Weakness will eventually prove to be an opportunity in renewable energy stocks to buy.
Right now, many of these stocks are falling because of higher inflation, with the consumer price index coming in hotter than expected. That, of course, is derailing hopes for aggressive interest rate cuts at the moment. However, once inflation cools, and the Fed cuts interest rates, we could see a substantial return of interest in renewable energy stocks.
While the idea does carry risk, investors may want to take advantage of weakness now. After all, as we’ve learned from Baron Rothschild, the time to buy is when there’s blood in the streets, even if the blood is your own. Even Warren Buffett will tell you a climate of fear is your friend.
So, if you have the stomach for it, and a good deal of patience, I’d start accumulating renewable energy stocks to buy and exchange-traded funds (ETFs) such as:
Cameco (CCJ)
One of the top renewable energy stocks to buy is Cameco (NYSE:CCJ).
After rocketing from a low of about $36 to a high of nearly $51, the uranium stock plunged to a recent low of $42.18. At that price, it’s technically oversold on RSI, MACD and Williams’ %R. It’s also now sitting at double bottom support dating back to January.
From here, I’d like to see CCJ retest its prior high above $51.
Mounting supply-demand issues, along with uranium prices reaching 16-year highs, should help Cameco get there. Plus, with global governments intensifying their fight against climate change, many are quickly realizing that if they want a carbon-neutral future, nuclear energy has to be part of the solution.
In addition, uranium demand for nuclear reactors could climb about 28% by 2030, and double by 2040, according to the World Nuclear Association.
NexGen Energy (NXE)
Another one of the top renewable energy stocks to buy is NexGen Energy (NYSE:NXE), which is slightly oversold on a pullback. Now at $7.43, and trading above its 50-day moving average, I’d like to see NXE again challenge $8.25 initially.
Helping, the world’s largest producer of uranium again warned its 2025 plans could be curtailed by delays and problems with sulfuric acid — which is used to extract uranium. As Seeking Alpha reported,
“Kazakh uranium miner Kazatomprom, which produces ~20% of the world’s uranium, said it will produce only 80% of its permitted maximum uranium output allowed under Kazakh subsoil usage contracts, instead of the previously announced 90% level.”
That’s also creating a supply-demand issue, which benefits NXE.
Global X Uranium ETF (URA)
There’s also the Global X Uranium ETF (NYSEARCA:URA) for those wanting to diversify at a low cost. With an expense ratio of 0.69%, the ETF invests in companies involved in uranium mining and production, including those in extraction, refining, exploration or manufacturing of equipment for the uranium and nuclear industries.
The URA ETF also just pulled back to support at its 50-day moving average, which puts it at $28.96. From here, I’d like to see it initially retest $32.60, and eventually $40 a share.
Enphase Energy (ENPH)
Or, look at renewable energy stocks to buy like Enphase Energy (NASDAQ:ENPH).
Over the last few weeks, ENPH soared from about $100 to $131.87 and could see higher highs. While earnings weren’t so hot, the company did say it expects inventory levels to normalize, and for product demand to pick up again by the end of the second quarter. As CEO Badri Kothandaraman said,
“We have been managing through a period of slowdown in demand. We think Q1 could be the bottom quarter. Europe is already showing early signs of recovery, and we expect the non-California states to bounce back quickly.”
Analysts at Oppenheimer also upgraded ENPH to an “outperform” rating, with a $133 price target. The firm believes negativity has been priced into the stock.
First Solar (FSLR)
Another one of the top renewable energy stocks to buy is First Solar (NASDAQ:FSLR).
Over the last week, shares ran from about $136 to a recent high of $163.43. From here, I’d like to see it again test prior resistance around $178. Helping, analysts at RBC initiated coverage of FSLR with an “outperform” rating, noting the solar industry is nearing “an inflection point,” as noted by Seeking Alpha.
The industry “should continue to benefit from a positive rate of change and will continue to see long-term support from public policy, emissions regulation and declining costs,” even as both residential and utility scale solar face headwinds in the near term, they added.
Also, not long ago, Morgan Stanley upgraded FSLR to an “overweight” rating, noting the stock would benefit from changes in government policy. The firm added,
“We estimate the company will generate $13 billion of free cash flow through 2032 just from IRA tax credits alone, which will provide the company with significant excess cash for technology R&D [research and development], M&A [mergers and acquisitions], or capital return.”
Invesco Solar ETF (TAN)
Or, if you want to diversify with 45 solar names, there’s the Invesco Solar ETF (NYSEARCA:TAN) — which is also starting to pivot higher. After finding support at $40, it’s now back up to $46.86. From here, I’d like to see it retest $54 a share. With an expense ratio of 0.67%, the TAN ETF tracks the results of the MAC Global Solar Energy Index.
Some of the TAN ETF’s top holdings include Sunrun (NASDAQ:RUN), Shoals Technologies(NASDAQ:SHLS), Array Technologies (NASDAQ:ARRY), Enphase Energy, First Solar and SolarEdge (NASDAQ:SEDG) to name a few.
Southern Copper (SCCO)
After pulling back, Southern Copper (NYSE:SCCO) is just as attractive.
After finding strong support dating back to January, it’s already pivoting higher. From its last price of $82.97, I’d like to see it refill its bearish gap around $86 initially. Additionally, we have to remember that copper is a crucial component of renewable energy, especially in wind, solar and even with electric vehicle charging infrastructure.
Lastly, some analysts say copper could rocket about 75% higher by 2025, with deficits. All of which could send copper stocks, like SCCO even higher.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
