These Energy Stocks Are Screaming Buys

 
 
It’s hard to find a set of investments with stronger tailwinds today than renewable energy stocks.

Public support for solar expansion is at all-time highs. The US, EU and Chinese governments are all subsidizing next-generation nuclear reactor projects. And a rapidly-rebounding post-COVID-19 economy is hungry for new infrastructure projects.

But you wouldn’t know it from looking at the recent performance of renewable energy stocks. 
 
 
 
As you can see above, the iShares Global Clean Energy ETF (NASDAQ: ICLN) has significantly underperformed the S&P 500 for all of 2021 so far.

Not only has clean energy underperformed, it’s been sold off to the tune of ~20% year-to-year.

So why is such a supposedly-unstoppable class of stocks so beaten-down right now? And how long will they stay at such low valuations?

To answer these questions, we need to look at the reasons why renewable energy stocks have sold off…

Temporary Headwinds

Some of the headwinds renewable energy stocks are facing in recent months aren’t specific to renewable energy; they’re broad-market forces.

The Nasdaq composite, the benchmark index of the exchange on which most renewable energy stocks trade, took a backseat to other sectors of the market over the past six months.

As oil, materials, and real estate have inflated quickly… the high-flying Nasdaq has been outperformed by other sectors so far in 2021 as investors sought safety from inflation and fled “growth”. 
 
In the process, cleantech and renewable energy stocks were thrown out with the bathwater.  The breakdown in infrastructure talks in Congress likely compounded this effect as that sector always tastes better with a little government cheese on top.

Nonetheless, energy in general has continued to inflate. It is the best performing S&P sector so far this year. Oil remains near two year highs. Natural gas is now moving up. And I don’t have to tell you about prices at the pump. 
 
 
These short-term headwinds are now abating as investors realize that: 
 
  • There are energy stocks on the Nasdaq, too

  • An infrastructure package works its way through Washington DC

  • Record heat strains grids and underscores necessity of energy investment
In fact, the smart money is already piling back into renewable energy. 
 
The time to rotate back into clean energy stocks is now.

Click here to see which ones I’m buying… and why.
 

Call it like you see it, 

Nick Hodge

Nick Hodge
Publisher, Resource Stock Digest
 

Nick Hodge is the co-owner and publisher of Resource Stock Digest. He's also the founder and editor of Foundational Profits, Family Office Advantage, and Hodge Family Office . He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.

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