In this article, we discuss the 10 best renewable energy stocks to buy according to hedge funds based on the data of over 800 hedge funds tracked by Insider Monkey. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Renewable Energy Stocks to Buy According to Hedge Funds.
Perhaps climate change activists are the ones to be credited the most for the globe’s attention being focused on the adverse impact of non-renewable energy sources like coal and oil being used and exhausted. Burning coal and drilling oil will always be two human practices that will be profitable in the short term but disastrous in the long run. But the environment notwithstanding, growing and unchecked reliance on non-renewable energy sources is and always will be a horrible mistake for the global community to make. For instance, according to the US Energy Information Administration, in 2018 alone, coal mining led to increased methane emissions, which accounted for roughly 11% of the total methane emissions in the US that year, alongside emissions from abandoned coal mines. These emissions collectively contribute to global warming by adding to the temperatures in the atmosphere. Hence, we are able to observe a shift towards renewable energy sources like wind and solar energy, to make up for the rapidly depleting and ever-harmful non-renewable energy sources.
Perhaps one of the biggest shifts towards renewable energy the world has seen as of yet is the emergence of electric vehicles (EVs), manufactured by companies like Tesla, Inc. (NASDAQ: TSLA), Workhorse Group Inc. (NASDAQ: WKHS), and Arcimoto, Inc. (NASDAQ: FUV). With the emergence of never before seen products like the Model S Plaid manufactured by Tesla, Inc. (NASDAQ: TSLA), the global community is slowly but surely being pulled into the EV trend. As a result of this, the reliance on non-renewable and environmentally unfriendly car fuel is being lessened, with a heavier reliance being placed on environmentally-friendly electric cars like Arcimoto, Inc.’s (NASDAQ: FUV) Deliverator, which has even begun to replace your average delivery man's typical vehicle. As of right now, the future seems to be one filled with EVs and other renewable energy products taking over in large numbers, with traditional energy sources going largely out of business. For instance, by 2030 the number of EVs on the streets is expected to hit an eye-popping 145 million, according to the International Energy Agency. They also mentioned that just last year, roughly three million new electric cars were registered.
According to a Deloitte report on 2021 renewable energy outlook, 2020 saw US states and businesses moving towards renewable energy plans despite the economic recession caused by the emergence of the coronavirus pandemic. The demand for renewable energy was seen to increase in 2020. In December 2020, the renewables' shares grew more than shares of coal generation for 153 days consecutively. Reliance on renewable energy sources was further consolidated through examples like New York State, which announced a renewable energy solicitation last year. 60% of this solicitation was said to be made up of offshore wind alone. New York State also committed $400 million for the development of port infrastructure, showcasing support for off-shore wind ports.
The above is testament to the fact that apart from the popularity of EVs in recent years, and the growing market value and importance of companies like Tesla, Inc. (NASDAQ: TSLA), Workhorse Group Inc. (NASDAQ: WKHS), and Arcimoto, Inc. (NASDAQ: FUV) that produce environmentally friendly EVs, other renewable energy industry developments are also underway. Wind and solar have and always will be excellent renewable energy sources, and the fact that both of them exist without any risks of them running out, only adds to their relevance. But to gain more insight into how the renewable energy industry is impacting the financial world, it’s better to take a look at some of the most popular renewable energy stocks among hedge funds as of the first quarter of 2021.
10 Best Renewable Energy Stocks to Buy According to Hedge Funds
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The stocks added to our list below were selected on the basis of the number of hedge funds holding stakes in them. For that we analyze the data of 866 hedge funds tracked by our system. For each stock we mentioned the number of hedge funds having stakes in it.
Best Renewable Energy Stocks to Buy According to Hedge Funds
NextEra Energy Partners, LP (NYSE: NEP) is a renewable utility company working on clean energy projects in the US. The company’s portfolio consists of contracted renewable generation assets including solar and wind projects, among others. With headquarters in Florida, NextEra Energy Partners, LP (NYSE: NEP) was incorporated in 2014 and ranks 10th on our list of the best renewable energy stocks to buy according to hedge funds.
At the end of the first quarter, there were 63 hedge funds with stakes in NextEra Energy Inc. (NYSE: NEE), whose subsidiary is NextEra Energy Partners, LP (NYSE: NEP). The total value of their stakes was roughly $2.72 billion. This is compared to 61 hedge funds with stakes in the stock worth $3.07 billion in Q4 2020. Like Tesla, Inc. (NASDAQ: TSLA), Workhorse Group Inc. (NASDAQ: WKHS) and Arcimoto, Inc. (NASDAQ: FUV), NextEra Energy Partners, LP’s (NYSE: NEP) is a good stock to invest in.
Xcel Energy, Inc. (NASDAQ: XEL) is an electric services company based in Minneapolis, Minnesota, and founded in 1999. The company generates electricity through a range of sources including various renewable energy sources like hydroelectric, solar, biomass, and wind. It also develops and leases natural gas pipelines and storage and compression facilities. Xcel Energy, Inc. (NASDAQ: XEL) ranks 9th on our list of the best renewable energy stocks according to hedge funds.
This May, the company decided to buy natural gas for its Colorado consumer base. The newly purchased gas was produced with tight controls over the emission of greenhouse gases, making its use highly environmentally friendly. Xcel Energy, Inc. (NASDAQ: XEL) announced a $0.46 per share quarterly dividend this May, which will be payable on July 20th. The stock gained 6.92% in the past 6 months and 5.91% year to date. In its first quarter 2021 report, Xcel Energy, Inc. (NASDAQ: XEL) also announced $3.54 billion and $364 million in revenue and earnings respectively. The company also beat EPS estimates for the first quarter by $0.06 at $0.67.
There are 18 hedge funds with stakes in Xcel Energy, Inc. (NASDAQ: XEL) worth $200 million as of the first quarter of this year, down from 28 hedge funds with stakes worth $289 million in Q420.
Renewable Energy Group, Inc. (NASDAQ: REGI) is a company providing lower-carbon transportation fuels both in the US and internationally. Renewable Energy Group, Inc. (NASDAQ: REGI) also produces advanced biofuels by converting natural fats, oils, and greases. The biomass-based diesel the company produces is made from low carbon feedstocks like used cooking oil. Renewable Energy Group, Inc. (NASDAQ: REGI) with its strong foundation in renewable energy production ranks 8th on our list of the best renewable energy stocks to buy according to hedge funds.
The company received a “Buy” rating with a $90 price target from Citi on June 9th, prompting gains for the stock, which gained 4.2% following the announcement, and 3.05% in the past 6 months. Renewable Energy Group, Inc. (NASDAQ: REGI) also released its first-quarter report, according to which the company had $539.74 million in revenue and $39.22 million in earnings for that quarter.
As of the end of the first quarter of 2021 21 hedge funds held stakes in the stock worth $163 million, up from 16 hedge funds holding stakes in the company worth $66 million in Q420. Like Tesla, Inc. (NASDAQ: TSLA), Workhorse Group Inc. (NASDAQ: WKHS) and Arcimoto, Inc. (NASDAQ: FUV), Renewable Energy Group, Inc. (NASDAQ: REGI) is a good stock to invest in.
This company is immersed in the renewable energy industry in the US and has a portfolio of district energy systems. Clearway Energy, Inc.’s (NYSE: CWEN) thermal infrastructure assets provide steam and hot or cold water, alongside electricity, to businesses, colleges, hospitals, and others. The company ranks 7th on our list of the best renewable energy stocks to buy according to hedge funds.
This May, Clearway Energy, Inc. (NYSE: CWEN) announced a $0.33 per share quarterly dividend. This announcement markets a 1.5% increase in the company’s dividend previously, which was $0.32. The new dividend will be payable on June 15th. The company also completed its acquisition of Mt. Storm Wind Project two months ago.
Clearway Energy, Inc. (NYSE: CWEN) announced its first quarter 2021 report which showed a $237 million revenue, which dropped 8.1% year over year. In the first quarter, the company's GAAP EPS came in at $0.03, beating the Street estimates by $0.34. Clearway Energy, Inc. (NYSE: CWEN) gained 27.8% in the past year.
As of the end of the first quarter of 2021, 24 hedge funds had stakes in Clearway Energy, Inc. (NYSE: CWEN), worth $232 million. The number of hedge funds holding a stake in the company has risen as compared to Q420 when the number stood at 24.
First Solar, Inc. (NASDAQ: FSLR) is a renewable energy producer focusing on solar power and providing photovoltaic solar energy solutions in a range of countries across the globe including the US, Japan, France, and Canada, among others. This company ranks 6th on our list of the best renewable energy stocks to buy according to hedge funds.
According to the company’s first quarter of 2021 report, First Solar, Inc. (NASDAQ: FSLR) beat EPS estimates by $0.78 with its $1.96 worth of EPS.
First Solar, Inc. (NASDAQ: FSLR) has gained 58.83% in the past year, and currently, 24 hedge funds hold stakes in the stock worth $304 million, although this is a fall from Q420 reported numbers of 34 hedge fund holders with stakes worth $406 million in the company.
White Brook Capital, in their Q1 2021 investor letter, mentioned First Solar, Inc. (NASDAQ: FSLR) and Itron, Inc. (NASDAQ: ITRI). Here is what White Brook Capital has to say about First Solar, Inc. and Itron, Inc. in its letter:
"First Solar (FSLR) and Itron (ITRI), both of which I’ve written about in past In Focus sections were long-term positions that were sold as their prices exceeded price targets. Both are solid companies that remain on my watchlist, but the opportunity cost of not investing in other potential investments exceeded their potential mid-term returns.”
