4 hot energy stocks for 2018
Congratulations, you’re about to discover four companies at the cutting-edge of the renewable energy market.
In this report you will discover:
- The UK listed company at the heart of the wind turbine industry
- The global leader in new ‘smart energy’ solutions
- The US firm with next-generational energy storage technologies
- PLUS: the one penny stock Investment Director Eoin Treacy is calling “the biggest moonshot of his entire career”
I attended an energy conference in Brussels a few years ago and recall a gentleman from one of Germany’s largest utilities getting up to talk as one of the keynote speakers.
Renewables, he predicted, would never gain a significant foothold in the German and wider European market. They were too expensive, too intermittent and far too reliant on government subsidies.
However, renewable power last year surged to 36% of Germany’s electricity use, according to the Agora Energiewende think tank.
Not just that, it has fundamentally changed the face of the German power market, causing electricity prices to fall to all-time lows, decimating the profits at all the major utilities, including those of the company our present day Nostradamus worked for.
I say this not to be wise after the event, only to show how easy it is to underestimate the pace of transformational change.
Now, I’m about to show you three companies that have great positioning in this massive market expansion.
During my time as an energy analyst in Manhattan, I learnt a lot about new emerging technologies in the energy market. It allowed me to see behind the curtain and what was on the horizon for energy. But just to be clear: I’m not laying these out as recommendations. This is analysis I’ve put together overtime – which any investor interested in the energy market should find useful.
As with all investments, I recommend doing a bit of research into these companies – make sure you’re comfortable with the risks involved and draw your own conclusions.
Below, I’ll introduce you to a man whose decades of experience as a master trader can help you to dive deeper into companies worth pursuing in the energy market. He’s up at 5am most days, searching for under the radar stocks that are ripe to breakout. He’s let us in on the one penny stock he’s calling “the biggest moonshot of my entire career” – but more about this opportunity in a bit.
Now, onto the companies!
Energy Stock #1: Greencoat UK Wind (LSE:UKW)
In 2017, approximately 15% of the UK’s electricity demand was supplied by wind energy. Greencoat UK Wind, a leading listed renewable infrastructure fund, owns a portfolio of domestic wind farms that stretches across the UK.
The UK-focused fund has stakes in 30 off- and onshore wind farms, which generated 1,457GWh of electricity over the past year or enough for 620,000 homes.
With wind power costs approaching levels where projects no longer require government subsidies, the outlook for wind in the UK is extremely positive.
Greencoat UK Wind is in a great position to benefit as electricity production from wind becomes an increasingly important part of the UK’s generation mix. A constituent of the FTSE 250, the fund also offers an attractive 5% yield.
Energy Stock #2: SolarEdge Technologies (NASDAQ: SEDG)
In June China announced a bombshell solar policy shift that reverberated through the entire solar market. It said it would not build any more solar power stations in 2018 and slashed its feed-in tariff subsidy, which guarantees a certain price for power.
China consumes more than 50% of the world’s current solar power production and is a major player in the manufacturing of solar power technology, so any change in regulations that might affect supply/demand there has a large effect on the share performance of the entire sector.
Because of China’s outsized positioning in the solar sector, PV stocks (shares of any companies in the solar industry) as a whole were hit on the chin in the aftermath – with the shares of many solar companies seeing double-digit losses in the days following the aftermath.
To my mind, that was irrational short-term thinking. The slowdown in the Chinese market will simply further boost growth around the world. An oversupply of cheap Chinese-made panels that had been destined for domestic projects will help boost demand for solar in other countries and sop up some of the demand lost in China.
In fact, shortly after China’s policy change, market research firm IHS Markit published new figures showing the global solar market will still increase by around 11% to 105 GW in 2018. You see, thanks to China’s abrupt withdrawal of support for its solar PV market, prices of panels just got a whole lot cheaper. Bloomberg New Energy Finance now expects module prices to fall 34% in 2018 – an almost unbelievable price drop.
Homes and utilities around the world will now increasingly be able to buy solar panels, meaning the question will be how other technologies can add value and thrive in a system with massive amounts of solar PV. The massive price drop in module prices also means major opportunities for suppliers of all other system components, such as solar inverters and the like.
Israel-based SolarEdge designs and sells solar power optimizers and inverters for residential and small-scale solar power plants. Effectively, its technologies make solar systems produce more electricity. It is quickly becoming a global leader in the intersection of smart technology and solar power, and has a diversified international portfolio of end users.
Energy Stock #3: Sempra Energy (NYSE: SRE)
Sempra Energy is one of the most advanced utilities in the US, thanks for its innovative San Diego-based energy company SDG&E.
Last year, SDG&E went live on a bank of 400,000 lithium-ion batteries – one of the largest battery projects in the world – in California. The batteries act like a sponge, soaking up and storing energy when it is abundant – when the sun is shining, the wind is blowing and energy use is low – and releasing it when energy resources are in high demand, helping to smooth out power flows on the grid.
SDG&E recently announced five new energy storage projects totalling 83.5 MW have been approved.
As one of the first companies able to integrate lithium into its mix, Sempra has a huge advantage over the competition. To my mind, Sempra shares look deeply undervalued by the market.
Definitely one to keep on the radar.
Is there clean energy beyond solar and wind?
For any investor looking to grow their portfolio through the energy market, solar and wind plays are a no-brainer.
We’re starting to see completely new approaches to how energy is made, stored and used. New, innovative advances in technology are solving problems the energy industry has been trying to tackle for years.
But they’re not the only way to profit from the growing renewable energy market.
The move from fossil fuels is taking on many different forms. Ones that have been in development for decades.
And this one could be at the heart of the entire disruption.
Energy Stock #4: Eoin Treacy’s ‘moonshot penny stock play’
Eoin Treacy is an Investment Director here at Southbank Investment Research. He’s got a knack for discovering tech companies that could make his readers huge returns on their money.
On the 9th of March, a team of physicists made a historical energy breakthrough. And through his deep research – found the tiny company that provided a pivotal part to making it a reality.
This new energy source, though still in its early stages, could completely eclipse solar, wind and geothermal in the future… and provide clean, free, limitless energy.
It has the potential to deliver the same amount of energy as burning 100 tonnes of coal or 2,000 barrels of oil – without any carbon dioxide emission.
And compared to intermittent energy sources like wind or solar, it will have a very small footprint.
Once it’s up and running, there is no requirement for massive energy storage systems and it will have the power to run around the clock.
And Eoin is projecting a 3,000% return for investors who position themselves in this penny stock before its mainstream adoption.
*Forecasts are not a reliable indicator of future results*
He’s calling it ‘the biggest moonshot of his entire financial career’.
Until next time,
You may be interested in…
A rare ‘superconductor’ breakthrough by a little-known tech company could provide the planet with limitless, clean energy forever…
Discover how this one tiny energy firm could disappear into oblivion…
Or turn your £500 into £15,285 long term!
Capital at risk. Forecasts are not a reliable indicator of future results. A regulated product from Southbank Investment Research
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