Gabelli Love Our Planet & People ETF Q1 2026 Commentary

AI infrastructure buildout, especially efficient and climate-friendly power generation and transmission, remained a major return driver. Deere & Company and CNH Industrial rebounded as inventory was reduced faster than expected and sales of environmentally friendly precision agriculture products came in stronger than anticipated. Mirion Technologies gave back some gains after rallying 70% in 2025, tempering the overall tone.

Analysis

The market is increasingly pricing AI not as a software story but as a utilities-and-electrification bottleneck, which is why the embedded winners are the grid, transformers, and generation stack rather than the compute names themselves. That creates a multi-year capex flywheel: once hyperscalers and utilities lock in power procurement, suppliers tied to efficiency, transmission, and backup systems get repeat orders with less cyclicality than headline AI spend. The second-order implication is that industrials with genuine precision/automation exposure can rerate even if end-demand is only modestly improving, because customers are optimizing for uptime and input efficiency rather than broad expansion.

DE and CNH look like beneficiaries of a cleaner inventory channel and a better mix, but the real signal is that demand is becoming more quality-driven. If farmers are willing to pay for precision products now, that suggests budget allocation is shifting toward ROI-positive equipment rather than pure replacement, which usually supports margin durability for several quarters. The risk is that this is still an inventory digestion trade at heart; if dealer restocking overshoots or commodity prices weaken, the rebound can fade quickly within one or two quarters.

MIR’s pullback after a strong run looks more like multiple compression than a fundamental break, but the setup is fragile because a 70% move tends to pull forward several years of optimism. The consensus may be underestimating how much of the nuclear/healthcare safety premium is already in the stock, especially if investors rotate toward cheaper beneficiaries of the same infrastructure buildout. The cleaner contrarian angle is to prefer names with direct capex leverage and less valuation risk, while treating MIR as a trading vehicle until the next contract or order-cycle catalyst.

Key Decisions for Investors

• Long DE on any 3%-5% pullback over the next 2-4 weeks; target 10%-15% upside over 3-6 months if precision-ag adoption stays firm, with downside limited to a retracement if ag commodity prices weaken.
• Long CNH vs. short a broader industrial basket for a 1-2 quarter window; thesis is that inventory normalization plus precision mix can outpace generic cyclicals, with a favorable 1:2 risk/reward if dealer replenishment continues.
• Avoid chasing MIR here; use rallies to trim or hedge into strength over the next 1-3 months. If holding, consider buying protective puts 6-9 months out to defend against post-rerating compression.
• Consider a thematic pair: long grid/power-enablement exposure against short software-only AI proxies for a 6-12 month horizon. The upside comes from the market repricing scarcity in electricity and transmission rather than model-layer enthusiasm.
• If DE and CNH confirm with another quarter of improved orders, add to a medium-term long only after the next earnings print; the risk/reward is better once managements validate that this is demand-led, not just channel destocking.