CA - Algonquin: Hold Your Horses Now
2023-03-26 23:11:29 ET
Summary
- Algonquin Power has recovered remarkably since its December lows, outperforming the S&P 500 significantly.
- In our previous article, we called attention to AQN's price action, which plunged to highly pessimistic levels, with a potential bear trap waiting to be sprung.
- Astute bottom fishers sensed a timely mean-reversion opportunity and robustly set up the false downside breakdown, capitalizing on investors who sold their shares at its multi-year lows.
- After a sharp rebound over the past three months, AQN's valuation has normalized. Hence, the reward/risk profile has become significantly less enticing.
- With our mean-reversion thesis playing out as we postulated, we are moving off to the sidelines from here.
For further details see:
Algonquin: Hold Your Horses Now