In this article, we will take a look at the 5 best renewable energy stocks to buy now. To see more such companies, go directly to 12 Best Renewable Energy Stocks to Buy Now.
5. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 44
Insider Monkey’s proprietary database of 943 hedge funds and their holdings shows that 43 hedge funds had stakes in First Solar, Inc. (NASDAQ:FSLR) as of the end of the last quarter of 2022. The total worth of these stakes was over $699 million. The biggest stakeholder of First Solar, Inc. (NASDAQ:FSLR) was Todd J. Kantor’s Encompass Capital Advisors which owns a $65 million stake in the company.
First Solar, Inc. (NASDAQ:FSLR) jumped earlier this month after UBS upgraded the stock to Buy from Neutral with a $250 price target. The new price target was a major increase from the firm’s previous price target of $140. UBS believes First Solar, Inc. (NASDAQ:FSLR) is “the most significant beneficiary” of the Inflation Reduction Act.
UBS said that First Solar, Inc. (NASDAQ:FSLR) is positioned well to take advantage of the high demand for its domestic capacity.
4. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 51
Baltimore, Maryland-based Constellation Energy Corporation (NASDAQ:CEG) is operating major renewable energy resources in the country. Constellation Energy Corporation (NASDAQ:CEG) says it’s the largest producer of carbon-free energy in the country. Earlier this month, Constellation Energy Corporation (NASDAQ:CEG) announced that it has started hydrogen production at its Nine Mile Point Nuclear Plant in Oswego, New York.
As of the end of the last quarter of 2022, 51 elite hedge funds tracked by Insider Monkey reported owning stakes in Constellation Energy Corporation (NASDAQ:CEG). The net worth of these stakes was $2.4 billion.
Alger Capital made the following comment about Constellation Energy Corporation (NASDAQ:CEG) in its Q3 2022 investor letter:
“Constellation Energy Corporation (NASDAQ:CEG) is America’s leading clean energy company, based on carbon-free production. The company is the largest supplier of clean energy and sustainable solutions to homes, businesses, governments, community aggregations, and a range of wholesale customers (such as municipalities, cooperatives, and other end markets) across the continental U.S., backed by approximately 32,400 megawatts of generating capacity consisting of nuclear, wind, solar, natural gas and hydroelectric assets. Constellation produces nearly 10% of the nation’s carbon-free energy.
Shares outperformed during the third quarter primarily due to the Inflation Reduction Act (IRA). Signed into law in august, the bill provides a nuclear production tax credit of approximately $43.75 per megawatt hour of energy generated. This credit favorably impacted earnings, resulting in an increase in Constellation’s share price.”
3. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 61
NextEra Energy, Inc. (NYSE:NEE) is one of the most popular renewable energy stocks among elite hedge funds. As of the end of the fourth quarter of 2022, 30 hedge funds tracked by Insider Monkey reported owning stakes in NextEra Energy, Inc. (NYSE:NEE), up from 21 hedge funds in the previous quarter. The total value of these stakes was over $251 million. The biggest hedge fund stakeholder of NextEra Energy, Inc. (NYSE:NEE) during this period was Phill Gross and Robert Atchinson’s Adage Capital Management which owns a $169 million stake in the company.
In February, NextEra Energy, Inc. (NYSE:NEE) rolled out a 10% increase in its quarterly dividend when it announced a per-share dividend of $0.4675. The dividend is payable on March 15 for shareholders of record as of February 28.
2. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 63
Enphase Energy, Inc. (NASDAQ:ENPH) is one of the most versatile renewable energy companies, making several solutions in the industry, including solar micro-inverters, battery energy storage, and EV charging stations for homes.
In late February, Enphase Energy, Inc. (NASDAQ:ENPH) shares jumped after Janney Montgomery analyst Sean Milligan upgraded the stock to Buy from Neutral with a $282 price target. The analyst said that Enphase Energy, Inc. (NASDAQ:ENPH)’s valuation looks attractive following a 40% drop from a recent peak.
At the end of the fourth quarter of 2022, 63 hedge funds reported having stakes in Enphase Energy, Inc. (NASDAQ:ENPH). The total value of these stakes was about $2.2 billion.
ClearBridge Investments made the following comment about Enphase Energy, Inc. (NASDAQ:ENPH) in its Q3 2022 investor letter:
“In IT, Enphase Energy, Inc. (NASDAQ:ENPH) delivered a strong quarter driven by secular growth in global rooftop solar, increased penetration into Europe, where demand accelerated, and a continued ramp up in battery storage sales. Also with a strong presence in the U.S., Enphase Energy designs and manufactures microinverters for residential and small commercial solar PV systems and has made strides in evolving from a solar inverter maker into a “home energy management” company that can act as the brains for the home’s energy system, including microinverters for solar, as well as storage and energy management software.”
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 91
Tesla, Inc. (NASDAQ:TSLA) makes it to our list of the best renewable energy stocks because the company’s electric vehicles are playing key role in deploying the renewable energy sources in the auto industry in addition to its Powerwall and solar roofs products for homes.
Recently, Jefferies upped its price target for Tesla, Inc. (NASDAQ:TSLA) to $230 from $180 and kept a Buy rating on the shares. Jefferies was encouraged by Tesla, Inc. (NASDAQ:TSLA)’s latest investor day. It said that the lack of new product announcements does not show major growth delays. Jefferies also upped its 2023 and 2024 operating earnings estimates for Tesla, Inc. (NASDAQ:TSLA) by 10% and 8%, respectively.
Tesla, Inc. (NASDAQ:TSLA) is also one of the most popular stocks among the elite hedge funds tracked by Insider Monkey. A total of 91 hedge funds tracked by Insider Monkey were bullish on Tesla, Inc. (NASDAQ:TSLA) at the end of the fourth quarter of 2022.
ClearBridge Large Cap Growth Strategy made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2022 investor letter:
“Tesla, Inc. (NASDAQ:TSLA), meanwhile, also fits squarely within our earnings reset group. We took advantage of its enterprise multiple falling back to historic lows to initiate a starter position in the leading manufacturer of electric vehicles (EV) and developer of battery technologies. Tesla has a significant structural cost advantage in battery production, EV manufacturing and EV selling, which gives it industry-leading operating margins in EVs. As the auto cycle has softened, the stock has sold off substantially with the rest of the automakers, despite EVs continuing to have a secular growth advantage. Tesla has a clean balance sheet with negative net debt and enormous revenue growth, EBITDA growth and free cash flow generation. Its margin buffer also gives the company the ability to cut prices while still protecting earnings better than competitors, which should help support continued volume growth. There is also significant upside optionality driven by its software offerings, which we do not believe is currently priced into the stock.
That being said, Tesla is highly indexed to a flagging auto market and we expect its earnings outlook to worsen in the near term. We are also monitoring increasing EV competition and the recently emerging risks to the brand and management integrity raised by CEO Elon Musk’s actions at Twitter to determine future position size in the portfolio.”
You can also take a peek at 15 Best Short-Term Stocks to Buy and 10 Best Stocks to Buy for High Returns.
