On speculation Joe Biden could win the election, clean energy stocks are pushing higher.
All as investors get swept up by the possibility he could win. Plus, he reportedly has a $2 trillion sustainable energy infrastructure plan that could make the U.S. carbon free by 2035.
“Assuming Joe Biden is elected and the Democrats have a majority in both houses of Congress, then investments in infrastructure stocks (or infrastructure ETFs) should receive a high priority,” says David Kass, Clinical Professor Finance at the University of Maryland’s Robert H. Smith School of Business. “Climate related opportunities in solar and wind power, batteries for electric vehicles and electric vehicle manufacturers should be explored.”
In fact, here are the top 7 clean energy stocks to keep an eye on:
- iShares Global Clean Energy ETF (NASDAQ:ICLN)
- ALPS Clean Energy ETF (BATS:ACES)
- First Solar (NASDAQ:FSLR)
- Enphase Energy (NASDAQ:ENPH)
- SolarEdge Technologies (NASDAQ:SEDG)
- Ballard Power Systems (NASDAQ:BLDP)
- Plug Power (NASDAQ:PLUG)
At this point, no one is quite sure who could win. And I’m not about to share political opinions here because they have no place in this article. What I simply want to do is share some of the top clean energy stocks piquing interest on a potential Biden win.
Clean Energy Stocks to Watch: iShares Global Clean Energy ETF (ICLN)
The ICLN ETF gives investors exposure to companies producing energy from solar, wind and other renewable energy sources. Since June, the ETF has exploded from a low of $12 to current prices around $19.68. From here, I strongly believe it could run well above $25 a share as millions of people push for a greener future.
The other reason I like this and other ETFs is because you can own more for less. With the ICLN ETF for example, investors can gain exposure to dozens of clean energy stocks like First Solar, Enphase Energy, Vestas Wind Systems (OTC:VWDRY), Plug Power, Sunrun Inc. (NASDAQ:RUN), and Canadian Solar (NASDAQ:CSIQ). All for $19.64 a share.
In short, you can diversify among dozens of names, and pay a fraction of the cost of buying just a single share of each stock.
ALPS Clean Energy ETF (ACES)
With the ACE ETF, you can own dozens of clean energy stocks for $56.50 a share. Some of ACES top holdings include Tesla (NASDAQ:TSLA), Plug Power, Ballard Power Systems, Cree Inc. (NASDAQ:CREE), and Brookfield Renewable Partners (NYSE:BEP).
It’s another high-flying green trade that’s run from a July low of $37.50 to $56.50. From here, I believe the ETF could double, if not triple with patience.
That’s especially true, given its exposure to the green hydrogen opportunity.
Goldman Sachs is already calling green hydrogen a “once in a lifetime opportunity,” says Barron’s. They also note the addressable market could be worth up to $11.7 trillion in the next 30 years with the U.S., Asia and Europe leading the way.
First Solar (FSLR)
First Solar has been just as explosive, running up from a July low of $50 on Biden speculation as well. After bottoming out at $60 in September, the stock has since climbed to $81.
“As GM continues its transition to an all-electric, zero-emissions future, it is imperative that we also invest in a cleaner grid that can support everything — from our factories to our vehicles. Investments like these have increased access to renewable power, and with this deal we are exploring the next frontier of renewable energy, which integrate the principles of circularity and energy storage, among others.”
In addition, First Solar is set to release earnings on Oct. 27. Analysts are looking for EPS of 61 cents on sales of $693 million.
Enphase Energy (ENPH)
Enphase is another explosive opportunity that’s popped from a June low of $40 to more than $99 a share. We could see higher highs here too.
It’s also quickly expanding its presence around the world. Not only did it just expand into the home energy market, it also entered into three solar distribution companies in Belgium and the Netherlands — Carbomat Group, Libra Energy and Solarclarity — further strengthening Enphase’s presence in the European solar market.
With regards to earnings, while year-over-year Q2 revenues were down 6.94%. the company did post record gross margins of 39.6% on a non-GAAP basis. The company is expected to post third quarter results on October 27 after the closing bell.
SolarEdge Technologies (SEDG)
SolarEdge Technologies is an Israeli solar energy company that creates smart solar solutions that provides inverters, photovoltaic monitoring and power harvesting accessories. Since bottoming out around $70 in March, SolarEdge Technologies exploded to $269 a share. This is another name running off anticipatory momentum ahead of the elections.
In its most recent earnings report, both revenue and GAAP EPS beat expectations, by $12.3 million and 22 cents respectively. However, compared to the second quarter last year, revenue dropped 23% to $331.9 million.
While there were some negatives over the last year, the company and its stock have remained resilient. “This quarter, despite the challenges caused by COVID 19, we maintained healthy profitability while generating cash from operating activity,” said Zivi Lando, CEO of SolarEdge.
“Our global strength, and in particular our loyal customer base in the Netherlands, Germany, Italy and Australia, softened the decline in U.S. demand this past quarter. While the pandemic has created many operational challenges, I am confident in our financial strength and grateful for the trust of our customers and dedication of our employees which enable us to continue to focus on product innovation and execution of our long term plans even in these challenging times.”
Ballard Power Systems (BLDP)
Analysts love Ballard Power Systems. Over the last few weeks, Bernstein upgraded the stock to a buy with a $22 price target. TD Securities upgraded the stock to a speculative buy from a hold rating. And National Bank upgraded BLDP to a buy from a hold, as well.
“The push for hydrogen is global and gaining steam,” National Bank analyst Rupert Merer told Barron’s.
“Regulations have advanced in Europe and the U.S. to transition bus and trucks to zero emission. In China…a detailed hydrogen plan could come soon and target 1 [million] hydrogen vehicles by 2030.”
Plug Power (PLUG)
Plug Power will source renewables energy from Canada’s Brookfield Renewables Partners and use it for the production of green hydrogen.
In addition, according to the company, “Plug Power customer demand for hydrogen has grown 10x in five years — nearly a 200% annual growth rate. From a market perspective, McKinsey expects hydrogen will provide 18% of global energy by 2050. As the world’s largest supplier and user of liquid hydrogen, we’re positioned as the forward-thinking company, leading the expansion of green hydrogen technologies while growing their use into a range of transportation and stationary power applications.”
“We’re projecting using more than 80 tons of hydrogen in 2024, and have made a commitment to achieve 50% green content,” they added.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.