In this article, we discuss 5 renewable energy stocks that can benefit as Europe braces for harsh winter. If you want to see more stocks in this selection, check out These 10 Renewable Energy Stocks Can Benefit as Europe Braces for Harsh Winter.
5. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 24
Bloom Energy Corporation (NYSE:BE) is a manufacturer of solid-oxide fuel cell systems for on-site power generation in the United States and internationally. The company serves data centers, healthcare manufacturing facilities, biotechnology facilities, grocery stores, hardware stores, banks, telecoms, and other critical infrastructure applications. In late June, Bloom Energy Corporation (NYSE:BE) reported that its fuel cell platform now meets Conformité Européenne requirements and the company can ship to the European Union, catering to the growing European market for fuel cells and clean energy.
On August 25, BofA analyst Julien Dumoulin-Smith resumed coverage of Bloom Energy Corporation (NYSE:BE) with a Buy rating and an unchanged price target of $34 after the company announced a 15 million share equity raise. He continues to see momentum into year end at Bloom Energy Corporation (NYSE:BE) and said that “many opportunities” are not factored in the current share price.
According to Insider Monkey’s data, Bloom Energy Corporation (NYSE:BE) was part of 24 hedge fund portfolios at the end of Q2 2022, compared to 29 funds in the last quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a prominent stakeholder of the company, with more than 1 million shares worth $17 million.
4. Sunnova Energy International Inc. (NYSE:NOVA)
Number of Hedge Fund Holders: 25
Sunnova Energy International Inc. (NYSE:NOVA) is a Texas-based company that provides residential solar energy systems in the United States. The company has over 100 industry partners in more than 20 countries around the world. For Europe, Latin America, Southeast Asia, and other emerging photovoltaic markets, the yearly solar delivery has exceeded 1 GW. It is one of the renewable energy stocks that stand to gain as Europe braces for harsh winter.
JPMorgan analyst Mark Strouse on August 8 raised the price target on Sunnova Energy International Inc. (NYSE:NOVA) to $54 from $43 and reaffirmed an Overweight rating on the shares. The analyst believes Sunnova Energy International Inc. (NYSE:NOVA) can benefit from the Inflation Reduction Act, noting that renewables have more upside and companies with domestic manufacturing will be the most immediate beneficiaries.
Among the hedge funds tracked by Insider Monkey, 25 funds were bullish on Sunnova Energy International Inc. (NYSE:NOVA) at the end of Q2 2022, compared to 26 funds in the earlier quarter. Electron Capital Partners is a notable shareholder of the company, with over 3 million shares worth $56.5 million.
Here is what the Clearbridge Investments Small Cap Strategy had to say about Sunnova Energy International Inc. (NYSE:NOVA) in its Q1 2022 investor letter:
“We initiated a new position in Sunnova (NYSE:NOVA), in the energy sector. Sunnova is a residential solar and energy storage company that enables adoption through a network of installers with options for financing, service and broader home energy management. Rising interest rates and solar energy supply constraints weighed on the stock’s performance in the fourth quarter of 2021 but created a compelling valuation opportunity to buy this business when the market was embedding low growth expectations. We believe Sunnova will deliver value accretive growth for a much longer time, with its downside limited by the long-term, fixed-rate, high- quality contracts it has with customers.”
3. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 26
First Solar, Inc. (NASDAQ:FSLR) is an Arizona-based company providing photovoltaic solar energy solutions in the United States, Japan, France, Canada, India, Australia, and internationally. The company’s Europe offices are located in Frankfurt and Brussels. First Solar, Inc. (NASDAQ:FSLR) is positioned to be one of the biggest beneficiaries of the new US climate bill.
On August 31, BofA analyst Julien Dumoulin-Smith raised the price target on First Solar, Inc. (NASDAQ:FSLR) to $152 from $141 and kept a Buy rating on the shares after the company disclosed plans to expand its U.S. manufacturing capacity with a new 3.5GW facility in the Southeast and further scaling its existing Ohio facility. The analyst believes the expansion plans are “a positive development” while also acknowledging that he already expected the update.
According to Insider Monkey’s data, 26 hedge funds were bullish on First Solar, Inc. (NASDAQ:FSLR) at the end of June 2022, compared to 35 funds in the last quarter. Louis Bacon’s Moore Global Investments is a notable position holder in the company, with 1.14 million shares worth $21 million.
Here is what White Brook Capital had to say about First Solar, Inc. (NASDAQ:FSLR) in its Q1 2021 investor letter:
“First Solar (FSLR) and Itron (ITRI), both of which I’ve written about in past In Focus sections, were long-term positions that were sold as their prices exceeded price targets. Both are solid companies that remain on my watchlist, but the opportunity cost of not investing in other potential investments exceeded their potential mid-term returns.”
2. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 39
Shell plc (NYSE:SHEL) is a London-based energy and petrochemical company operating in Europe, Asia, Oceania, Africa, the United States, and the rest of the Americas. The company’s Renewables and Energy Solutions segment generates electricity through wind and solar resources. The company also produces and sells hydrogen, offers electric vehicle charging services, as well as energy storage. Shell plc (NYSE:SHEL) posted a Q2 GAAP EPS of $4.80 and a revenue of $100 billion, outperforming market estimates by $1.69 and $17.76 billion, respectively.
Investment advisory Berenberg on August 1 maintained a Buy recommendation on Shell plc (NYSE:SHEL) but lowered the price target on the shares to EUR 31.50 from EUR 33.
Among the hedge funds tracked by Insider Monkey, 39 funds reported long positions in Shell plc (NYSE:SHEL) at the end of the second quarter of 2022, compared to 37 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with 20.25 million shares worth $1.06 billion.
Here is what Harding Loevner International Equity Fund has to say about Shell plc (NYSE:SHEL) in its Q1 2022 investor letter:
“While risks of unforeseen consequences arising from the Ukraine conflict are high, on this front we are cautiously optimistic that China will work hard to maintain its neutrality in a credible way, as it is a huge beneficiary of trade with the rest of the world, especially the rich developed nations. We think it likely that China, along with India, will continue to buy oil and gas from Russia (just as Europe, at least for now, plans to keep its gas pipelines open), and do not expect that fact to alter China’s trade relations with the West much. Nevertheless, we must contemplate that our optimism is misplaced on the importance of membership in the global network of exchange. If our central and optimistic case—admittedly an educated guess—is wrong, then we’d need to greatly modify our views of which companies in our opportunity set will face new barriers to profitable growth, and which might stand to benefit, relatively, from a further receding of globalization. (Global trade, after all, has never matched the peak share of GDP it reached in 2008, before the Global Financial Crisis.) We’d expect such a world to be less efficient, as the cold logic of comparative advantage is demoted as a determinant of which goods or services are produced and where. That would lead to a less prosperous world, since exploiting comparative advantage is a cornerstone of wealth creation. If regional blocs began to raise limits on the movement of capital as well as goods, we’d need to parse which of our multinational companies were at risk of declining sales from increasingly hostile, siloed countries. Royal Dutch Shell (NYSE:SHEL) has found its Siberian oil and gas joint venture assets stranded by the combination of sanctions and the public opprobrium of Russia’s actions.”
1. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Holders: 40
SolarEdge Technologies, Inc. (NASDAQ:SEDG) is an Israel-based solar company that operates through Solar, Energy Storage, e-Mobility, Critical Power, and Automation Machines segments. The company’s Q2 results showed declining margins, driven by a weak Euro. Since 47% of SolarEdge Technologies, Inc. (NASDAQ:SEDG)’s revenue is generated in Europe, the CFO Ronen Faier said lower margins in the near-term will result in long-term growth, given the huge demand in Europe.
On August 18, Morgan Stanley analyst Stephen Byrd raised the price target on SolarEdge Technologies, Inc. (NASDAQ:SEDG) to $352 from $316 and maintained an Equal Weight rating on the shares. The analyst increased growth rates for renewables due to the clean energy support from the new Inflation Reduction Act legislation.
According to Insider Monkey’s data, SolarEdge Technologies, Inc. (NASDAQ:SEDG) was part of 40 hedge fund portfolios at the end of June 2022, compared to 47 funds in the last quarter. Ian Simm’s Impax Asset Management is the leading stakeholder of the company, with 580,909 shares worth $158.20 million.
Here is what ClearBridge International Growth EAFE Portfolio has to say about SolarEdge Technologies, Inc. (NASDAQ:SEDG) in its Q2 2022 investor letter:
“We are well-positioned to participate in the accelerating energy transition. High and rising utility costs combined with policy support are driving increased penetration of home solar plus storage systems in Europe. Israel-based SolarEdge Technologies (NASDAQ:SEDG) expects to see significant growth in solar installations in this market led by Germany and Italy, among others, where consumers are not only demanding solar on the roof but a complete system solution including batteries. This phenomenon is accelerating revenue growth for these companies.”
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