Looking ahead over the next five years seems like an eternity for postulating portfolio management strategies when it comes to sector allocation. But we can hang our hat on certain key principles.
First off, where will see the biggest growth?
One can look toward a few key themes as top candidates: Metaverse, Genomics, DeFi, Edge Computing, and Robotics are clear winners. But the most obvious domain of growth dominance is probably Sustainable Energy. This includes carbon capture, energy storage, electric vehicles, grid restructuring, and smart infrastructure, as a start.
These technologies will come under increasing demand for investors as energy costs from traditional fossil fuels rise, which is likely now as investment dwindles in fossil fuel sources over the extended future time frame.
Why is Crude Oil at $110/bbl right now? It isn’t because Russia invaded Ukraine. It’s because energy production has become inelastic as investors see the end of the fossil fuel road in sight and are no longer willing to suffer the political or logistical burden of tying up large amounts of capital in projects that could take years to actualize only to languish in a future now known to be dominated by a new energy paradigm.
But over the short-term, that lack of fossil fuel production growth could continue to drive gasoline and oil prices through the roof, driving accelerating urgency to develop and deploy sustainable solutions even sooner than planned.
That’s a perfect storm for flows into green tech plays – a group that has been clobbered over the past six months with the growth stock sector. Now, these plays are starting find fresh momentum, and investors may benefit from quick action before the horse leaves the barn altogether.
With that in mind, we take a look below at a handful of the most interesting sustainable green tech stocks out there with recent key catalysts in play.
CleanSpark Inc. (Nasdaq:CLSK) bills itself as a company involved in providing advanced energy software and control technology that enables a plug-and-play enterprise solution to modern energy challenges.
The company’s services consist of intelligent energy monitoring and controls, Microgrid design and engineering, Microgrid consulting services, and turn-key Microgrid implementation services. The company’s software allows energy users to obtain resiliency and economic optimization.
CleanSpark Inc. (Nasdaq:CLSK) recently announced announced that it has increased the starting salary of all existing entry-level positions in its mining operations to $19 per hour. The hourly pay of the Company is now more than that of similar positions at the biggest e-commerce or cloud-computing companies in the United States.
“We want to attract the A-players with great pay and benefits,” says Matt Schultz, Chairman at CleanSpark. “Like the biggest tech giants, we want to be known for having strong talent that gets paid well.”
“Our mining operations compensation plan is designed to show our employees how much we value their efforts,” said Zurii Mershant-D’Ambra, Human Resources Manager at CleanSpark. “CleanSpark wants to set the precedence for mining tech salaries in the bitcoin mining industry.”
And the stock has been acting well over recent days, up something like 30% in that time.
CleanSpark Inc. (Nasdaq:CLSK) managed to rope in revenues totaling $41.2M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 1726.8%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($36.2M against $22.5M).
Eco Innovation Group (OTC US:ECOX) is included here despite being a traditional penny stock because it’s trading at deep discount levels relative to its growing commercial activity, and it has an interesting IP thesis that could help it actually emerge as a key player set to uplist to a major exchange over time, presenting a big speculative opportunity for those willing to take a little extra risk.
ECOX seems to be gaining traction toward a series of meaningful launches involving innovative green tech solutions. The company’s model is driven by nurturing the work of top inventors in the US and Canada, helping to bring their best green-tech ideas to life and then signing exclusive licensing deals to commercialize the results. But the company has also entered the green construction space and has started to put together lucrative deals to renovate existing facilities for 21st century life.
Eco Innovation Group (OTC US:ECOX) most recently that its green construction subsidiary, ECOX Spruce Construction, has been contracted to provide all services to renovate a retail location of a major U.S. merchandiser in Hyannis, Massachusetts.
ECOX is particularly interesting because it has a portfolio of new ideas with commercial application, but it also has a diversified model that balances long-duration high-impact technology with more immediate revenue-generating operations, such as its green construction segment, which is now starting to drive topline growth to help fund its more ambitious higher-margin projects, like its PoolCooled technology.
PoolCooled is a climate control solution that leverages proprietary technology to cool a home or building by taking cool water from an existing swimming pool and looping it through the existing air conditioning system to boost efficiency on a per-unit power consumption basis. It has enormous application potential, including the residential construction market as well as hotels, motels, and public facilities.
The company appears to be readying PoolCooled for market this year. In the meantime, its ECOX Spruce Construction segment continues to pick up contracts, with a major California military base already signed on and now a major Fortune 500 retailer project underway. ECOX reportedly began work for this client on February 21st, and management has said that it believes its green construction segment may be in a position to renovate additional retail locations for this merchandiser, which boasts over 1,000 stores in North America, according to the company’s official communications.
Eco Innovation Group (OTC US:ECOX) has set a goal of achieving $6 million in revenues from just its ECOX Spruce Construction projects in 2022. Given this backdrop, at a current market cap of less than $1 million, the stock seems potentially very underpriced at current levels.
Plug Power Inc. (Nasdaq:PLUG) provides alternative energy technology, which focuses on the design, development, commercialization, and manufacture of hydrogen and fuel cell systems used primarily for the material handling and stationary power markets.
The company’s fuel cell system solution is designed to replace lead-acid batteries in electric material handling vehicles and industrial trucks for some distribution and manufacturing businesses.
Plug Power Inc. (Nasdaq:PLUG) recently announced that it has signed a collaboration agreement with Atlas Copco Mafi-Trench Company LLC, the turboexpander technology center within the Gas and Process division of Atlas Copco, and Fives, a global leader in brazed heat exchangers and cryogenic cold boxes, to jointly develop hydrogen liquefaction plants (also known as hydrogen liquefiers). Liquifying hydrogen makes it easier to transport, leading to significant cost savings and broader distribution coverage.
“Plug Power manufactures the best electrolyzer solution in the world today,” said Andy Marsh, CEO of Plug Power. “And, we have the complete delivery network in place. The liquefier system is key to offering hydrogen in liquid form, which is ideal because of its superior energy density versus gaseous hydrogen, lower transportation cost and potential for powering trains, ships and airplanes. Joule’s capabilities complete this end-to-end green hydrogen solution for Plug Power, making us the only company in the world with such comprehensive offerings.”
Recent action has seen 28% tacked on to share pricing for the name in the past week, but that move comes in the context of a larger bearish trend. Market participants may want to pay attention to this stock. PLUG has evidenced sudden upward volatility on many prior occasions. What’s more, the listing has witnessed a pop in interest, as transaction volume levels have recently pushed 34% above the average volume levels in play in this stock over the longer term.
Plug Power Inc. (Nasdaq:PLUG) currently trades at a market cap of $14.6 billion with a significant war chest ($4.3B) of cash on the books, which stands against about $269.9M in total current liabilities. One should also note that debt has been growing over recent quarters. PLUG is pulling in trailing 12-month revenues of $423.8M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 34.5%.
Other key players in the environmental sustainability space include FuelCell Energy Inc. (Nasdaq:FCEL), Clean Energy Fuels Corp. (Nasdaq:CLNE), Bloom Energy Corp. (NYSE:BE), Brookfield Renewable Partners L.P. (NYSE:BEP), and Enphase Energy Inc. (Nasdaq:ENPH).
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