Santa came early with a present for holders of Conservative Portfolio Holding Duke Energy International Geracao Paranapanema (OTC: DEIPY): the stock skyrocketed 54.5% on Dec. 11, closing at $33.17.

This represents a gain of 20.62% on the holding since we put it in the portfolio in August, and it’s been a hard-won gain. The stock was down by that much in October as a result of the sell-off in reaction to the Brazilian presidential election, where the winner’s policies are clearly not business friendly.

Further, Brazil has been suffering a drought over the last few years, which has been a concern for its majority shareholder, Duke Energy. Duke Energy has put the company under a “strategic review.”

The stock increase could be because of a recent forecast that the outlook for rainfall looks favorable in the short term. An official of the electric grid operator ONS said on Dec. 4 that Brazilian rainfall may exceed the monthly average in December, alleviating a drought that has curtailed hydroelectric supplies and had been hurting DEIPY’s earnings, according to a Bloomberg news report 

This is clearly good news for DEIPY. But for investors there is still too much uncertainty on too many fronts: Rainfall, Duke Energy’s intentions and the political situation.  

That’s why we advise to take that 20% gain and put it in your holiday stocking. DEIPY is a SELL.

Happy Holidays!

– Richard Stavros, Chief Investment Strategist