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The Eco-Friendly Bull Market (BE, ECOX, ECL, NEE)

The drumbeat around renewable energy and “green” stocks is deafening in recent action, with millennials in charge of the market, launching the likes of electric vehicle makers, lithium-ion battery service names, solar stocks, and everything green.

And there are certainly good reasons for the ascendance of this theme and the booster rockets attached to the stocks in the space. Besides Joe Biden’s overwhelming lead in the polls and his recent outline of an energy platform that rewards companies with ecological value, we would also point to another dynamic that is shaping the landscape.

LYFT Inc (NASDAQ:LYFT) announced last month that it would commit to making its entire fleet 100% electric by the year 2030. One should see this move not as one company making a commitment, but as a gesture from institutional and corporate America that is knows where its bread is going to be buttered in the years ahead. We will next likely get word that UBER is making the same commitment. Then municipal transportation systems, rental car companies, buses, truckers, police, cabs, etc. 

Everyone will eventually join the parade of commitments.

Why? Because another transition has already happened that more or less forces everyone to fall in line: the birth of the ESG investment paradigm. ESG (Environmental, Social and Governance) investing refers an umbrella term for investments that seek positive returns along with a long-term positive impact on society and the environment.

Morgan Stanley recently put out research suggesting that the ESG theme would attract as much as $57 trillion in capital flows over the next 10 years based on research into millennials’ investment mores and the pace of inheritance likely to capitalize them as the world’s biggest ever investor demographic.

This factor will likely continue to drive capital into stocks that appeal to this new retail investor demographic with new ideals and rules in play. With that in mind, we look several names in the eco-oriented market space that hold explosive promise as this trend develops: Bloom Energy Corp (NYSE:BE), Eco Innovation Group, Inc. (OTCMKTS:ECOX), Ecolab Inc. (NYSE:ECL), and NextEra Energy Inc (NYSE:NEE).

Bloom Energy Corp (NYSE:BE) designs, manufactures, and sells solid-oxide fuel cell systems for on-site power generation. 

It offers Bloom Energy Server, a stationary power generation platform that converts standard low-pressure natural gas, biogas, or hydrogen into electricity through an electrochemical process without combustion. 

The company serves banking and financial services, cloud services, technology and data centers, communications and media, consumer packaged goods and consumables, education, government, healthcare, hospitality, logistics, manufacturing, real estate, retail, and utilities industries. It primarily operates in the United States, Japan, China, India, and the Republic of Korea.

Bloom Energy Corp (NYSE:BE) and Samsung Heavy Industries (SHI), a part of Samsung Group, recently jointly announced that the companies have signed a joint development agreement (JDA) to design and develop fuel cell-powered ships. The two companies will work together to realize their vision of clean power for ships and a more sustainable marine shipping industry.

BE has been acting well over recent days, up something like 15% in that time.

Bloom Energy Corp (NYSE:BE) pulled in sales of $156.7M in its last reported quarterly financials, representing top line growth of -21.9%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($210M against $285.7M, respectively).

Eco Innovation Group, Inc. (OTCMKTS:ECOX) is unquestionably the more speculative, earlier-stage name in this group. But it’s worth a close look given the company’s recent pivot, change in leadership, unique model, and rapid traction.

The pivot, leadership, and model are certainly related ideas. The company shifted to a platform model as an innovation incubator when it brought in Julia Otey-Raudes as its new CEO and visionary leader. According to company materials, Otey-Raudes comes from a former role where she developed a prepotent network of relationships with inventors and innovators working on new solutions to eco-centric problems. That spawned the company’s new direction and model, where it seeks to develop products with explosive promise as environmental solutions with great commercial potential.

Eco Innovation Group, Inc. (OTCMKTS:ECOX) is an incubation platform for commercializing eco-oriented innovations and inventions. The company boasts of strong legal agreements that grant it full and exclusive global commercial rights to its development pipeline products. And it is apparently hard at work building out that very pipeline.

The two ideas covered in the company’s recent shareholder letter outline its progress. 

The first initiative is an exclusive global licensing agreement with the Bellagio IP Trust for the ECOX Power Booster™, which is reportedly a remarkable innovation that taps electricity and magnetism to increase the useful power derived from a given amount of energy. According to the company, customers using this technology may be able to increase the usable energy in their homes by as much as 150% while saving approximately 60% on their electric bills.

The other key first-wave product in development is called PoolCooled™, which the company describes as utilizing “proprietary technology to cool your home or building by taking cool water from an existing swimming pool and looping it through the existing air conditioning systems to boost air conditioning efficiency on a per-unit power consumption basis in the home or building. Based on available information, we believe this technology may yield savings of as much as 50% off residential electric bills. And because the energy transfer occurs, the process also warms the swimming pool with no additional power usage or cost. PoolCooled™ is designed for hotels, motels and apartment buildings, or for use with your own back yard swimming pool.”

There isn’t much depth to the data in terms of financial performance yet. This is purely a development stage company right now following its pivot. But there’s every sign that we could big things ahead from Eco Innovation Group, Inc. (OTCMKTS:ECOX).

Ecolab Inc. (NYSE:ECL) bills itself as a company that provides water, hygiene, and energy technologies and services worldwide. The company operates through Global Industrial, Global Institutional, Global Energy, and Other segments. 

Its Global Industrial segment offers water treatment and process applications, and cleaning and sanitizing solutions primarily to industrial customers within the manufacturing, food and beverage processing, chemical, mining and primary metals, power generation, pulp and paper, and commercial laundry industries. The company’s Global Institutional segment provides specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, healthcare, government, education, and retail industries. 

Its Global Energy segment offers the process chemicals and water treatment needs of the petroleum and petrochemical industries in upstream and downstream applications. The company’s Other segment offers pest elimination services to detect, eliminate, and prevent pests, such as rodents and insects in restaurants, food and beverage processors, educational and healthcare facilities, hotels, quick service restaurant and grocery operations, and other institutional and commercial customers. 

Ecolab Inc. (NYSE:ECL) sells its products through field sales and corporate account personnel, distributors, and dealers.

Even in light of this news, ECL hasn’t really done much of anything over the past week, with shares logging no net movement over that period. ECL shares have been relatively flat over the past month of action, with very little net movement during that period. 

Ecolab Inc. (NYSE:ECL) pulled in sales of $3.6B in its last reported quarterly financials, representing top line growth of 2.2%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.7B against $4.3B, respectively).

NextEra Energy Inc (NYSE:NEE) generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. In short, this is a utility that has embraced renewable energy.

The company generates electricity through wind, solar, nuclear, and fossil fuel, such as coal and natural gas facilities. It also develops, constructs, and operates long-term contracted assets with a focus on renewable generation facilities, natural gas pipelines, and battery storage projects; and owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets. 

As of December 31, 2019, the company operated approximately 27,400 megawatts of net generating capacity. It serves approximately 10 million people through approximately 5 million customer accounts in the east and lower west coasts of Florida with approximately 75,400 circuit miles of transmission and distribution lines and 661 substations. 

NextEra Energy Inc (NYSE:NEE), as noted above, qualifies as a utility that has adopted a long-term vision as a renewable energy provider. According to a recent article in Barron’s, that lines the company up to benefit from the energy policy we will likely see come into place in a Joe Biden presidency, which is currently what polls are heavily favoring.

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 6% in that timeframe.

NextEra Energy Inc (NYSE:NEE) generated sales of $3.6B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -14.5% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($3.7B against $13.7B, respectively).

Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing. http://www.facebook.com/ben.rouss

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