The MarketWatch News Department was not involved in the creation of this content.
Feb 07, 2023 (WallStreetPR via Comtex) —
The future isn’t certain, especially where the stock market is concerned. But investors with a real plan have the opportunity to build portfolio exposure around long-term prime growth themes if they are willing to be disciplined and determined.
Over the next decade, one of the most important such themes will be what we might call “the energy trap”. This is the idea that we all know we are transitioning away from fossil fuels over coming years. We have known this for the past 15 years. During that period, investors steered capital away from new fossil fuel production capacity because it represents the past. And capital flows toward the future.
However, at the same time, we haven’t come anywhere close to non-carbon alternatives capable of taking up all that slack. Hence, we may be moving toward a rocky transition where energy is increasingly scarce,
That’s a bad combination – no investment in new oil production, and insufficient investment in alternatives.
We are collectively driving toward the edge of a cliff. It’s just a matter of time before we have a crisis on our hands. However, we still have plenty of time to course correct. And, historically, when the human race is driving toward a crisis but still has plenty of time to course correct, we usually end up making the right moves.
This is a paradigm-shift moment. A defining shift. One that comes along less than once in a generation for investors. And it is just that type of scenario that redistributes the world’s wealth based on who picks the right target for invested capital and who doesn’t.
According to Sultan Al Jaber, chief executive officer of Abu Dhabi National Oil Co., “the world’s failure to invest enough in fossil fuels before cleaner alternatives can fully meet today’s energy needs is a ‘recipe for disaster.'”
In other words, we are caught between a rampant underinvestment in fossil fuel production over the past decade and a massive pool of capital ready to pour into more scalable clean energy solutions.
So, who are the prime candidates to benefit from these twin drivers? We take a look a few of the most interesting stocks positioned to capture this opportunity below.
Bloom Energy Corp. (NYSE:BE) has been a relative-strength winner during the recent bear market, oscillating around $25 per share after pricing down around $4 per share in 2020. The company engages in the manufacture and installation of on-site distributed power generators.
The company’s flagship product, Bloom Energy Server, converts standard low-pressure natural gas or biogas into electricity through an electrochemical process without combustion.
Bloom Energy Corp. (NYSE:BE) recently announced that it has teamed with Telam Partners, a leading senior advisory firm specializing in the financing and market entry of energy, infrastructure, and technology projects, to expand Bloom’s footprint into Spain and Portugal. The two companies will market and deploy the Bloom Electrolyzer, as well as Bloom’s Energy Servers, supporting customers with solutions that can efficiently meet their energy security needs and green hydrogen demand.
“Business and political leaders are looking for clean technologies and energy solutions,” said Tim Schweikert, Senior Managing Director of International Business Development, Bloom Energy Inc. “Bloom is now engaged to address these priorities in Spain and Portugal. Telam is a partner of choice, supporting Bloom’s long-term commitment to the Iberian Peninsula and to respond promptly to green transition policies and environmental imperatives.”
Even in light of this news, BE hasn’t really done much of anything over the past week, with shares logging no net movement over that period.
Bloom Energy Corp. (NYSE:BE) managed to rope in revenues totaling $292.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top-line growth of 41%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($534.2M against $392.7M).
Clean Vision Corp. (OTC US:CLNV) is the most speculative play we will cover today, trading on a market cap of just around $25 million. It’s on the OTC. But this one shouldn’t be overlooked because it’s a new animal in the jungle, and it has a lane toward a possible winner-take-all position in an emerging clean energy thesis.
The growth bet for CLNV right now has to do with its Clean-Seas subsidiary. Clean-Seas engages in pyrolysis waste-plastic conversion technology – it takes plastics out of the environment and turns them into a range of useful substances in the energy industry. And the key to this story is all about scale – the path for waste plastic as a major source of energy over coming decades is established. But no one has put together the infrastructure to monetize that thesis until CLNV. Based on recent moves, the horse could be about to leave the barn.
Clean Vision Corp. (OTC US:CLNV) recently announced that its wholly owned subsidiary, Clean-Seas, entered into a definitive agreement to acquire 51 percent (51%) of Agadir, Morocco-based Ecosynergie Group. The Agreement follows the companies’ execution of a binding term sheet to jointly develop a commercial-scale pyrolysis facility that was previously announced on April 4, 2022. The deal stands to set up Clean-Seas with a new operation in Morocco turning waste plastic into valuable energy goods.
Among those outputs will be CLNV’s proprietary AquaH clean hydrogen fuel.
Commenting on the transaction, Mohammed El Abbassi, ESG Director and General Manager, said, “Our team believes this transaction is a big win for Morocco and for everyone involved. Combined with the Clean-Seas team and its capital commitment, we anticipate having the resources needed to reduce waste-plastic economically and profitably, while creating jobs and producing clean fuels to help offset higher energy prices.”
Clean Vision Corp. (OTC US:CLNV) CRO, Dan Harris, added, “This transaction is a terrific start to 2023, and we couldn’t be happier with our partners in Morocco. Everyone involved with this project is committed to its success, not just financially but for the positive impact it will have on the environment and the local community.”
CLNV is playing a new game. Despite its cheap market cap, the company appears to be surging toward a dominant position in the sustainable energy space. We would expect an increasing pace of catalysts for this name over coming months given its foundation and value proposition. In other words, this is a cheap stock with big plans, little direct competition, and valuable IP, so it should be worth a look.
Clean Energy Fuels Corp. (Nasdaq:CLNE) bills itself as “the largest provider of the cleanest fuel for the transportation market.” The company engages in the provision of natural gas as an alternative fuel for vehicle fleets in the United States and Canada.
It also builds and operates compressed natural gas (CNG) and liquefied natural gas (LNG) vehicle fueling stations, manufactures CNG and LNG equipment and technologies, and delivers CNG and LNG vehicle fuel.
Clean Energy Fuels Corp. (Nasdaq:CLNE) recently announced that it has been awarded a contract by San Diego Metropolitan Transit System (MTS), to provide an expected 86 million gallons of renewable natural gas (RNG) to operate its bus fleet. Filamar Energy Services signed an agreement with Clean Energy for an anticipated 4.2 million gallons of natural gas to power a fleet of more than 50 heavy-duty trucks. (Photo: Business Wire)
“San Diego MTS was an early adopter of natural gas in the 1990s and has continued to seek cleaner and more economical fueling options,” said Clean Energy Senior Vice President Chad Lindholm. “As a result of the use of RNG the people who live in the San Diego area will have less exposure to greenhouse gas emissions and cleaner air.”
“RNG is a great example of how we can use innovation and technology to create a cleaner and more sustainable environment,” said MTS Chief Executive Officer Sharon Cooney. “The use of RNG is an important strategy for MTS while we work toward achieving our goal of zero emissions. This contract with Clean Energy will play key role as MTS continues transitioning to a more eco-friendly transit system.”
Traders will note 6% added to share values of the company over the past month of action. This is emblematic of the stock. CLNE has evidenced sudden upward volatility on many prior occasions. Moreover, the name has benefitted from a jump in recent trading volume to the tune of 24% beyond what we have been seeing over the larger time frame.
Clean Energy Fuels Corp. (Nasdaq:CLNE) has a significant war chest ($134.1M) of cash on the books, which compares with about $134.1M in total current liabilities. One should also note that debt has been growing over recent quarters. CLNE is pulling in trailing 12-month revenues of $404.8M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 46.4%.
Other key names in the space include Tesla Inc. (Nasdaq:TSLA), CleanSpark Inc. (Nasdaq:CLSK), FuelCell Energy Inc. (Nasdaq:FCEL), Plug Power Inc. (Nasdaq:PLUG), and Brookfield Renewable Partners L.P. (NYSE:BEP).
The MarketWatch News Department was not involved in the creation of this content.