Renewable energy stocks soared in 2020, but they have struggled so far in 2021.
For some companies, their stock prices may have shot past reasonable levels, and caused investors to rethink their bullishness. But analysts are starting to warm to renewables again, and the industry could be helped by the Biden administration’s plans to subsidize clean energy projects.
To find beaten-down stocks that trade in the U.S. and offer investors exposure to renewable energy, Barron’s looked at the components of the First Trust Nasdaq Clean Edge Green Energy Index exchange-traded fund (QCLN), which tracks U.S-listed companies in the clean energy space. The ETF is down 3.4% this year, but some components have fallen much more. We screened for the worst performers, as long as they were still expected to post big sales growth this year. The companies in the screen are expected to grow sales by at least 20% this year over 2020.
These Stocks Need a Renewal
Clean energy stocks have struggled this year. These five have had it worse than others.
Source: Factset
It’s important to note that all of these stocks — aside from Array Technologies (ARRY), which went public in October — more than doubled in 2020, so the latest drop may simply be a cooling off.
Array produces equipment for utility-scale solar projects that allows those panels to track the sun, moving them into optimal positions throughout the day. Its products are in high demand as utility companies are adding more solar energy around the country, in part to comply with state mandates.
JinkoSolar (JKS) is a Chinese company that has been ranked as the largest producer of solar panels in the world. Chinese panel-makers have dominated the global market, but their profitability has been hurt by consistently falling prices, and some face political risks.
Azure Power Global (AZRE) is an Indian company that develops and operates solar power plants. It sells electricity to utilities and commercial customers.
Both Sunnova Energy International (NOVA) and Sunrun (RUN) are installers and developers of solar panels that help homeowners and others place panels on their roofs and finance those panels. Both companies have been consolidating the fragmented market in the past year, buying up other players.
Sunrun is the largest player in the market, expanding its lead after buying Vivint Solar last year. Sunnova boasted of a 57% customer growth rate in 2020, despite the challenges posed by Covid-19.
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