This article presents an overview of the 5 Best Wind Power and Solar Stocks To Buy. For a detailed overview of such stocks, read our article, 12 Best Wind Power and Solar Stocks To Buy.
5. First Solar Inc (NASDAQ:FSLR)
Number of Hedge Fund Investors: 47
First Solar Inc (NASDAQ:FSLR) ranks fifth in our list of the best solar and wind stocks to buy according to hedge funds. As of the end of the fourth quarter of 2023, 47 hedge funds had stakes in First Solar Inc (NASDAQ:FSLR). The biggest stake in First Solar Inc (NASDAQ:FSLR) is owned by Robert Pohly’s Samlyn Capital which owns a $309 million stake in First Solar Inc (NASDAQ:FSLR).
Earlier this month, BofA analysts set a $272 price target on First Solar shares. This price target presents a strong upside potential based on the February 20 stock price of $156.
4. Constellation Energy Corp (NASDAQ:CEG)
Number of Hedge Fund Investors: 41
Constellation Energy has several renewable energy projects under its belt. The company operates 27 wind projects across 10 states with a production capacity of 1,400 megawatts of electricity.
As of the end of the fourth quarter of 2023, 41 hedge funds tracked by Insider Monkey had stakes in Constellation Energy.
3. NextEra Energy Inc (NYSE:NEE)
Number of Hedge Fund Investors: 65
NextEra Energy Inc (NYSE:NEE) produces electricity through wind, solar, nuclear, natural gas, and other clean energy. The stock is making waves after it recently upped its dividend by 10.2%. With close to three decades of consistent dividend increases and a healthy yield of over 3.5%, it is one of the top favorite wind and solar stocks among hedge funds.
A total of 65 hedge funds tracked by Insider Monkey had stakes in NextEra Energy Inc (NYSE:NEE) as of the end of the fourth quarter of 2023.
ClearBridge All Cap Value Strategy made the following comment about NextEra Energy, Inc. (NYSE:NEE) in its Q3 2023 investor letter:
“Many businesses are threatened by a higher cost of capital, but one where reality has set in, and which also touches many other growth areas of the market, is the utility company NextEra Energy, Inc. (NYSE:NEE). Over the past few years, the company developed into a growth darling thanks to its strong track record in renewable energy development and tailwinds from the global energy transition and incentives in the Inflation Reduction Act. The problem for NextEra, and the transition broadly, is that this transformation is immensely capital intensive and many renewables projects offer lower returns on that capital. This requires high capital expenditures – often resulting in negative free cash flow – to meet the growth and financing needs of companies like NextEra. To help, the company leaned on financial engineering by using a publicly traded limited partnership called NextEra Energy Partners, providing further capacity for its parent to continue its development plans. NEP used layers of its own financial engineering to fund its own negative free cash flow and a large, growing dividend yield that we believe it could not sustain organically. Ultimately, the higher cost of debt from rising rates led NEP to lower its own growth ambitions, driving concerns about whether NextEra can execute on its extensive backlog. As a result, the stock has declined by approximately 30% year to date.”
2. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 82
Tesla’s solar panels business and its market leading position in the EV space makes it a notable stock in the solar and renewable energy industry. A total of 82 hedge funds tracked by Insider Monkey had stakes in Tesla as of the end of the fourth quarter of 2023.
O’keefe Stevens Advisory stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its fourth quarter 2023 investor letter:
“In my Q4 2022, l made three predictions: 1. One of our top 25 holdings gets acquired 2. TSLA is a sub $200B market cap by the end of 2023 3. Crypto, the final blow.
Tesla, Inc. (NASDAQ:TSLA) is a sub $200B market cap by the end of 2023. Grade: D. TSLA performed contrary to expectations, appreciating approximately 100% in 2023 and ending the year with an $880 billion market cap. We were “just a bit outside,” but I’m not convinced our reasoning was flawed.
The typical strong correlation between earnings estimates and stock prices did not hold for TSLA during the year. Positive revisions suggest a company outperformed expectations, resulting in a higher price/valuation. Negative revisions suggested estimates were too high, and the stock should decline to meet a weaker outlook…” (Click here to read the full text)
1. General Electric Co (NYSE:GE)
Number of Hedge Fund Investors: 92
With a gigantic green energy arm Vernova, General Electric Co (NYSE:GE) is among the top favorite wind power and solar stocks to buy according to hedge funds. General Electric Co (NYSE:GE) plans to spin off its Vernova unit by April 2024 after which Vernova would be a publicly traded company. Vernova has 55,000 wind turbines and 7,000 gas turbines. General Electric Co (NYSE:GE) says its technology helps generate a whopping 30% of the world’s electricity.
A total of 92 hedge funds tracked by Insider Monkey had stakes in General Electric Co (NYSE:GE) as of the end of the fourth quarter of 2023.
Longleaf Partners Fund stated the following regarding General Electric Company (NYSE:GE) in its fourth quarter 2023 investor letter:
“General Electric Company (NYSE:GE) – Industrial conglomerate General Electric (GE) was the top performer for the year. We exited this multi-year investment as its price went above our appraisal. In 1Q23, GE spun out GE Healthcare, which we sold as it traded at our value. The share price continued its strong performance throughout the spring and summer, and we ultimately sold the position in the third quarter when we no longer saw a margin of safety for the business. CEO Larry Culp was a great partner who created significant value for shareholders by reducing leverage, cutting costs, streamlining operations, improving company culture and simplifying the structure with plans to split the company into three businesses. We hope to have the opportunity to partner with him again in the future.”
Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 12 Best Solar Power Stocks To Invest In According to Financial Media and the 12 Most Promising Solar Stocks According to Analysts.
