Last updated on April 18, 2022
Leo Schmidt, chief investment officer of River Eddy Capital Management, favored energy, aircraft leasing and 5G infrastructure development stocks in a February 2021 episode.
Among energy stocks, Schmidt liked natural gas transmission company Equitrans Midstream (ETRN).
“No matter what you think about the price of natural gas, it needs to be moved,” he said. “And we have the cheapest natural gas in the world, except for Saudi Arabia.”
Airline leasing companies were a “fantastic idea” due to “pent-up demand.”
His picks were AerCap (AER) Air Lease Corporation (AL).
Schmidt also said 5G infrastructure developers would be big players, with Nokia (NOK) and Ericsson (ERIC) at the forefront.
“Interestingly, Nokia is the only one out of those three that has supply in the United States to all the legacy carriers,” he said.
ETRN gained 29% in calendar 2021, as AER and NOK added 44% and 59%, respectively. AL was effectively flat for the year, giving up 0.4% while ERIC was down 9%.
While cleaner energy is becoming more popular with the public, Schmidt doesn’t anticipate that “we can possibly make a jump [to clean energy] and natural gas is the cleanest fuel,” he said on a Zoom call on March 23, 2022.
Schmidt said he is “still bullish on [energy], and I have a lot and I would add more” because he believes in the longevity of natural gas as well as the recent development of pipelines,
He anticipates his aircraft leasing picks suffering because of the war in Ukraine.
“We’’ve had a lot of problems lately because of the Ukrainian war [with the] number of aircraft that they [aircraft leasing companies] have that are stuck in the Ukraine,” he said.
Schmidt returns to the Contrarian Investor Podcast on April 6. The recording will be made available to premium subscribers that day.