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 Waste Connections, Inc. (NYSE:WCN) 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order, signed on Trump’s first day in office after being sworn in for a second term, marks the second time the US has withdrawn from the agreement, having previously done so in 2017.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.
A fleet of waste management trucks driving through a city at sunrise.
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).
Waste Connections, Inc. (NYSE:WCN)
Number of Hedge Fund Investors: 48
Waste Connections, Inc. (NYSE:WCN) is a leading provider of waste management, recycling, and environmental services across North America. The company emphasizes sustainable waste disposal practices, recycling initiatives, and landfill gas-to-energy projects to minimize its environmental footprint. Waste Connections, Inc. (NYSE:WCN) collaborates with municipalities, commercial businesses, and industrial clients to offer customized waste management solutions.
Waste Connections, Inc. (NYSE:WCN) is concentrating on expanding its presence in key markets. The company is poised for a record year of private company acquisitions, with over $700 million in annualized private company revenue signed or closed by October 30. These acquisitions encompass solid waste franchises, new market entries, oil and natural gas waste facilities, and tuck-in operations within or near its existing service areas. A notable acquisition is Royal Waste Services, a prominent waste management company in New York City, which has positioned Waste Connections, Inc. (NYSE:WCN) as the largest and only fully integrated waste provider in the city. This strategic acquisition is expected to unlock significant growth and operational efficiencies, especially with the city’s shift to a franchise model, where the company has secured exclusive contracts with municipalities and businesses to be the primary waste collection provider.
Waste Connections, Inc. (NYSE:WCN) is dedicated to sustainable practices and has made substantial progress in achieving its long-term ESG (Environmental, Social, and Governance) goals. The company has successfully reduced emissions intensity by 40% and absolute emissions by 13% over multiple years.
Overall WCN ranks 7th on our list of the most promising green stocks according to hedge funds. While we acknowledge the potential of WCN 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 WCN 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.
