3 Stock Lunch: Halliburton, Enphase And Piedmont Lithium

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This is less about energy stocks or individual stocks in general - and more about how analysts come up with their top picks for the new year, or what is known as their high conviction bets.

My lesson here is that you have to read the actual report, not the short summary at the top to understand exactly what these Wall Street people are assuming to get their price targets.

Yes, price targets matter. For instance the first company had a conviction buy based on the idea that OPEC would really bump up capital expenditures next year. Well, I hope so because oil firms here are not reinvesting like the past.

This is a big IF for a stock that has pretty much mirrored the more diversified energy sector ETFs. Then the second company I talked about the price target on a stock trading at a nose-bleed 70x on 2023 earnings was only 10% higher. 10% higher for the risk of owning an individual stock?

Hmmm. The last one is more a craps shoot. Come on, if you are going to dip your toe into an individual stock, at least have some upside to taking the risk - but be aware that the huge upside was based on government permits, big increases to lithium prices and continued demand for EVs.

There is nothing wrong with individual stocks or taking risk, or even speculating, just know than when you invest in something based on somebody else's work, know their assumptions.

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