Three energy stocks to invest in now
A professional investor tells us where she’d put her money. This week: Gabriela Herculano, iClima Smart Energy ETF, picks three fast-growing energy stocks
In response to the war in Ukraine, many people have pointed out that Europe must restart using coal-fired power plants and buy more liquified natural gas (LNG) from shale gas sources in the US to replace fossil fuels supplied by Russia. In our view, this narrative is misleading. Doing so would mean climate change mitigation is no longer a priority.
Coal, crude and natural gas did not become any more investible, cleaner, cheaper or less volatile since the invasion of Ukraine. Security of supply is a top priority for all countries – the EU in particular due to its reliance on Russia – and the need to accelerate the transition to clean energy remains undeniable.
Our global power industry was built around large, centralised power stations, mostly powered by coal and natural gas. But all of that is changing. The two key short-term solutions are in the hands of consumers: to embrace energy efficiency and, whenever possible, to produce electricity at the point of consumption.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Until recently, generating electricity “behind the meter” – ie, on the user’s site – has been challenging for technical and economic reasons. But substantial declines in the cost of solar panels and batteries have made these solutions price-competitive.
The companies in our portfolio help the world to decarbonise. They are also digital, decentralised, and deflationary. Renewable energy generation is a greener, more cost-efficient alternative to an ageing and increasingly obsolete centralised electric power system.
A solar future
Meyer Burger Technology (Zurich: MBTN) is a European producer of higher-end solar rooftop panels. The European Commission is aiming to install 15 terawatt-hours’ (TWh) worth of solar rooftops by the end of 2022, which would require seven gigawatts (GWs) of behind-the-meter solar panels to be added to the system. Almost 26GW of solar was added to the grids across the 27 EU member states in 2021, bringing the total installed capacity to nearly 165GW. (Current capacity predominantly consists of utility-scale installations.)
Smarter storage
Stem (NYSE: STEM) is a US-based smart energy storage and energy management software company, which combines hardware, software and artificial intelligence to create storage solutions that maximise renewable energy generation to build a cleaner grid. The company had a market capitalisation of $1.69bn at the end of last month. The clean energy storage market in the US alone is likely to grow over 120 times by 2035, and Stem is very well positioned to profit from this opportunity.
Improving efficiency
Ameresco (NYSE: AMRC) provides energy efficiency solutions, which is irrefutably one of the few short-term answers to the current energy crisis. It operates in the US, Canada and Europe and revenues for its 2021 financial year reached $1.2bn. The company has reiterated guidance for what it expects to be another year of strong growth. Revenues for 2021 are forecast to come in at between $1.83bn and $1.87bn, and adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) between $200m and $210m. Energy conservation to generate cost-savings is a top priority worldwide, and Ameresco is a key player in the sector.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Christmas at Chatsworth: review of The Cavendish Hotel at Baslow
MoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
By Dr Matthew Partridge Published
-
Tycoon Truong My Lan on death row over world’s biggest bank fraud
Property tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
By Jane Lewis Published
-
Why undersea cables are under threat – and how to protect them
Undersea cables power the internet and are vital to modern economies. They are now vulnerable
By Simon Wilson Published
-
Share buybacks rise in the UK – what effect will it have?
Share buybacks are gaining popularity in the UK – good news for investors
By Rupert Hargreaves Published
-
Is now the time to buy Marshalls?
Former market darling Marshalls, a landscaping and building products supplier, looks too cheap. Is it time to buy this once-admired stock?
By Jamie Ward Published
-
Top UK stocks with healthy cash flows and dividend yields
Three promising UK stocks according to Alan Dobbie, co-manager, Rathbone Income Fund
By Alan Dobbie Published
-
Warren Buffet invests in Domino’s – should you buy?
What makes Domino's a compelling investment for Warren Buffet's Berkshire Hathaway, and should you buy the UK-listed takeaway pizza chain?
By Dr Matthew Partridge Published
-
4Imprint makes a strong impression – should you buy?
4Imprint, a specialist in marketing promotional products, is the leader in a fragmented field
By Dr Mike Tubbs Published
-
Invest in Glencore: a cheap play on global growth
Glencore looks historically cheap, yet the group’s prospects remain encouraging
By Rupert Hargreaves Published
-
How to save the dying UK stock market
The UK stock market is in long-term decline. To fix that, we must first recognise why equity markets exist and who they should serve
By Bruce Packard Published