Rising commodity prices and skyrocketing inflation have imposed on global policy makers the burden of an economic context not seen since the 1970’s. That backdrop is also now paired with increasing angst over the pace and status of the climate change agenda, creating a rock-and-hard-place conundrum where no one wins… except perhaps private sector investments in companies sitting at the leading-edge of the sustainable energy tech revolution.
For most of us, this is an all-or-nothing scenario of accelerating urgency.
Energy prices (think of how the price at the pump has changed this year) are helping to crystallize this emergency. But it has been building for years.
One of the biggest hurdles in solving the problem is complacency. But the current context may finally be enough to spur action on a grassroots level, driven by basic economics. While our old-fashioned reliance on fossil fuels has been understood as a catastrophe in the making for at least a decade, the economics involved in radically shifting that paradigm have been a barrier to action. But the recent jump in oil and gas pricing could spur the collective will to make lasting radical changes.
All of that adds up to an investment thesis supporting a potential mass reallocation of capital into green energy solutions. It’s a perfect storm favoring upside revaluation of assets tethered to that paradigm shift.
Investors may benefit from an increased focus on stocks positioned to offer a new path. With that in mind, we take a close look below at a few of the more interesting stories in the stock market that stand to benefit from this shift.
FuelCell Energy Inc. (Nasdaq:FCEL) engages in the development, design, production, construction and servicing of high temperature fuel cells for clean electric power generation. It develops turn-key distributed power generation solutions and provides comprehensive services for the life of the power plant.
The firm’s fuel cell solution is an alternative to traditional combustion-based power generation and is complementary to an energy mix consisting of intermittent sources of energy, such as solar and wind turbines. It provides solutions for various applications, including utility-scale distributed generation, on-site power generation, combined heat and power, distributed hydrogen, carbon capture and hydrogen-based long duration storage. The Company’s platform has the differentiating ability to do all these applications utilizing multiple sources of fuel including natural gas, renewable biogas, and propane, among other sources.
FuelCell Energy Inc. (Nasdaq:FCEL) recently announced that a carbon capture demonstration project using the Company’s proprietary carbonate fuel cell technology has been awarded $6.8M in funding as part of Canada’s Clean Resource Innovation Network (CRIN) low emission fuels and products technology competition.
“To demonstrate the power of our carbonate fuel cell technology, and for the project to receive this funding from CRIN, is an honor,” said FuelCell Energy CEO and President, Jason Few. “We are confident that the pilot will deliver the significant environmental benefits that the Canadian government is looking for, while helping to decarbonize its oil and gas industry and increase its competitiveness in the global market.”
Even in light of this news, FCEL hasn’t really done much of anything over the past week, with shares logging no net movement over that period.
FuelCell Energy Inc. (Nasdaq:FCEL) managed to rope in revenues totaling $31.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 113.7%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($389.6M against $75.3M).
Eco Innovation Group (OTC US:ECOX) looks like a deep value play in the space. The stock trades on the OTC and is clearly the most speculative name on out list. But the company recently transitioned from development stage to commercial stage and is already seeing strong revenue growth through its ECOX Spruce Construction subsidiary, which is in the business of refitting existing facilities to optimize around ecological footprint.
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. Company communications suggest it will be launching some of its pipeline projects this year. However, in the meantime, its green construction segment is already nailing lucrative deals into place.
Eco Innovation Group (OTC US:ECOX) recently earned projects with a major US military base and a Fortune 500 retailer. Its latest deal is to provide all services to renovate a retail location of a major U.S. merchandiser in Hyannis, Massachusetts.
The contract was awarded by a large project management firm engaged in the development, transformation, and maintenance of real estate in both the public and private sectors, to Edgar E. Aguilar of Blueprint Construction, the managing officer of ECOX Spruce Construction. Through a construction services contract with Aguilar and Blueprint Construction, ECOX fulfills all aspects of Blueprint’s active contractor and subcontractor agreements.
The Company began work in Hyannis on February 21st. ECOX’s management believes that ECOX Spruce Construction may be in a position to renovate additional retail locations for this merchandiser, with over 1,000 stores in North America, as well as other opportunities. The Company has set a goal of achieving $6 million in revenues from related projects in the 2022 fiscal year.
Eco Innovation Group (OTC US:ECOX) CEO Julia Otey-Raudes recently stated, “ECOX Spruce Construction has the capacity to reach our financial target with our current pace of project acquisition. In January, we signed a commercial renovation contract with Davaco for a U.S. military base in California, this month we break ground on a commercial retail renovation, and we intend to continue acquiring and completing green construction projects. The end client here is an iconic Fortune 500 brand in the domestic U.S. retail market, and we are very excited to have broken ground on this project in February 2022.”
Brookfield Renewable Partners L.P. (NYSE:BEP) engages in owning a portfolio of renewable power generating facilities primarily in North America, Colombia, Brazil, Europe, India, and China.
The company operates through its Hydroelectric, Wind, Solar, Energy Transition, and Corporate segments. The Energy Transition segment distributes generation, pumped storage, cogeneration, and biomass.
Brookfield Renewable Partners L.P. (NYSE:BEP) recently announced its participation in a privatization proposal in respect of AGL Energy Limited, the largest integrated power generation and energy retailer in Australia. The Consortium’s proposal which is subject to due diligence as well as other conditions, is at a price of A$7.50/share which values AGL at an equity value of A$5 billion.
“By combining our access to capital and clean energy expertise, we are capable of helping carbon-intensive businesses transition to more competitive and sustainable futures while making a meaningful contribution to the transition to net zero,” said Connor Teskey, CEO of Brookfield Renewable. “By helping businesses such as AGL achieve their net-zero ambitions through the significant build out of clean energy capacity, we can contribute tangible benefits to stakeholders including net-zero GHG emissions, clean power delivered at competitive prices and new jobs in the green economy, all while generating strong returns for our unitholders.”
The chart shows 17% tacked on to share pricing for the listing in the past month. Market participants may want to pay attention to this stock. BEP has evidenced sudden upward volatility on many prior occasions. What’s more, the stock has registered increased average transaction volume recently, with the past month seeing 28% above its longer-run average levels.
Brookfield Renewable Partners L.P. (NYSE:BEP) has a significant war chest ($1.4B) of cash on the books, which is balanced by about $4.1B in total current liabilities. BEP is pulling in trailing 12-month revenues of $5.1B. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 16.2%.
Other core players in the eco-innovation space include Enbridge Inc. (NYSE:ENB), First Solar Inc. (Nasdaq:FSLR), Sony Group Corp. ADR (NYSE:SONY), NIO Inc. ADR (NYSE:NIO), and SolarEdge Technologies Inc. (Nasdaq:SEDG).
