Undervalued renewable energy stocks are struggling. Companies are canceling projects as prices spiral out of control. Auto companies like General Motors (NYSE:GM) and Ford (NYSE:F) are delaying electric vehicle rollouts because of slowing demand. Solar companies are seeing massive reductions in homeowner demand. In fact, demand for solar panels in California is down 80%.
The fallout can be seen in exchange-traded funds like Invesco WilderHill Clean Energy (NYSEARCA:PBW). It’s down nearly 51% in a year. Shares of First Solar (NASDAQ:FSLR) are down about 16.5% over the last year. Even SolarEdge (NASDAQ:SEDG) is down 80%. Not helping, interest rates are perched at a 22-year high of 5.4%, driving up borrowing costs.
However, there are undervalued renewable energy stocks you may want to consider today.
NexGen Energy (NXE)
Look at uranium stocks, like NexGen (NYSE:NXE), for example.
Since mid-2023, NXE rallied from a low of about $3.90 to a recent high of $7.90. But its run is far from over. Thanks to supply-demand issues, uranium prices are now at a 16-year high. Fueling upside, mining company Kazatomprom, which produces 43% of the world’s uranium supply, warned it’ll fall short of production targets through 2025.
Other uranium producers, like Cameco (NYSE:CCJ) are lowering production numbers, or shutting down mines altogether. Yet, demand shows no signs of slowing down.
“There’s no other way to meet those net-zero carbon goals other than nuclear energy,” said Nicole Galloway Warland, managing director of Thor Energy (OTCMKTS:THORF).
Next, with the global community intensifying its fight against climate change, nuclear energy is emerging as a solution. Unfortunately, supply issues are getting in the way. In fact, some analysts are saying there may not be enough supply to go around.
BHP Group (BHP)
Or, take a look at undervalued copper stocks, like BHP (NYSE:BHP).
After slipping from about $69 to a low of $59.17, BHP is showing signs of life because of a severe supply-demand issue, too.
For one, with mining disruptions and sky-high demand, copper prices could soar another 75%, says CNBC.
“Rising demand driven by the green energy transition and a likely decline in the U.S. dollar in the second half of 2024 will push copper prices higher, added BMI, a Fitch Solutions research unit.”
Two, with more than 60 countries now backing plans to triple global renewable energy capacity by 2030, we’ll need all the copper we can get our hands on.
Three, Goldman Sachs says the world could see a copper supply deficit of about half a million tons this year.
“The supply cuts reinforce our view that the copper market is entering a period of much clearer tightening, wrote Goldman’s analysts, who see copper prices hitting $10,000 per ton within the year, and much higher in 2025,” as reported by CNBC.
iShares Global Clean Energy ETF (ICLN)
Another way to trade undervalued renewable energy stocks is by buying an undervalued renewable energy ETF. Look at the iShares Global Clean Energy ETF (NASDAQ:ICLN), for example.
After slipping from about $19 to a low of $12.62, it’s starting to show signs of life again. Last trading at $13.76, I’d like to see the ICLN ETF eventually refill its bearish gap around $18.
With an expense ratio of 0.41%, the ETF offers exposure to companies that produce energy from solar, wind, and other renewable sources. Some of its top holdings include First Solar, Enphase Energy(NASDAQ:ENPH), Vestas Wind (OTCMKTS:VWDRY), and SolarEdge.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
