Below we presented the list of 5 Best Clean Energy Stocks to Buy Now. For our detailed discussion and a more comprehensive list please see 11 Best Clean Energy Stocks to Buy Now.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the best clean energy stocks to buy:
5. Sunrun, Inc. (NASDAQ:RUN)
No of HFs: 29
Total Value of HF Holdings: $3.27 Billion
The top hedge fund holder of this stock is Chase Coleman’s Tiger Global Management which had $2.29 billion invested in the stock at the end of September. An insider recently purchased 59,057 shares at around $16 in October 2019. The stock is up 440% since then. Massif Capital talked about the stock in its Q2 2020 investor letter,
We laid out our thesis on Sunrun (NASDAQ:RUN) in our first-quarter letter to investors and concluded that while the company had dropped 50% in March, we still felt comfortable holding the short position, this was an error. We re-evaluated that posture in May, following a rapid rise in the stock price, and decided to exit the position as the title wave of liquidity entering the markets seemed more than enough to continue to support a firm dependent on capital markets for cash. Given the level of support we see in credit markets right now, our misgivings about their business model do not add up to sufficient catalysts to allow us to hold the position. We encourage readers to revisit our thesis on the company. We would highlight that our decision to re-enter at any point in the future will likely be a function of regulatory rulings on utility net metering practices or compelling evidence to suggest a decline in tax equity investing.
We also closed our short position in Plug Power (NASDAQ:PLUG) this quarter as the market was subsumed with enthusiasm over their recent acquisitions, resulting in an almost 80% rally in the stock over ten trading days. Our decision to exit was painful at the time as we were forced to reconcile with a collective exuberance that was (and is, in our opinion) not grounded reality. In hindsight, it was the correct decision as we avoided most of its recent vertical trajectory. Like SunRun, we have several signposts in front of us for Plug Power that would prompt a re-enter.
The alternative energy landscape is a tricky environment right now. We are enthusiastic about many of the technology and market-driven solutions that are moving society closer to carbon neutrality. A component of our core strategy is deeply rooted in the belief that assets are increasingly mispriced in a rapidly changing energy landscape. We are believers in some young technology companies, wary of stranded asset risks, and understand that many currently out of favor industries will require investment in decarbonization efforts, not divestment.3 Yet, the nascent stage of the energy transition we find ourselves in also invites the creation of businesses that will ultimately prove unsuccessful. Positive sentiment in the collective is necessary to drive complex and challenging societal issues like decarbonization. Still, it can be dangerous at the individual (company) level if it results in the misallocation of resources – purposefully or otherwise.
We are likely to remain patient right now with many of these firms. The attractive trade in alternative energy right now certainly appears to be on the long side. We will continue building into many of our wind investments and are intrigued by developments in the European utility space, and international power developers.
