10 Best Energy Equipment for January 2026
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Market Overview & Selection Criteria
The energy and industrial equipment sector presents compelling opportunities for value-focused investors in 2026. This collection spans renewable energy infrastructure, oil services, and specialized manufacturing—sectors benefiting from global energy transition initiatives, infrastructure investment, and operational efficiency improvements. Our selection methodology prioritizes companies with strong free cash flow generation, reasonable debt levels, and catalysts for revenue growth. We've identified 10 stocks demonstrating varying risk-return profiles, from established energy services leaders to high-growth renewable energy innovators. Each company has been analyzed using ValueSense's intrinsic value framework, quality ratings, and fundamental metrics to provide a comprehensive watchlist for diversified portfolio construction.
Featured Stock Analysis
Stock #1: GE Vernova Inc. (GEV)
| Metric | Value |
|---|---|
| Market Cap | $183.0B |
| Quality Rating | 6.0 |
| Intrinsic Value | $228.5 |
| 1Y Return | 100.7% |
| Revenue | $37.7B |
| Free Cash Flow | ($1,563.0M) |
| Revenue Growth | 9.4% |
| FCF margin | (4.1%) |
| Gross margin | 19.5% |
| ROIC | 0.7% |
| Total Debt to Equity | 0.0% |
Investment Thesis
GE Vernova Inc. represents a significant play on the global energy transition, with a market capitalization of $183.0B and exceptional recent performance. The company has delivered a 100.7% one-year return, reflecting strong investor confidence in its renewable energy and grid solutions positioning. With $37.7B in annual revenue and a quality rating of 6.0, GEV operates at scale within the clean energy infrastructure space. The company's intrinsic value of $228.5 suggests potential upside from current valuations, though investors should note the company is in a growth investment phase with negative free cash flow of $1,563.0M, indicating reinvestment in capacity expansion and product development.
The revenue growth rate of 9.4% demonstrates steady expansion, while the gross margin of 19.5% reflects typical capital-intensive business economics. With zero debt-to-equity ratio, GEV maintains a fortress balance sheet, providing financial flexibility for strategic investments and acquisitions. The minimal ROIC of 0.7% indicates the company is still ramping profitability as it scales operations—a common pattern for infrastructure-focused growth companies.
Key Catalysts
- Global renewable energy adoption and grid modernization initiatives
- Expansion of manufacturing capacity for energy transition equipment
- Potential government incentives and infrastructure spending
- Market share gains in wind and solar equipment segments
- Margin expansion as production volumes increase
Risk Factors
- Negative free cash flow requires ongoing capital raises or debt financing
- Execution risk on capacity expansion and product launches
- Cyclical exposure to energy infrastructure spending cycles
- Supply chain dependencies for critical components
- Competition from established industrial conglomerates
Stock #2: Sea Limited (SE)
| Metric | Value |
|---|---|
| Market Cap | $77.1B |
| Quality Rating | 7.4 |
| Intrinsic Value | $132.1 |
| 1Y Return | 25.4% |
| Revenue | $21.1B |
| Free Cash Flow | $3,177.6M |
| Revenue Growth | 36.0% |
| FCF margin | 15.1% |
| Gross margin | 44.9% |
| ROIC | 12.5% |
| Total Debt to Equity | 41.2% |
Investment Thesis
Sea Limited stands out as a high-quality growth company with a quality rating of 7.4 and exceptional operational metrics. The Singapore-based technology conglomerate operates across e-commerce, digital payments, and gaming, generating $21.1B in annual revenue with a remarkable 36.0% revenue growth rate. The company's 25.4% one-year return reflects solid performance, while the intrinsic value of $132.1 suggests reasonable valuation relative to growth prospects. With a market cap of $77.1B, SE demonstrates the scale and profitability profile of a mature growth platform.
The financial metrics reveal a business model in transition toward profitability: 15.1% free cash flow margin, 44.9% gross margin, and 12.5% ROIC indicate strong unit economics and capital efficiency. The company has successfully monetized its massive user base across Southeast Asia while maintaining disciplined cost management. Debt-to-equity of 41.2% is moderate for a technology platform, reflecting balanced capital structure management.
Key Catalysts
- Continued e-commerce penetration in Southeast Asian markets
- Digital payments ecosystem expansion and cross-selling opportunities
- Gaming segment profitability improvements
- Potential margin expansion from operating leverage
- Strategic partnerships and geographic expansion initiatives
Risk Factors
- Competitive intensity in e-commerce and fintech sectors
- Regulatory changes in Southeast Asian markets
- Currency fluctuation exposure across multiple countries
- Dependence on sustained consumer spending growth
- Execution risk on profitability targets
Stock #3: Schlumberger Limited (SLB)
| Metric | Value |
|---|---|
| Market Cap | $57.7B |
| Quality Rating | 6.1 |
| Intrinsic Value | $32.3 |
| 1Y Return | 4.7% |
| Revenue | $35.2B |
| Free Cash Flow | $4,030.0M |
| Revenue Growth | (2.1%) |
| FCF margin | 11.4% |
| Gross margin | 19.1% |
| ROIC | 9.8% |
| Total Debt to Equity | 47.4% |
Investment Thesis
Schlumberger Limited is a diversified oilfield services leader with $57.7B in market capitalization and established global operations. The company generated $35.2B in revenue with a quality rating of 6.1, demonstrating scale and operational maturity. While the one-year return of 4.7% appears modest, the intrinsic value of $32.3 indicates potential undervaluation. The company's 11.4% free cash flow margin and $4,030.0M in annual free cash flow generation provide substantial capital for dividends, buybacks, and strategic investments.
Despite a slight revenue decline of 2.1%, SLB maintains solid profitability with 9.8% ROIC and 19.1% gross margin. The debt-to-equity ratio of 47.4% reflects typical leverage for established energy services companies. As global energy demand remains robust and offshore exploration activity increases, SLB's diversified service portfolio positions it to benefit from both traditional and renewable energy infrastructure development.
Key Catalysts
- Recovery in offshore exploration and production activity
- Increased demand for well completion and production optimization services
- Digital transformation and AI-driven oilfield solutions adoption
- Potential strategic acquisitions or divestitures
- Energy transition services expansion
Risk Factors
- Cyclical exposure to oil and gas capital expenditure cycles
- Geopolitical risks affecting global operations
- Energy transition could reduce long-term demand for traditional services
- Execution risk on digital transformation initiatives
- Competitive pressure from regional service providers
Stock #4: Baker Hughes Company (BKR)
| Metric | Value |
|---|---|
| Market Cap | $45.6B |
| Quality Rating | 6.9 |
| Intrinsic Value | $34.5 |
| 1Y Return | 14.0% |
| Revenue | $27.7B |
| Free Cash Flow | $2,685.0M |
| Revenue Growth | 1.5% |
| FCF margin | 9.7% |
| Gross margin | 22.8% |
| ROIC | 13.5% |
| Total Debt to Equity | 33.0% |
Investment Thesis
Baker Hughes represents a quality-focused energy services play with a quality rating of 6.9 and $45.6B in market capitalization. The company generated $27.7B in revenue with a 14.0% one-year return, reflecting steady operational execution. The intrinsic value of $34.5 suggests reasonable valuation, while the 9.7% free cash flow margin and $2,685.0M in annual free cash flow demonstrate strong cash generation capabilities. BKR's 13.5% ROIC indicates efficient capital deployment and competitive advantages in its service segments.
The company's 22.8% gross margin and modest 1.5% revenue growth reflect a mature, profitable business model focused on operational excellence and cost management. With a debt-to-equity ratio of 33.0%, BKR maintains a conservative balance sheet suitable for returning capital to shareholders. The company's diversified service offerings across drilling, completions, and production solutions provide resilience across energy market cycles.
Key Catalysts
- Increased drilling activity in key basins globally
- Adoption of advanced completion technologies
- Margin expansion from operational efficiency initiatives
- Potential strategic acquisitions in adjacent markets
- Energy transition service offerings expansion
Risk Factors
- Exposure to oil and gas capital expenditure cycles
- Competitive pricing pressure in mature service markets
- Technology disruption from autonomous and AI-driven solutions
- Geopolitical risks affecting international operations
- Execution risk on margin improvement initiatives
Stock #5: First Solar, Inc. (FSLR)
| Metric | Value |
|---|---|
| Market Cap | $29.4B |
| Quality Rating | 7.4 |
| Intrinsic Value | $182.2 |
| 1Y Return | 47.1% |
| Revenue | $5,050.6M |
| Free Cash Flow | $614.5M |
| Revenue Growth | 31.2% |
| FCF margin | 12.2% |
| Gross margin | 40.0% |
| ROIC | 16.2% |
| Total Debt to Equity | 6.2% |
Investment Thesis
First Solar emerges as a premium renewable energy play with a quality rating of 7.4 and exceptional growth metrics. The company's $29.4B market capitalization reflects strong investor recognition of its position in the solar photovoltaic manufacturing sector. The 47.1% one-year return demonstrates significant momentum, while the intrinsic value of $182.2 suggests substantial upside potential. FSLR generated $5,050.6M in revenue with an impressive 31.2% growth rate, indicating robust demand for its thin-film solar technology.
The financial profile is particularly attractive: 12.2% free cash flow margin, 40.0% gross margin, and 16.2% ROIC demonstrate a highly profitable and capital-efficient business model. The company's minimal debt-to-equity ratio of 6.2% provides financial flexibility for growth investments and shareholder returns. As global solar capacity additions accelerate and manufacturing costs decline, FSLR's advanced technology and manufacturing scale position it to capture significant market share.
Key Catalysts
- Accelerating global solar capacity additions and grid modernization
- Expansion of manufacturing capacity in strategic markets
- Technology improvements driving cost reductions and efficiency gains
- Government incentives for domestic solar manufacturing
- Potential strategic partnerships or supply agreements
Risk Factors
- Intense competition from Chinese solar manufacturers
- Commodity price volatility affecting input costs
- Execution risk on capacity expansion projects
- Regulatory changes affecting solar incentives
- Technology obsolescence risk from next-generation solar solutions
Stock #6: Halliburton Company (HAL)
| Metric | Value |
|---|---|
| Market Cap | $25.0B |
| Quality Rating | 5.8 |
| Intrinsic Value | $19.6 |
| 1Y Return | 7.5% |
| Revenue | $22.1B |
| Free Cash Flow | $1,874.0M |
| Revenue Growth | (4.1%) |
| FCF margin | 8.5% |
| Gross margin | 4.6% |
| ROIC | 19.2% |
| Total Debt to Equity | 83.6% |
Investment Thesis
Halliburton Company represents a value-oriented energy services investment with a quality rating of 5.8 and $25.0B in market capitalization. The company generated $22.1B in revenue with a modest 7.5% one-year return, reflecting a mature business navigating energy market transitions. The intrinsic value of $19.6 suggests potential undervaluation relative to cash generation capabilities. HAL's 8.5% free cash flow margin and $1,874.0M in annual free cash flow provide substantial capital for shareholder distributions.
The company's standout metric is its 19.2% ROIC, indicating exceptional capital efficiency and competitive advantages in its service segments. However, the 4.6% gross margin reflects intense competition and commodity-like pricing in certain service lines. The debt-to-equity ratio of 83.6% is elevated, requiring careful monitoring but typical for mature energy services companies with stable cash flows. The 4.1% revenue decline indicates headwinds in traditional oilfield services, necessitating strategic repositioning.
Key Catalysts
- Recovery in international drilling activity and well completions
- Digital transformation and software solutions adoption
- Margin expansion from operational efficiency initiatives
- Potential strategic divestitures or restructuring
- Energy transition service offerings development
Risk Factors
- High leverage limits financial flexibility
- Declining traditional oilfield services demand
- Intense competitive pressure on pricing
- Execution risk on digital transformation
- Geopolitical risks affecting international operations
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Stock #7: Bloom Energy Corporation (BE)
| Metric | Value |
|---|---|
| Market Cap | $22.6B |
| Quality Rating | 7.5 |
| Intrinsic Value | $18.8 |
| 1Y Return | 322.3% |
| Revenue | $1,818.7M |
| Free Cash Flow | $135.2M |
| Revenue Growth | 44.5% |
| FCF margin | 7.4% |
| Gross margin | 33.2% |
| ROIC | 7.4% |
| Total Debt to Equity | 223.8% |
Investment Thesis
Bloom Energy represents a high-growth clean energy technology play with a quality rating of 7.5 and exceptional recent performance. The company's 322.3% one-year return reflects extraordinary investor enthusiasm for its solid oxide fuel cell technology and distributed energy solutions. With a $22.6B market capitalization and $1,818.7M in revenue, BE is scaling rapidly with a 44.5% revenue growth rate. The intrinsic value of $18.8 suggests the market has priced in significant future growth expectations.
The company demonstrates strong operational metrics with 33.2% gross margin and 7.4% free cash flow margin, indicating a business model transitioning toward profitability. The 7.4% ROIC reflects early-stage capital deployment as the company scales manufacturing and customer acquisition. However, the elevated debt-to-equity ratio of 223.8% warrants careful consideration, as it indicates significant financial leverage relative to current profitability levels. This leverage structure requires successful execution on growth and profitability targets.
Key Catalysts
- Accelerating adoption of distributed energy and fuel cell solutions
- Expansion of manufacturing capacity and supply chain
- Government incentives for clean energy technology
- Potential strategic partnerships with major industrial customers
- Technology improvements and cost reductions
Risk Factors
- Extremely high financial leverage relative to profitability
- Execution risk on manufacturing scale-up
- Technology adoption uncertainty in target markets
- Competitive threats from alternative energy solutions
- Potential dilution from future capital raises
Stock #8: Tenaris S.A. (TS)
| Metric | Value |
|---|---|
| Market Cap | $20.9B |
| Quality Rating | 6.7 |
| Intrinsic Value | $46.4 |
| 1Y Return | 4.0% |
| Revenue | $11.9B |
| Free Cash Flow | $1,661.1M |
| Revenue Growth | (9.4%) |
| FCF margin | 14.0% |
| Gross margin | 34.1% |
| ROIC | 14.4% |
| Total Debt to Equity | 2.8% |
Investment Thesis
Tenaris S.A. is a global leader in steel pipe manufacturing with a quality rating of 6.7 and $20.9B in market capitalization. The company generated $11.9B in revenue with a 4.0% one-year return, reflecting stable operations in a cyclical industry. The intrinsic value of $46.4 suggests potential undervaluation relative to cash generation capabilities. TS demonstrates exceptional financial discipline with 14.0% free cash flow margin, $1,661.1M in annual free cash flow, and a fortress balance sheet with only 2.8% debt-to-equity ratio.
The company's 14.4% ROIC and 34.1% gross margin indicate strong competitive positioning and pricing power in premium pipe segments. However, the 9.4% revenue decline reflects cyclical headwinds in oil and gas infrastructure spending. As global energy infrastructure investment accelerates and offshore exploration activity increases, TS's diversified customer base and manufacturing scale position it to benefit from recovery cycles.
Key Catalysts
- Recovery in offshore exploration and production drilling
- Increased demand for premium pipe products
- Margin expansion from operational leverage
- Potential strategic acquisitions or partnerships
- Energy transition infrastructure investments
Risk Factors
- Cyclical exposure to oil and gas capital expenditure
- Commodity steel price volatility
- Geopolitical risks affecting international operations
- Energy transition could reduce long-term demand
- Execution risk on cost management initiatives
Stock #9: Huntington Ingalls Industries, Inc. (HII)
| Metric | Value |
|---|---|
| Market Cap | $13.6B |
| Quality Rating | 5.9 |
| Intrinsic Value | $426.6 |
| 1Y Return | 87.9% |
| Revenue | $12.0B |
| Free Cash Flow | $823.0M |
| Revenue Growth | 2.6% |
| FCF margin | 6.9% |
| Gross margin | 27.6% |
| ROIC | 5.4% |
| Total Debt to Equity | 58.7% |
Investment Thesis
Huntington Ingalls Industries represents a defense and specialized manufacturing opportunity with a quality rating of 5.9 and $13.6B in market capitalization. The company's 87.9% one-year return reflects strong investor confidence in defense sector dynamics and operational execution. HII generated $12.0B in revenue with modest 2.6% growth, indicating a mature business focused on profitability and capital returns. The intrinsic value of $426.6 suggests significant upside potential from current valuations.
The company's 6.9% free cash flow margin and $823.0M in annual free cash flow provide substantial capital for shareholder distributions and debt reduction. The 27.6% gross margin reflects the specialized nature of defense contracting and engineering services. However, the 5.4% ROIC and 58.7% debt-to-equity ratio indicate leverage relative to profitability, requiring careful monitoring. As defense spending remains elevated and naval modernization programs accelerate, HII's specialized capabilities position it favorably.
Key Catalysts
- Increased defense spending and naval modernization programs
- Expansion of submarine and surface ship construction
- Potential new contract awards and program extensions
- Margin expansion from operational efficiency
- Strategic acquisitions in adjacent defense markets
Risk Factors
- Dependence on government defense spending and budgets
- Program delays or cancellations affecting revenue
- High leverage limits financial flexibility
- Execution risk on large, complex programs
- Competitive bidding pressure on contract awards
Stock #10: Westlake Corporation (WLK)
| Metric | Value |
|---|---|
| Market Cap | $9,561.8M |
| Quality Rating | 4.9 |
| Intrinsic Value | $216.3 |
| 1Y Return | -33.6% |
| Revenue | $11.5B |
| Free Cash Flow | ($126.0M) |
| Revenue Growth | (5.3%) |
| FCF margin | (1.1%) |
| Gross margin | 8.6% |
| ROIC | (5.8%) |
| Total Debt to Equity | 7.5% |
Investment Thesis
Westlake Corporation presents a challenging value opportunity with a quality rating of 4.9 and $9,561.8M in market capitalization. The company's 33.6% one-year return reflects significant headwinds, while the intrinsic value of $216.3 suggests potential undervaluation if operational challenges reverse. WLK generated $11.5B in revenue but faced a 5.3% revenue decline, indicating cyclical or structural pressures in its chemical and plastics segments. The negative free cash flow of $126.0M and 1.1% FCF margin demonstrate current profitability challenges.
The company's 8.6% gross margin and 5.8% ROIC indicate margin compression and capital inefficiency, suggesting operational difficulties or competitive pressures. However, the modest 7.5% debt-to-equity ratio provides financial flexibility for restructuring or strategic initiatives. This stock represents a turnaround opportunity for value investors willing to accept higher risk in exchange for potential recovery upside if management successfully executes operational improvements.
Key Catalysts
- Recovery in chemical and plastics demand cycles
- Operational efficiency improvements and cost reduction initiatives
- Potential strategic acquisitions or divestitures
- Margin expansion from pricing power or cost management
- Capital allocation improvements and shareholder returns
Risk Factors
- Negative free cash flow and profitability challenges
- Cyclical exposure to chemical and plastics markets
- Competitive pricing pressure in commodity segments
- Execution risk on turnaround initiatives
- Potential need for additional capital raises or debt restructuring
Portfolio Diversification Insights
This 10-stock collection provides meaningful diversification across the energy and industrial equipment landscape. The portfolio spans renewable energy infrastructure (GE Vernova, First Solar, Bloom Energy), traditional energy services (Schlumberger, Baker Hughes, Halliburton, Tenaris), technology and digital platforms (Sea Limited), defense and specialized manufacturing (Huntington Ingalls), and chemical manufacturing (Westlake).
The quality ratings range from 4.9 to 7.5, allowing investors to calibrate risk exposure based on preferences. High-quality names like Sea Limited 7.4, First Solar 7.4, and Bloom Energy 7.5 offer growth with operational maturity, while lower-rated names like Westlake 4.9 and Halliburton 5.8 present turnaround opportunities for value-oriented investors.
From a sector perspective, the portfolio is heavily weighted toward energy and industrial equipment, reflecting the current investment thesis around global energy transition, infrastructure modernization, and defense spending. The inclusion of Sea Limited provides technology and emerging market exposure, reducing concentration risk in traditional cyclical sectors.
Free cash flow generation varies significantly, from negative (GE Vernova, Westlake) to strong positive (Schlumberger, Baker Hughes, Tenaris). This diversity allows portfolio construction based on income generation preferences or growth investment priorities. Debt levels range from fortress balance sheets (GE Vernova at 0%, Tenaris at 2.8%, First Solar at 6.2%) to elevated leverage (Bloom Energy at 223.8%, Halliburton at 83.6%), enabling risk-adjusted positioning.
Market Timing & Entry Strategies
Sector Rotation Considerations: The energy and industrial equipment sectors have demonstrated cyclical patterns tied to commodity prices, capital expenditure cycles, and macroeconomic conditions. Current market dynamics suggest favorable conditions for energy infrastructure investment, driven by global energy transition initiatives, government incentives, and infrastructure spending. Investors should consider building positions gradually rather than deploying capital in a single transaction, allowing for dollar-cost averaging across market volatility.
Valuation-Based Entry Points: ValueSense's intrinsic value calculations provide reference points for entry decisions. Stocks trading below intrinsic value (such as Halliburton at $19.6 intrinsic value, Tenaris at $46.4, and Westlake at $216.3) may present attractive entry opportunities for patient investors. Conversely, stocks trading above intrinsic value (such as GE Vernova at $228.5 and Bloom Energy at $18.8) may warrant waiting for pullbacks or accumulating smaller positions.
Growth vs. Value Positioning: High-growth names like Sea Limited (36% revenue growth), Bloom Energy (44.5% revenue growth), and First Solar (31.2% revenue growth) may warrant smaller initial positions given valuation premiums, with plans to add on weakness. Mature, cash-generative names like Schlumberger, Baker Hughes, and Tenaris may support larger positions given stable cash flows and dividend potential.
Risk Management: Given the portfolio's exposure to cyclical sectors, investors should establish position sizing guidelines based on risk tolerance. The elevated leverage in Bloom Energy (223.8% debt-to-equity) and Halliburton 83.6% warrants smaller positions or careful monitoring. Conversely, fortress balance sheet companies like GE Vernova and Tenaris may support larger allocations.
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FAQ Section
Q1: How were these stocks selected for this watchlist?
These 10 stocks were selected based on ValueSense's fundamental analysis framework, focusing on companies within the energy and industrial equipment sectors demonstrating meaningful free cash flow generation, reasonable valuation relative to intrinsic value, and catalysts for growth or operational improvement. The selection prioritizes quality ratings, ROIC, and margin profiles while maintaining sector and risk diversification. Each company represents distinct investment characteristics, from high-growth renewable energy plays to mature cash-generative energy services leaders.
Q2: Which stock from this list offers the best risk-adjusted opportunity?
First Solar (FSLR) and Sea Limited (SE) stand out as quality-focused opportunities with strong operational metrics. First Solar combines 31.2% revenue growth with 16.2% ROIC, 40% gross margin, and minimal leverage (6.2% debt-to-equity), positioning it favorably for renewable energy adoption. Sea Limited demonstrates 36% revenue growth, 12.5% ROIC, and 44.9% gross margin with moderate leverage (41.2% debt-to-equity). Both companies offer growth with operational quality, though investors should assess valuation relative to intrinsic value before committing capital.
Q3: Should I buy all these stocks or focus on a subset for diversification?
Portfolio construction depends on individual investment objectives, risk tolerance, and capital availability. A diversified approach might include 4-6 stocks representing different sectors and risk profiles: one or two high-quality growth names (First Solar, Sea Limited), one or two mature cash-generative names (Schlumberger, Baker Hughes), one renewable energy play (Bloom Energy or GE Vernova), and one value/turnaround opportunity (Westlake or Halliburton). This approach balances growth, income, and value characteristics while managing concentration risk.
Q4: What are the biggest risks with these stock picks?
The portfolio faces several interconnected risks: cyclical exposure to energy capital expenditure cycles (affecting Schlumberger, Baker Hughes, Halliburton, Tenaris), execution risk on growth initiatives (GE Vernova, Bloom Energy, First Solar), leverage risk (Bloom Energy at 223.8% debt-to-equity, Halliburton at 83.6%), and energy transition uncertainty (traditional energy services companies may face long-term demand headwinds). Additionally, Westlake faces near-term profitability challenges with negative free cash flow, requiring successful turnaround execution.
Q5: When is the best time to invest in these stocks?
Optimal entry timing depends on individual circumstances and market conditions. ValueSense's intrinsic value calculations provide reference points: stocks trading below intrinsic value may present attractive entry opportunities, while those trading above may warrant waiting for pullbacks. Dollar-cost averaging over 3-6 months reduces timing risk, particularly for volatile stocks like Bloom Energy and Westlake. Investors should also consider sector cycles: energy services stocks may offer better entry points during periods of depressed commodity prices, while renewable energy stocks may be attractive during policy support announcements.