In this article, we will look at 5 best environmental stocks to invest in. If you want to explore similar stocks, you can also take a look at 12 Best Environmental Stocks to Invest In.
5. Republic Services, Inc. (NYSE:RSG)
Number of Hedge Fund Holders: 34
Republic Services, Inc. (NYSE:RSG) offers environmental services, which include collection and processing of recyclable materials, collection, transfer, and disposal of non-hazardous solid waste, and other environmental solutions in the United States. As of 2022, the company operates 239 transfer stations, 198 active landfill disposal sites, 71 recycling plants, 77 beneficial-use landfill gas projects, and a fleet of 16,000 collection and transfer vehicles. Republic Services, Inc. (NYSE:RSG) is the second-largest provider of waste disposal services in the United States and is one of the best pure-play environmental stocks to invest in.
Analysts are bullish on Republic Services, Inc. (NYSE:RSG). On June 16, Deutsche Bank analyst Kyle White upgraded Republic Services, Inc. (NYSE:RSG) to Buy from Hold and reiterated his price target of $147 on the shares. On June 22, Morgan Stanley analyst Toni Kaplan trimmed his price target on Republic Services, Inc. (NYSE:RSG) to $142 from $152 but maintained a buy-side Overweight rating on the shares.
At the end of Q1 2022, 34 hedge funds held stakes in Republic Services, Inc. (NYSE:RSG) worth $1.28 billion. This is compared to 38 positions a quarter ago with stakes of $1.35 billion.
As of March 31, AQR Capital Management is the leading stakeholder in Republic Services, Inc. (NYSE:RSG) having stakes worth $187.82 million in the company.
4. Sunrun Inc. (NASDAQ:RUN)
Number of Hedge Fund Holders: 37
Sunrun Inc. (NASDAQ:RUN) engages in the design, development, installation, sale, ownership, and maintenance of residential solar energy systems in the United States. Solar stocks like Sunrun Inc. (NASDAQ:RUN) are well positioned to appreciate in value since the Biden administration waived solar panel tariffs this June. Analysts and investors are eyeing solar energy stocks like Sunrun Inc. (NASDAQ:RUN) as they are presenting a compelling entry point.
On June 20, Goldman Sachs analyst Brian Lee trimmed his price target on Sunrun Inc. (NASDAQ:RUN) to $36 from $40 and reiterated a Buy rating on the shares. On June 29, Wells Fargo analyst Michael Blum initiated coverage of Sunrun Inc. (NASDAQ:RUN) with an Equal Weight rating and a $27 price target and noted that he sees Sunrun Inc.’s (NASDAQ:RUN) consumer base to grow by 18% over the next 10 years.
Hedge funds are initiating positions in Sunrun Inc. (NASDAQ:RUN). At the end of Q1 2022, 37 hedge funds held stakes in Sunrun Inc. (NASDAQ:RUN) worth $918.72 million. This is compared to 31 hedge funds in the preceding quarter with stakes of $1.02 billion.
As of March 31, Orbis Investment Management owns over 10.7 million shares of Sunrun Inc. (NASDAQ:RUN) and is the largest shareholder in the company. In Q1 2022, Orbis Investment Management raised its stakes in Sunrun Inc. (NASDAQ:RUN) by 58% and brought them to $325.34 million.
3. Waste Management, Inc. (NYSE:WM)
Number of Hedge Fund Holders: 40
Waste Management, Inc. (NYSE:WM) provides waste management and environmental services to residential, commercial, industrial, and municipal customers in North America. Waste Management, Inc. (NYSE:WM) operates 346 transfer stations, 293 active landfill disposal sites, 146 recycling plants, 111 beneficial-use landfill gas projects, and six independent power production plants. The company is a leader in the waste management industry and operates a fleet of 26,000 collection and transfer vehicles, thus making it a pure-play environmental stock to invest in.
On June 22, Morgan Stanley analyst Toni Kaplan trimmed his price target on Waste Management, Inc. (NYSE:WM) to $160 from $165 but maintained an Equal Weight rating on the shares. Moreover, Waste Management, Inc. (NYSE:WM) was also a top recession stock pick of Wells Fargo analysts.
At the end of Q1 2022, 40 hedge funds were long Waste Management, Inc. (NYSE:WM) with stakes worth $4.13 billion. This is compared to 35 positions in the previous quarter with stakes worth $4.17 billion.
As of Q1 2022, Bill & Melinda Gates Foundation Trust owns more than 18.6 million shares of Waste Management, Inc. (NYSE:WM) and is the largest shareholder in the company. The investment covers 14.94% of Bill & Melinda Gates Foundation Trust’s 13F portfolio.
2. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 46
Ford Motor Company (NYSE:F) is making efforts to establish a dominant presence in the EV space. This March, the company announced that it plans to go all-electric in Europe by 2030. The company is developing and releasing EV models and currently, its most popular battery-electric vehicles are the Ford F-150 Lightning, the Ford Focus Electric, and the Ford Mustang Mach-E.
On June 22, Ford Motor Company (NYSE:F) announced that it has selected its assembly site in Europe and announced that its next-generation electric vehicles will be assembled at its plant in Valencia, Spain. The company plans to sell 600,000 electric vehicles annually in Europe by 2026.
Ford Motor Company (NYSE:F) is a top environmental automobile stock pick to consider for investors looking to make their portfolios ESG-friendly as the company is experiencing strong demand for its vehicles, and more importantly its electric vehicles. On July 5, the company released sales data for the month of June and reported that it delivered 152,262 vehicles in the month, up 31.5% year over year. The company noted the majority of its sales came from the F-Series, Explorer, Expedition, and its battery-electric vehicles. The company also reported that its F-150 Lightning truck was America’s best-selling vehicle in its category in June.
At the end of Q1 2022, 46 hedge funds held stakes in Ford Motor Company (NYSE:F) worth $1.23 billion. Of these, D E Shaw was the most prominent stakeholder in the company with stakes worth $528.36 million.
Here is what Baron Funds had to say about Ford Motor Company (NYSE:F) in its first-quarter 2022 investor letter:
“Ford (NYSE:F) is another example of typical industrial manufacturing business executive mindsets. The April 18, 2022, Bloomberg Businessweek cover story features Ford CEO Jim Farley behind the wheel of an electrified Ford F-150 Lightning. The article is titled, “Hey Elon, THIS is a truck.” I thought the article was terrific. One idea especially stood out to me. Since the F-150 is such a popular vehicle, it “argued for a gradual approach to electrification. Essentially the company retrofitted an existing F-150 with an electric powertrain rather than develop an entirely new truck.” No all-in financial and operation bet by this company on electrification.”
1. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 64
NextEra Energy, Inc. (NYSE:NEE) generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear, coal, and natural gas facilities. On June 14, NextEra Energy, Inc. (NYSE:NEE) announced its goal to go completely green and eliminate carbon emissions from its operations by 2045. Instead of reducing its carbon footprint, the company aims to achieve absolute zero carbon emissions.
On June 13, BMO Capital analyst James Thalacker trimmed his price target on NextEra Energy, Inc. (NYSE:NEE) to $93 from $105 but reiterated a buy-side Outperform rating on the shares.
At the end of Q1 2022, 64 hedge funds held stakes in NextEra Energy, Inc. (NYSE:NEE) worth $2.84 billion. This is compared to 55 positions in Q4 2021 with stakes of $2.61 billion. The hedge fund sentiment for the stock is positive.
As of the first quarter of 2022, Fisher Asset Management is the largest shareholder in NextEra Energy, Inc. (NYSE:NEE) and owns over 15.6 million shares of the company. As of March 31, Ken Fisher’s hedge fund’s stake is valued at $1.32 billion in NextEra Energy, Inc. (NYSE:NEE).
You can also take a look at 10 Top Hedge Funds Focusing on ESG and Impact Investing and 10 Cheap ESG Stocks To Invest In.
