We recently compiled a list of the 10 Best Renewable Energy Penny Stocks to Invest In. In this article, we are going to take a look at where TPI Composites, Inc. (NASDAQ:TPIC) stands against the other renewable energy penny stocks.
On November 11, the Financial Times reported that the U.S. clean energy industry faces a significant setback following Donald Trump’s election victory. The article highlights that several developers have halted projects, and investors are selling shares due to uncertainties about policy direction and federal funding under the incoming Trump administration. According to Mike Carr, president of Solar Energy Manufacturers for America, approximately half a dozen clean energy projects are awaiting policy certainty before proceeding.
Trump’s election, combined with the prospect of a Republican-controlled Congress, has led to a sharp decline in renewable energy stocks. The iShares Global Clean Energy ETF dropped 7% after the election. Additionally, short sellers of renewable energy stocks reportedly profited over $1 billion in the aftermath.
Despite the turbulence, some industry leaders and analysts remain cautiously optimistic, suggesting that the economic case for renewable projects could persist under a Trump administration. They also believe that existing tax credits for power generation and manufacturing may remain intact. However, they warn that sectors such as offshore wind and electric vehicles may face significant challenges. Trump has pledged to repeal the Inflation Reduction Act, a major driver of U.S. clean energy investment, and vowed to expand oil and gas production while halting offshore wind projects and EV mandates.
Biden’s target to reduce emissions by 50-52% from 2005 levels by 2030 is at risk under a second Trump term. Such a shift could result in an additional 500 million tonnes of carbon emissions in the energy sector by the end of the decade.
US Renewable Energy Sector Continues to Grow, Despite Challenges
While uncertainties loom over the renewable energy sector, the industry continues to demonstrate resilience. According to a report by Rhodium Group, a New York-based research institute, the renewable energy and transportation investment in the United States has continued to break records, reaching a new high of $71 billion in the third quarter of 2024. This marks a 12% increase from the same period in 2023 and a nearly unbroken quarter-on-quarter growth trend over the past three years.
The report highlights that renewable investment accounted for 5% of total US private investment in structures, equipment, and durable consumer goods, up from 4.5% in the third quarter of 2023. Retail investment was a major driver of this growth, increasing by 9% relative to the previous quarter, largely due to a surge in zero-emission vehicle (ZEV) sales. However, investment in renewable technology manufacturing remained flat quarter-on-quarter, while investment in deploying technology to decarbonize energy and industrial production slipped 7% quarter-on-quarter.
The report also assessed the progress of the US renewable electricity transition and found that the current pace of capacity expansion is falling short of what is needed to deliver a 40% reduction in net GHG emissions below 2005 levels by 2030. The analysis of projects in the pipeline suggests that both solar and wind are underperforming, aligning more closely with a scenario that would yield only a 30% reduction by 2030.
Despite the challenges and uncertainties facing the renewable energy sector, the industry’s resilience and potential for growth remain evident. With that in context, let’s take a look at the 10 best renewable energy penny stocks to invest in.
Our Methodology
To compile our list of the 10 best renewable energy penny stocks to invest in, we used clean energy ETFs plus online rankings to compile an initial list of 25 renewable energy stocks trading below $5 as of November 22. From that list, we narrowed our choices to 10 stocks according to their hedge fund sentiment, which was taken from the database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in ascending order of their hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Close-up of a composite wind blade, emphasizing the precision molding it is composed of.
TPI Composites, Inc. (NASDAQ:TPIC)
Number of Hedge Fund Holders: 13
Stock Price as of November 22: $1.95
TPI Composites (NASDAQ:TPIC) is a leading manufacturer of composite wind blades for the wind energy sector and a key player in industrial machinery development. The company maintains long-term relationships with major original equipment manufacturers (OEMs) in the wind industry and operates a global network of factories in the U.S., Mexico, Turkey, and India. Additionally, TPI Composites (NASDAQ:TPIC) has engineering centers in Denmark and Germany and training facilities in the U.S. and Spain.
On November 7, TPI Composites (NASDAQ:TPIC) reported financial results for the third quarter that ended September 30. The company’s net sales increased 2.8% to $380.8 million year over year, despite a 10% decrease in production. This growth was largely driven by 89% utilization of plants as the company made progress on starting up 10 lines with next-generation workhorse blades. TPI Composites (NASDAQ:TPIC) has also strategically divested from its Automotive business and shut down the underperforming Nordex Matamoros plant to eliminate losses.
According to Precedence Research, the global wind energy market, valued at $98.74 billion in 2024, is projected to grow to $260.81 billion by 2034 at a CAGR of 10.2%, TPI Composites (NASDAQ:TPIC) is well-positioned to benefit from this growth, with ten manufacturing lines currently in startup or transition phases expected to enhance production capacity.
Overall TPIC ranks 4th on our list of the best renewable energy penny stocks to invest in. While we acknowledge the potential of TPIC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TPIC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
