Macroeconomic analysis makes one thing clear: you don’t always have to shop by industry to find good macro investments. For instance, if you’re looking to play oil, then analysis of correlations between oil and stocks shows that many companies outside traditional oil and gas benefit from rising crude. Using HiddenLevers’ Macro Trend Screener, we found the two non-traditional oil plays shown here:
'Chart created using Hidden Levers app'
CSX Corporation (CSX):
CSX has been showing ads for some time with claims that one ton of freight moves over 400 miles on a gallon of diesel. Well, it’s actually true, and fuel efficiency is a key reason that railroads have benefited from the last decade’s crude oil boom.
Here’s the macro-economic profile for CSX:
First Solar (FSLR):
First Solar is one of the top players in thin-film solar panels. At first glance, a relationship between FSLR and oil seems unlikely, since oil is used to make transportation fuels, while solar energy feeds into the electrical grid. The competition here is more about the potential future than the present – the more expensive oil becomes, the more likely that solar can be competitive in charging a growing hybrid fleet.
FLSR’s macro profile shows, not surprisingly, a strong relationship with natural gas in addition to oil:
Add macroeconomic analysis to your toolkit, and you’ll find many more new and unexpected ways to invest in big picture trends.
Disclosure: No positions