In this article, we discuss the 10 best green stocks to invest in. You can skip our detailed analysis of the green energy industry, and go directly to read 5 Best Green Stocks To Invest In.
Green energy stocks have been on investors’ radar for quite some time now. Almost all sectors today have released their sustainability reports, aiming to achieve carbon neutrality in the near future. The Covid-19 concerns in 2020 didn’t disrupt green energy investments. According to a report published by Bloomberg New Energy Finance (BNEF), 2020 saw a $505 billion investment in energy sectors, such as renewable energy and electric vehicles, presenting a 9% growth from the previous year.
Green energy stocks generated stable returns in 2020. WilderHill New Energy Global Innovation Index (NEX) gained 142% in the past year. The trend followed in 2021 as well, as assets in environment-focused funds stood at $2 trillion globally, tripling in three years, as reported by Wall Street Journal.
The automotive industry is contributing heavily to the clean energy initiatives, by shifting the focus to electric vehicles (EVs). According to a report published by Reuters, Europe has set a target to develop 30 million electric cars by 2030, to banish all fossil fuel-based transport.
Some of the notable green stocks include General Electric Company (NYSE:GE), Tesla, Inc. (NASDAQ:TSLA), NextEra Energy, Inc. (NYSE:NEE), and Ford Motor Company (NYSE:F).
Our Methodology
Let’s analyze our list of the best green stocks to invest in. The companies mentioned below include those that utilize renewable energy means for their operations.
We chose these companies based on their popularity among the 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Best Green Stocks To Invest In
10. Brookfield Renewable Partners L.P. (NYSE:BEP)
Number of Hedge Fund Holders: 20
Brookfield Renewable Partners L.P. (NYSE:BEP) is a limited partnership that owns renewable power assets and is also one of the largest investors in renewable power, with a generating capacity of over 2,000 megawatts.
At the end of Q2, 20 hedge funds tracked by Insider Monkey reported owning stakes in Brookfield Renewable Partners L.P. (NYSE:BEP), compared with 24 in the previous quarter. The total value of these stakes is $232.6 million.
This September, Raymond James upgraded Brookfield Renewable Partners L.P. (NYSE:BEP) to Outperform, with a $44 price target.
Like General Electric Company (NYSE:GE), Tesla, Inc. (NASDAQ:TSLA), NextEra Energy, Inc. (NYSE:NEE), and Ford Motor Company (NYSE:F), Brookfield Renewable Partners L.P. (NYSE:BEP) is also one of the notable stocks to invest in.
ClearBridge Investments mentioned Brookfield Renewable Partners L.P. (NYSE:BEP) in its Q1 2021 investor letter. Here is what the firm has to say:
“U.S. renewables utility Brookfield Renewable was another detractor. Brookfield Renewable is a pure-play renewables operator and developer headquartered in Canada and domiciled in the U.S., focused on international hydro, solar, wind and storage technology. As more private and public institutions announce ambitious carbon reduction initiatives, Brookfield Renewable’s globally diversified, multi-technology renewables business makes it an attractive partner. Its development pipeline stands at 18,000 megawatts, providing confidence the company can meet its targeted double-digit cash flow growth through to 2025. Shares moderated amid expectations of rising bond yields, and a cool-off on the green trade.”
9. SunPower Corporation (NASDAQ:SPWR)
Number of Hedge Fund Holders: 25
Recently, the Chinese President announced to increase the development of large-scale solar and wind projects, which resulted in the gains of solar power companies. SunPower Corporation (NASDAQ:SPWR), a solar power generation company, gained 60% over the last 12 months amid these growth catalysts.
At the end of Q2, 25 hedge funds in the Insider Monkey database reported having stakes in SunPower Corporation (NASDAQ:SPWR), valued at $231.7 million. In the previous quarter, 18 hedge funds had stakes in the company, presenting a positive hedge fund sentiment.
8. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 31
First Solar, Inc. (NASDAQ:FSLR) is an American solar company that manufactures solar panels and provides utility-scale PV power plants. In Q2, the company presented a positive hedge fund sentiment, as 31 hedge funds tracked by Insider Monkey reported owning stakes in First Solar, Inc. (NASDAQ:FSLR), up from 24 in the previous quarter. The total value of these stakes is over $317 million.
White Brook Capital mentioned First Solar, Inc. (NASDAQ:FSLR) in its Q1 2021 investor letter. Here is what the firm has to say:
“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.”
7. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 34
Plug Power Inc. (NASDAQ:PLUG) ranks seventh on our list of the best green stocks to invest in. The company develops hydrogen fuel cell systems that replace traditional batteries. In the past year, Plug Power Inc. (NASDAQ:PLUG) delivered a 67% return to shareholders.
At the end of Q2, Plug Power Inc. (NASDAQ:PLUG) presented a positive hedge fund sentiment, as 34 hedge funds tracked by Insider Monkey reported owning stakes in the company, up from 25 in the previous quarter. The total value of these stakes is $848.7 million.
6. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 34
NIO Inc. (NYSE:NIO), a Chinese automobile manufacturer, recently launched Nio power, which provides a charging experience with battery swap stations through its extensive power network.
At the end of Q2, the number of hedge funds tracked by Insider Monkey having stakes in NIO Inc. (NYSE:NIO) increased to 34, from 28 in the previous quarter. The total value of these stakes is over $2.06 billion. Aubrey Capital Management is the leading shareholder of NIO Inc. (NYSE:NIO) in Q2, with shares worth $26.2 billion.
In October Goldman Sachs upgraded NIO Inc. (NYSE:NIO) to Buy, with a $65 price target.
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Disclosure. None. 10 Best Green Stocks To Invest In is originally published on Insider Monkey.
