We recently compiled a list of the 12 Most Promising Green Stocks According to Hedge Funds. In this article, we are going to take a look at where Aptiv PLC (NYSE:APTV) stands against the other most promising green stocks according to hedge funds.
President Donald Trump has signed an executive order directing the United States to withdraw from the Paris climate agreement, which is a significant blow to worldwide efforts to combat global warming. The order, signed on Trump’s first day in office after being sworn in for a second term, marks the second time the US has withdrawn from the agreement, having previously done so in 2017. The Biden administration had previously submitted a plan to cut US greenhouse gas emissions by more than 60% by 2035, but Trump’s withdrawal from the Paris Agreement has threatened to undermine these efforts.
On 20 January, The Guardian reported that the global financial sector is witnessing a significant shift away from its commitment to net zero emissions, as banks, asset managers, and industry groups move to accommodate the Trump administration’s anti-net zero stance. At the center of this shift are two key initiatives: The Glasgow Financial Alliance for Net Zero (GFANZ) and The Net Zero Asset Managers (NZAM) initiative.
GFANZ, a global coalition of financial institutions, was launched in 2021 at the COP26 climate conference in Glasgow, Scotland, with the goal of mobilizing the trillions of dollars needed to deliver the goals of the Paris Agreement. The alliance had set a goal of achieving net-zero emissions by 2050, and its members had committed to aligning their financing activities with the goals of the Paris Agreement. However, in a significant reversal, GFANZ has abandoned its requirement that members be aligned with the Paris Agreement, following a series of withdrawals by major US banks.
READ ALSO: 12 Cheapest Stocks with Biggest Upside Potential and Top 10 Undervalued Tech Stocks to Buy According to Hedge Funds.
The Net Zero Asset Managers (NZAM) initiative, which includes some of the world’s largest asset managers, has also been impacted by the shift in the global financial sector. NZAM was launched in 2020 with the goal of promoting net-zero investing and supporting the transition to a low-carbon economy. The initiative had gained significant momentum, with over 200 asset managers signing up to its principles and committing to align their investment portfolios with the goals of the Paris Agreement.
However, in recent weeks, NZAM has also suspended its monitoring of members’ progress towards their net-zero commitments, and has announced a review “to ensure NZAM remains fit for purpose in the new global context.” BlackRock, the world’s largest asset manager, has also quit the NZAM initiative, citing “confusion” over its membership. The departure of BlackRock, which manages over $11 trillion in assets, is seen as a significant blow to the initiative and has raised concerns about the ability of NZAM to achieve its goals.
The recent policy shifts and the wavering commitment of major financial institutions to net-zero goals represent significant setbacks in the global fight against climate change. However, sectors such as renewable energy and electric vehicles are expected to continue demonstrating resilience due to their cost-effectiveness, technology advancements, and economies of scale.
Our Methodology
To compile our list of the 12 most promising green stocks according to hedge funds, we used environmental ETFs plus online rankings to compile an initial list of 25 green stocks. We then used Insider Monkey’s Hedge Fund database to rank 12 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of 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).
Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Investors: 52
Aptiv PLC (NYSE:APTV) is a global technology company specializing in advanced safety, electrification, and connected car solutions for the automotive industry. The company plays a pivotal role in the transition to a sustainable and electrified transportation system by offering both software and hardware solutions. Aptiv (NYSE:APTV) is also recognized for its focus on sustainable manufacturing practices and energy-efficient technologies.
Aptiv PLC (NYSE:APTV) is making significant investments in the development of cutting-edge technologies, including high-voltage electrical architecture solutions, battery management systems, and electric motor control systems for the electric vehicle (EV) market. The company is also dedicated to creating cost-effective solutions for EVs, such as its modular electrical distribution systems, which aim to lower the overall cost of EV production. In addition, Aptiv (NYSE:APTV) is collaborating closely with its OEM customers to support the development of new EV platforms and models by incorporating advanced safety features and user experience enhancements. The company also focusing on its Gen 6 ADAS platform, which offers a high-performance, scalable solution at a competitive cost.
Aptiv PLC (NYSE:APTV) is prioritizing investments in emerging EV technologies, such as battery management and electric motor control systems. The company has made strategic investments in several EV-related startups and has formed partnerships with leading EV manufacturers to develop and produce advanced EV components.
Overall, APTV ranks 6th on our list of the most promising green stocks according to hedge funds. While we acknowledge the potential of APTV 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 time frame. If you are looking for an AI stock that is more promising than APTV 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.
