10 Best Robinhood Stocks Under $20

4. The AES Corporation (NYSE:AES)

Number of Hedge Fund Holders: 45

Share Price as of June 12: $19.66

The AES Corporation (NYSE:AES) is a Virginia-based diversified power generation and utility company that provides its services through its subsidiaries, including Indianapolis Power and Light Company, AES Solutions Management, LLC, AES Laurel Mountain, and more. Hedge fund sentiment was positive toward The AES Corporation (NYSE:AES) in the first quarter as hedge funds with investments in the stock were 45 in the quarter, with positions worth $1.25 billion. This is compared to 35 funds with positions worth $913.071 million in the preceding quarter. Orbis Investment Management is the top investor in the company as of March 31 and holds a position worth $415.3 million.

The biggest growth catalyst for The AES Corporation (NYSE:AES) is its integration into AI. AES’s strategic positioning as a major energy provider to technology companies and data centers is noteworthy. With nearly 6 GW of long-term contracts directly with tech giants like Google, Microsoft, and Amazon, and an additional 500 MW with utilities for data center customers, AES is crucial in supporting the tech sector’s renewable energy commitments.

According to Goldman Sachs, the power demand in the US will rise at a compound annual growth rate of 2.4% between 2022  and 2030 and 0.9% of it will be accounted for by data centers, The AES Corporation (NYSE:AES) is well-positioned to meet this demand with its extensive renewable energy projects, particularly wind and solar, coupled with energy storage solutions. The company is expected to add 3.6 GW of new capacity in 2024, with 92% of the necessary major equipment on site. Including a 15-year contract with Amazon to add 1 GW of solar and storage, The AES Corporation’s (NYSE:AES) backlog of projects is now 12.7 GW.

According to analysts’ estimates, The AES Corporation (NYSE:AES) is expected to improve its profit margins in 2024 as its non-GAAP EPS is expected to grow from $1.76 per share in 2023 to $1.92 in 2024. AES is currently trading at 10 times its forward earnings. Considering the 16x peer average and also the fact that its earnings will grow by about 9% this year, AES is cheap at current levels.

On March 31, Argus raised the price target on The AES Corporation (NYSE:AES) to $28 from $25 and kept a buy rating.