10 Cheap Clean Energy Stocks To Buy According to Hedge Funds

3. Pacific Gas & Electric (NYSE:PCG)   

Number of Hedge Fund Investors: 46  

Forward P/E Ratio as of September 8: 14.79

Pacific Gas & Electric (NYSE:PCG) is a major energy provider serving Northern and Central California, reaching over 16 million people through its subsidiary, Pacific Gas & Electric Company. In 2023, the company achieved 100% clean electricity, derived from a diverse mix of sources: 53% from nuclear power, 34% from renewable resources such as solar and wind, and 13% from large hydroelectric power. Additionally, Pacific Gas & Electric has made substantial investments in battery storage systems, adding more than 2,100 megawatts to its storage capacity.

California is at the forefront of data center capacity in the U.S. and leads in electric vehicle (EV) ownership, boasting over 1.1 million EVs and more than 15,000 charging stations. Pacific Gas & Electric (NYSE:PCG) holds a strong position in California, particularly in Silicon Valley, which benefits from an advanced fiber network and a largely renewable-powered grid. This makes Pacific Gas & Electric a key player for data centers in the region. According to CEO Patti Pope in a Bloomberg interview, the company’s grid is currently operating at only 45% of its capacity. However, with the growth of modern computing, grid utilization is projected to rise to 80% by 2040, potentially doubling power demand during this period.

Pacific Gas & Electric (NYSE:PCG) is strategically positioned to benefit from the rising demand for energy, especially driven by the electric vehicle (EV) and artificial intelligence (AI) sectors. The company’s stock is trading at a forward PE of 14.79, a 15% discount to its sector, and analysts expect the company’s earnings to grow by almost 10% this year. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $21.75, which represents an 8.6% upside potential from its current level. As of the second quarter, the stock is held by 46 hedge funds with stakes worth $2.00 billion. Third Point is the largest shareholder in the company with stocks worth $938.47 million as of June 30.