As growth stocks pull back in 2022, investors face what could be a defining long-term investment opportunity (1). When the streets run red with the blood of panic, savvy market participants encounter their most important opportunities (2). While the S&P isn’t down all that much, high-growth stocks have been disproportionately hit.
One of the epicenters of this process is the green technology space. (3)
The Russian invasion of Ukraine is a meaningful piece of this puzzle. The sanctions against Russian oil as well as the threats of additional sanction from the EU and other regions introduce the risk of enormous disruptions in the supply of many commodities, with energy at the heart of the equation. (4)
Oil has already surged to triple digit pricing, threatening $120/bbl once again after a couple months of consolidation. This introduces fresh urgency for climate enthusiasts and economic policymakers alike. It incentivizes the green energy revolution through market dynamics and paints a path for stocks with ties to the space.
But that space isn’t just about alternative energy companies. Key here are energy grid innovators, solar plays, and even cryptocurrency stocks, as we shall see below.
NextEra Energy Inc. (NYSE:NEE) is an electric power and energy infrastructure company. It operates through its FPL and NEER segments.
The FPL segment engages primarily in the generation, transmission, distribution, and sale of electric energy in Florida. The NEER segment produces electricity from clean and renewable sources, including wind and solar. It provides full energy and capacity requirements services, engages in power and gas marketing and trading activities, participates in natural gas production and pipeline infrastructure development, and owns a retail electricity provider.
NextEra Energy Inc. (NYSE:NEE) recently issued the following statement regarding today’s announcement on solar tariffs.
“The Biden administration’s announcement of a two-year pause on new solar tariffs is an important step to help the solar industry recover from the uncertainty of the last three months. I want to thank the administration for recognizing the challenges that trade uncertainty presents to our industry and the country and for taking this important action. NextEra Energy has and will continue to use our industry leadership to support more U.S. solar manufacturing. We look forward to working with the administration on this effort and putting hard working Americans back to work in the solar industry.” (5)
If you’re long this stock, then you’re liking how the stock has responded to the announcement. NEE shares have been moving higher over the past week overall, pushing about 4% to the upside on above average trading volume.
NextEra Energy Inc. (NYSE:NEE) managed to rope in revenues totaling $6.8B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 56.9%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.5B against $22.4B, respectively). (6)
BlockQuarry Corp. (OTC US:BLQC) is a good example of how the sustainability revolution is penetrating other key growth industries. BLQC is a rapidly growing cryptocurrency hosting and mining name that has its sights on becoming one of the largest and most successful in the US. But the company has also signaled it is committed to powering that growth through sustainable green technology.
The company also has an interesting hybrid model that makes it less vulnerable to drops in the price of cryptocurrencies given its contractual exposure to other major mining partners and its hosting agreements. BLQC is a growing self-mining firm. But the company has also partnered with some of the top players in the space and has been expanding its hosting model rapidly over recent months, suggesting that topline growth may not be impacted all that much by the nosedive in crypto prices. That could make it more attractive to growth investors concerned about the volatility in the bitcoin space as well as investors focused on sustainability.
BlockQuarry Corp. (OTC US:BLQC) recently updated shareholders with the company’s financial and operational performance highlights for the twelve months ended December 31, 2021, as well as the full launch of the Company’s Phase One 20MW hosting infrastructure at its Southeast U.S. cryptocurrency mining site, which will drive approximately $9.5 million in annual revenues going forward.
“2021 was a breakthrough year for the Company, and the investments we made during that period are already starting to pay big dividends as we begin to collect on the implementation of our Phase One hosting infrastructure,” noted Alonzo Pierce, President and Chair of BlockQuarry. “The topline exploded higher last year, and the bottom line is set to swing in our favor sharply as we get past our major fixed costs.”
Revs were up 1,643% on a year-over-year basis, cash increased 540% year over year, total assets increased 5,965% year over year to $10.8 million, and total net income was $3.55M, improving from a loss of ($26M) in 2020 – a rather astounding shift in one year. According to company materials, the phase one buildout and launch is now fully in place and operational, and its phase two project is about to get underway, which will reportedly see it double its hosting business, driving another nearly $10 million in annualized sales.
As noted in the company’s release, BLQC has put in place several agreements – in partnership with Bit5ive and Bitmain Technologies – with the potential to create enormous shareholder value over a long-term time horizon, including the Company’s hosting agreements, which guarantee significant steady cash flows irrespective of changes in the price of Bitcoin.
BlockQuarry Corp. (OTC US:BLQC) President Pierce added, “2021 was a year of critical investments that are set to start paying this year and over coming years. And, given our hybrid model, we aren’t dependent upon the day to day oscillations in the price of Bitcoin. Phase Two implementation is next up!” (7)
Enphase Energy Inc. (Nasdaq:ENPH) bills itself as a company that engages in the design, development, manufacture and sale of micro inverter systems for the solar photovoltaic industry.
Its products include IQ 7 Microinverter Series, IQ Battery, IQ Envoy, IQ Microinverter Accessories, IQ Envoy Accessories and Enlighten & Apps.
Enphase Energy Inc. (Nasdaq:ENPH) recently announced that a growing number of Australian solar installers are now exclusively offering Enphase® products, as increased solar safety regulations and compliance standards come into effect across the country.
“We are well known in the industry for testing solar system components to destruction before we include them in our designs, which is an important factor in our decision to drop DC string solar systems and exclusively offer Enphase technology,” said John Inglis, founder at Positronic Solar, an Enphase Platinum installer. “Our extensive experience witnessing the advantages Enphase systems offer our customers makes its microinverters a fundamental part of our uncompromising commitment to solar quality and safety.” (8)
We’ve witnessed 25% added to share values of the name over the past month of action. This is emblematic of the stock. ENPH has evidenced sudden upward volatility on many prior occasions. Furthermore, the company has seen interest climb, with an increase in recent trading volume of 3% above the average volume levels in play in this stock over the longer term.
Enphase Energy Inc. (Nasdaq:ENPH) has a significant war chest ($1.1B) of cash on the books, which compares with about $453.8M in total current liabilities. One should also note that debt has been growing over recent quarters. ENPH is pulling in trailing 12-month revenues of $1.5B. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 46.2%. (9)
Other key players in the sustainability space include First Solar Inc. (Nasdaq:FSLR), SunRun Inc. (Nasdaq:RUN), General Electric Co. (NYSE:GE), Tesla Inc. (Nasdaq:TSLA), and Stem Inc. (NYSE:STEM).
References
- https://www.business-standard.com/article/international/wall-street-slides-as-higher-bond-yields-hit-growth-stocks-nasdaq-down-2-122050901090_1.html
- https://www.forbes.com/2009/02/23/contrarian-markets-boeing-personal-finance_investopedia.html
- https://www.bloomberg.com/news/articles/2021-12-22/why-green-stocks-are-falling-despite-the-esg-boom
- https://www.forbes.com/sites/sergeiklebnikov/2022/02/25/russias-invasion-of-ukraine-has-sent-energy-prices-soaring-heres-how-high-oil-could-rise/
- https://finance.yahoo.com/news/statement-nextera-energy-inc-president-140000664.html
- https://www.marketwatch.com/investing/stock/nee?mod=search_symbol
- https://www.otcmarkets.com/stock/BLQC/news/BlockQuarry-Completes-Phase-One-20MW-Launch-5600-Miners-Now-Online-Driving-95M-Annualized-Revs-2021-Audited-Financials-F?id=353592
- https://finance.yahoo.com/news/enphase-energy-installers-australia-expand-120000938.html
- https://www.marketwatch.com/investing/stock/enph?mod=search_symbol
