holdings.

He says: “Overall I have a SIPP, a stock ISA, a cash ISA and a few small workplace pensions. It’s a mix of planning for retirement (via SIPP) and saving for bad days with my ISA. He says diversification is important, which is why he has invested in a range of other assets such as property and commodities.

Charles, who is in his 50s and works as a project manager in the advertising industry, has increasingly turned to companies that take their corporate responsibility seriously, particularly when it comes to issues like climate change.

He says, “In the beginning when I started investing, I was buying stocks that looked like good long-term buys and were offering decent dividends. At the time, oil companies met this criteria and seemed like good long-term bets.

However, his perspective on this has changed over the past decade. Charles adds: “I sold all my shares in the oil and gas company Shell, for example, and turned instead to renewable energies. Nor will I invest in tobacco, gambling or weapons.

Wind turbines

Charles recently moved to Wales with his partner, who works as an environmentalist. He says investing in renewable energy is not only good for the planet, but has proven to be good for his investment portfolio, with some of these renewable energy investments being some of his most profitable holdings these days. last years.

For example. he owns a stake in Siemens Gamesa Renewable Energy (SGRE), a leading manufacturer of onshore and offshore wind turbines. This company, resulting from the merger of Siemens Wind Power and Gamesa in 2017, now has the second largest installed capacity of turbines in the world.

Demand for renewable energy has boosted sales of its core product and its stock price in recent years. However, fierce competition among manufacturers in this market has hurt profits.

At the start of 2015, the company’s shares were trading at €7.90, before rising again over the following years. Stock prices then rose sharply in 2020 following the coronavirus pandemic – which caused the price of many fossil fuels to drop significantly. At the start of 2021, the shares were trading at a high of €37.21, although they have since fallen, and are currently trading around the €18 mark.

Morningstar gives the stock a 3-star rating and says competitive pricing pressure among wind turbine makers has driven cost-cutting programs to boost profit margins at Siemens Gamesa, which has historically been at a premium. behind its nearest competitor Vestas (VWS).

Morningstar analysts add, “A new management team has been tasked with a new restructuring program focused on product innovation and cost optimization. As we move towards a subsidy-free environment, we believe that a combination of these factors must be taken into account to restore the group’s profitability.

Astra and Reckitt

Another of its biggest holdings in recent years has been pharmaceutical giant AstraZeneca (AZN), which is linked to the rollout of the coronavirus vaccine in the UK. The FTSE-listed company’s share price has risen steadily over the past 10 years, providing investors with total annualized returns of 17.65% over the past five years and 12.99% over the past 10 years. last decade. Either way, it’s more than double that of the FTSE 100.

Morningstar points out that the company has established a prominent presence in the pharmaceutical and biotechnology industries with a range of patent-protected drugs and a pipeline of new products to replace those whose patents are about to expire. As a result, it has a wide economic gap, which means its markets are well protected from competition.

Elsewhere, Charles has invested in hotel start-up Tipjar, via Crowdcube. Compared to these higher risk single company stocks, he also invested in iShares Core FTSE 100 ETF (ISF), which has a Morningstar analyst rating of bronze.

These various investments are primarily held through his SIPP and ISA, both of which he has with AJ Bell.

Charles says, “When buying individual stocks, it’s easy to become overwhelmed with information that makes decisions difficult. I had some bad performers in my portfolio, for example Reckitt Benckiser. He says his shares in the company, which makes a range of household and personal care brands, such as Calgon and Lysol, have been disappointing.

He adds, “I also bought a GameStop Corp Class A stock at the absolute top of the market. My lesson was not to stockpile memes unless you get in early.

Over the years, Charles has learned not to follow prices on a daily basis. “The best thing to do is do your research for advice, pick your stock, and then forget about it. Looking at prices every day is a path to madness.


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Felix J. Dixon