When the biggest company in America is reported to be, for the first time in a generation, bringing some of its high-tech computer manufacturing back to plants on the home front from those in Asia, something has to be going on. At the very least, it merits further investigation into why Apple (AAPL) suddenly decided to assemble iMacs in the U.S.
For Jeff Saut, chief investment strategist at Raymond James, this new reality is not only part of what he expects will be a growing trend, but also an indirect endorsement for the country's cheap and reliable energy.
"I think the real story is that the U.S. is likely going to be the low cost center of energy outside of the Middle East," Saut says in the attached video. "But who wants to build a plant there?"
Further supporting this on-shoring fad, Saut says, is the reality that oil prices are set to come down next year to around $65/barrel, as well as the benefit of historically low inflation and borrowing costs. The combined effect of all of this is leading to increased use of robotics and automation and he says "there's no incentive to build a plant in China, you don't need to go to the low cost labor provider."
Instead he predicts businesses will look to build new plants ''where you have the lowest cost of energy, which is very likely going to be the U.S. over the next ten years, so I am all about the re-industrialization theme."
Because of this, the Florida-based strategist says Energy (XLE) remains one of his favorite sectors with a more detailed interest in drillers (OIH) as well as some of the limited partnership pipeline operators (AMLP), while admitting he's a little cautious on the refiners right now due to the tight margins in the gasoline business (UGA).