In this article, we discuss the 5 best green stocks to invest in. If you want to read our detailed analysis of the green energy industry, go directly to see 10 Best Green Stocks To Invest In.
5. Sunrun Inc. (NASDAQ:RUN)
Number of Hedge Fund Holders: 45
According to a report published by the Solar Futures Study, solar energy is going to play a major role in decarbonizing the American power grid and has the potential to power over 40% of the nation’s electricity by 2035.
Sunrun Inc. (NASDAQ:RUN) is an American solar company that provides solar panels and home batteries in residential areas.
As of Q2, 45 hedge funds tracked by Insider Monkey were bullish on Sunrun Inc. (NASDAQ:RUN), up from 41 in the previous quarter. The total value of these stakes is over $2.5 billion.
Horizon Kinetics mentioned Sunrun Inc. (NASDAQ:RUN) in its Q2 2021 investor letter. Here is what the firm has to say:
“What this table did not cover is valuation. What’s expensive, what’s cheap? A good business that is too expensive is not a good investment. The most expensive business in the table is Sunrun. Sunrun is the nation’s largest residential rooftop solar panel system seller/installer. Sunrun’s valuation might also shed Thumbnail valuation.
To start at the top of the income statement, Sunrun shares trade at 10.3x revenues. The most profitable company in the S&P 500, Microsoft, trades at 13x revenues. Sunrun operates at a loss. Obviously, not only is tremendous growth anticipated, but tremendous profitability, too.
Let’s simply accept that investors have correctly anticipated Sunrun’s future success and make that the starting point for a valuation exercise…” (Click here to see the full text)
4. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 55
Ford Motor Company (NYSE:F), an American automobile manufacturer, aims to achieve carbon neutrality by 2050, in line with Paris Climate Agreement. The company has invested over $11.5 billion in electric vehicles through 2022, making it one of the best green stocks to invest in.
In Q2, Ford Motor Company (NYSE:F) presented a positive hedge fund sentiment, as 55 hedge funds in the Insider Monkey database were bullish on the company, up from 49 in the previous quarter. The total value of these stakes is over $2.1 billion. D E Shaw is the leading shareholder of Ford Motor Company (NYSE:F) in Q2, with over 45.3 million shares.
Recently, JPMorgan lifted its price target on Ford Motor Company (NYSE:F) to $20, while keeping an Overweight rating on the shares.
Greenlight Capital Fund mentioned Ford Motor Company (NYSE:F) in its Q1 2021 investor letter. Here is what the firm has to say:
“General Motors (GM) was a disappointment. The damage from last year’s strike consumed most of the cash flow GM would have otherwise generated in 2019. We had expected a strong bounce back in earnings and cash flow in 2020, but the annual guidance, while meeting Wall Street expectations, was worse than we expected. Further, the cash burned during the strike needed to be re-earned in order to protect GM’s investment grade rating. Pre-crisis, there would have been, at best, a minimal share repurchase late in the year. At the analyst day, our hopes that 2020 would finally be the year were dashed. We sold our stock. Over our five-year holding period, we made a 9.6% IRR on GM. In the difficult environment, its most comparable peer, Ford, lost about half its value.”
3. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 59
NextEra Energy, Inc. (NYSE:NEE) ranks third on our list of the best green stocks to buy now. On October 20, the company announced its Q3 results, posting an EPS of $0.75, beating the estimates by $0.04. NextEra Energy, Inc. (NYSE:NEE) is an American energy company that is considered as one of the largest producers of renewable energy, mainly wind and solar.
On October 15, NextEra Energy, Inc. (NYSE:NEE) declared a quarterly dividend of $0.385 per share, yielding 1.89%. The company has a track record of 11 years of consistent dividend growth. This July, Credit Suisse initiated its coverage on NextEra Energy, Inc. (NYSE:NEE) with an Outperform rating and an $85 price target. The stock gained 13.5% in 2021.
At the end of Q2, 59 hedge funds tracked by Insider Monkey reported having stakes in NextEra Energy, Inc. (NYSE:NEE), down from 63 in the previous quarter. The total value of these stakes is over $2.6 billion.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA), a leading American manufacturer of EVs, has always been a very committed supporter of green energy as the company’s batteries utilize stored and consumed solar energy. Moreover, the company also sells solar panels through Tesla Energy.
Of the 873 elite funds tracked by Insider Monkey, 60 hedge funds had stakes in Tesla, Inc. (NASDAQ:TSLA) at the end of Q2, compared with 62 in the previous quarter. The total value of these stakes is over $9.2 billion. Cathie Wood’s ARK Investment Management was one of the leading shareholders of Tesla, Inc. (NASDAQ:TSLA) in Q2, owning shares worth $3.6 billion
Worm Capital LLC mentioned Tesla, Inc. (NASDAQ:TSLA) in its Q3 2021 investor letter. Here is what the firm has to say:
“Our core portfolio as of this writing—TSLA, SPOT, SHOP, ABNB, and AMZN—are all premier examples of companies that use the concept of aggregation of marginal gains to continuously improve their value proposition for customers. After all, what is innovation if not just a continuous search for fractional advantages in business?
The way we see it, Tesla is perhaps the generational example of the marginal gain aggregation theory. It’s also been our largest position for several years now. There are many ways to characterize and value this business (see previous letters for longform write-ups), but perhaps the best way to think about the company is that it is a highly vertically-integrated software and hardware firm that’s devoted entirely to aggregating marginal gains across its organization. The goal? Lower costs, improve thruputs, and dramatically enhance the value proposition—at scale—for consumers…”
1. General Electric Company (NYSE:GE)
Number of Hedge Fund Holders: 67
General Electric Company (NYSE:GE) tops our list of the best green stocks to invest in. Recently, the company has signed an agreement with GE Renewable Energy to improve the supplies of metals used for manufacturing EVs and renewable energy equipment.
As of Q2, 67 hedge funds tracked by Insider Monkey reported having stakes in General Electric Company (NYSE:GE), compared with 68 in the previous quarter. The total worth of these stakes is over $6.08 billion.
On September 10, General Electric Company (NYSE:GE) declared a quarterly dividend of $0.08 per share, yielding 0.31%. In Q2, the company reported a 33% growth in its total orders, worth $18.3 billion.
Vulcan Value Partners mentioned General Electric Company (NYSE:GE) in its Q1 2021 investor letter. Here is what the firm has to say:
“General Electric is outperforming our expectations for 2021 as the economic recovery is occurring faster than expected. We are particularly pleased with its free cash flow generation. We are happy to own it in our portfolio.”
You can also take a look at 10 Best Solar Energy Stocks To Buy Now and 11 Best Clean Energy Stocks To Buy.
