Here are the numbers.  I hope to write some market commentary to go with them soon.

Disclosure: Long all the stocks in the 10 Clean Energy Stocks model portfolio.

The post Ten Clean Energy Stocks of 2022/3 – July Returns appeared first on Alternative Energy Stocks.

By Tom Konrad, Ph.D., CFA

With the launch of my (green dividend income focused) hedge fund early this year, I had to take a hiatus from publishing my annual list of 10 Clean Energy Stocks that I feel will do well in the coming year.  Since my duty to clients takes precedence over readers, I could not tell people about stocks I liked before buying them for the fund.

As we complete the first half of the year, the fund is now largely invested, although I am still keeping some buying power back in anticipation that the overall market could easily fall further, leading to even better opportunities than we see today.  

Since I’m not actively buying in the fund, I am now free to share my top picks with the public.  Like everything in my hedge fund, these are all companies that, in my judgment, reduce the fossil fuel use, carbon emissions, or other pollution in the overall economy by operating and expanding their businesses.

I probably won’t be able to publish monthly updates to this list as I have in the past.  If I am actively buying any one of these stocks, I will not be writing about it, and I will not want to tip my hand by writing about the others while just omitting one or two.  But I plan to publish intermittent updates on the whole list when I can, and will do a recap in July 2023 to look at how the list did in the past year and why.

Valuation and Timing

The recent declines of the stock market are finally giving us decent valuations, better than anything we’ve seen since the short-lived market bottom in early 2020.  That’s not to say that the market will not fall further, but it’s likely that many individual stocks are currently seeing their lows. 

Whenever I see a stock I like trading at a good valuation, I buy some.  If it falls further because of a continued general market decline (as opposed to bad news at the company itself), I buy more. These ten stocks have all reached the “buy more” stage.  If the market keeps falling, I’ll soon be ready to invest everything I can, and even start using uncovered short puts to take on a bit of leverage.

10 Clean Energy Stocks for 2022-2023: The List

By Tom Konrad, Ph.D., CFA

Ten Green Stocks I expect to do well over the next year (7/1/2022 to 6/30/2023)

Prices are as of the close on 6/30/2022.  1€ = $1.0482, $1 = 7.0972 DKK = C$1.2876 

Clean Transportation Stocks

• MiX Telematics (NASD:MIXT – $8.14) – A provider of vehicle tracking and telematics to large international vehicle fleets.  The company is green because it both reduces accidents and fuel usage for its customers.
• Valeo, SA (FR.PA – €18.42 or US ADR: VLEEY or US foreign stock ticker: VLEEF) – a provider of electrified drive trains, sensors, and comfort systems for the automotive industry.
• NFI Industries (NFI.TO C$13.39 or US foreign stock ticker: NFYEF) – A leading international bus and motorcoach manufacturer selling a large and growing number of electrified vehicles.  N

Green Building Stocks

Rockwool A/S (ROCK-B.CO 1597.50 DKK and ROCK-A.CO or US foreign stock ticker: RKWBF) – a manufacturer of fire and mold resistant building insulation.

Hannon Armstrong Sustainable Infrastructure (NASD:HASI) – A financier of solar, wind, biogas, and energy efficiency installations.

Green Municipal Infrastructure Stock

Veolia (VIE.PA €23.29 or US ADR: VEOEY or US foreign stock ticker: VEOEF) – A large international developer and operator of municipal infrastructure such as water, wastewater, recycling, and environmental remediation.

Biofuel Stock

Enviva, Inc (EVA $57.22) – A vertically integrated wood pellet supplier to European and Japanese markets, where they mostly displace coal in electricity generation.

Recycling Stock

Umicore, SA (UMI.BR €33.32 or US ADR: UMICY or US foreign stock ticker: UMICF) – A vertically integrated recycler of hard-to-recycle and specialty metals used in clean energy industries such as batteries, solar, wind, and catalytic converters.

Green Electricity (Yieldcos)

Avangrid (NYSE: AGR $46.12) – one of the top producers and developers of renewable electricity in the United States.  

Atlantica Sustainable Infrastructure (NASD: AY $32.26) – an international owner and developer of renewable energy, efficient natural gas, electric transmission line and water assets.

DISCLOSURE: Long all stocks in the 10 Clean Energy Stocks for 2022/23 portfolio.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post 10 Clean Energy Stocks for 2022-2023: The List appeared first on Alternative Energy Stocks.

By Tom Konrad, Ph.D., CFA

With the launch of my (green dividend income focused) hedge fund early this year, I had to take a hiatus from publishing my annual list of 10 Clean Energy Stocks that I feel will do well in the coming year.  Since my duty to clients takes precedence over readers, I could not tell people about stocks I liked before buying them for the fund.

As we complete the first half of the year, the fund is now largely invested, although I am still keeping some buying power back in anticipation that the overall market could easily fall further, leading to even better opportunities than we see today.

Since I’m not actively buying in the fund, I am now free to share my top picks with the public.  Like everything in my hedge fund, these are all companies that, in my judgment, reduce the fossil fuel use, carbon emissions, or other pollution in the overall economy by operating and expanding their businesses.

I probably won’t be able to publish monthly updates to this list as I have in the past.  If I am actively buying any one of these stocks, I will not be writing about it, and I will not want to tip my hand by writing about the others while just omitting one or two.  But I plan to publish intermittent updates on the whole list when I can, and will do a recap in July 2023 to look at how the list did in the past year and why.

I will publish the list on AltEnergyStocks.com on July 1st.  Supporters can see a preview on my Patreon page.

The post Restarting 10 Clean Energy Stocks Series appeared first on Alternative Energy Stocks.

By Tom Konrad, Ph.D., CFA

The Ten Clean Energy Stocks for 2021 model portfolio had a decent year.  With a 13.2% total return, it handily beat its clean energy income stock benchmark, the Global X Renewable Energy Producers ETF (RNRG, formerly YLCO), which fell 12.1%.  It did not, however, compare as well to the wider universe of income stocks, which had an excellent year, with its benchmark SDY up 27.2%.

The poor performance of clean energy stocks in 2021 was largely due to the bursting of a clean energy bubble which formed in the second half of 2020 fueled by speculation about and then the reality of a pro-climate Democrat in the White House.  

Although Biden and the Democrats in Congress are pushing things in the right direction (a complete and welcome reversal from Trump and the Republicans), the ability of both parties to make meaningful change is usually overestimated by investors around an election.  This led to inevitable disappointment and the deflation of the clean energy stock bubble of late 2020.

I started the year cautious about this bubble, and mostly picked stocks which had participated less in the late-2020 rally, but might still be able to benefit from the additional money sloshing around in the space.  This led to the model portfolio’s decent gains, although I was not able to overcome the headwinds.

Individual stock gains from expected refinancing at Green Plains Partners (GPP) and an unsurprising buyout of undervalued Covanta Holding (CVA) more than offset a bad call at Eneti (NETI) where I expected management to be better stewards of shareholder capital than they turned out to be.  Their relentless pursuit of expansion plans led to an ill-timed and dilutive secondary offering of shares in November.

2022 

I am not going to be publishing a Ten Clean Energy Stocks list for 2022.  Because I am launching a hedge fund with Investment Research Partners, and I will need to be investing new funds as they come into the fund, it would not be fair to hedge fund investors to share my best ideas with readers at the same time I am investing their funds.

If I were to share those picks, they would be focused on those clean energy stocks which have suffered the worst from the bursting of the bubble.  However, I would retain a cautious stance overall, because I continue to think the broad market is overvalued.  A new bear market would hurt the clean energy sector, even those stocks which fell significantly in 2021.

I will continue writing, but my stock commentary may be a bit less timely, and I will emphasize investing strategy a bit more.

If I had to be optimistic about a sector, it would be clean transportation.  The supply chain disruptions of the last two years have hurt the whole auto sector badly, and the recovery, when it eventually comes, could lead to impressive rebound in both profitability and stock prices.

DISCLOSURE: Long all stocks in the 10 Clean Energy Stocks for 2021 portfolio.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post 10 Clean Energy Stocks for 2021: Wrap Up appeared first on Alternative Energy Stocks.

By Tom Konrad, Ph.D., CFA

Monthly Performance

Returns for the Ten Clean Energy Stocks for 2021 model portfolio are shown below.  It was a good month for clean energy stocks as well as the broader stock market, with the portfolio up 4% for a 20% total return through the end of October.  Its clean energy benchmark (RNRG) was up more (8%) but is still down 6% for the year.  Its broad market benchmark (SDY) rose 5% and has caught up with the model portfolio at a 20% return year to date.

Earnings

Third quarter earnings season has started.  Below are some notes I’ve shared with my Patreon supporters over the past couple weeks:

MiX Telematics Earnings

MiX Telematics (MIXT) was down on earnings today.  I’d call it a case of decent earnings… the company continues to grow revenue and subscriptions quarter over quarter and year over year, but they are still a long way from 2019 levels.

Oil and gas customers still account for most of the shortfall, with most of the customer wins highlighted in the earnings call being transit, mostly bus fleets.  They did say that one big oil and gas customer is starting to bring some of its vehicles back into service.

Overall, the quarterly performance was decent, but investors were probably hoping for more of a bounce given the subscribers lost in 2020.  If anything, the long term outlook is improving, so the recent declines make MiX one of the few stocks in which I see value in the current market.

Green Plains Partners Earnings

The big news in Green Plains Partners’ (GPP) third quarter earnings wasn’t news at all.  The distribution increase for $0.435 quarterly which had been announced in mid-October, and the company had told us to expect the increase in August when I wrote: “I expect the board of directors to raise the dividend to between $0.40 and $0.45 next quarter.”

The stock jumped anyway, and now trades around $15.  Given its current 11.2% yield, I think a modest ($1 to $2) further increase over the coming months is likely. 

Enviva Earnings

Note: Enviva is not in the current 10 Clean Energy Stocks list, but made an appearance in 2019 and I thought the news was notable enough to make it worth writing about.

I had two major take-aways from wood pellet MLP  Enviva’s (EVA) 3rd quarter earnings.  

First, the previously announced simplification transaction where the partnership has bought out and absorbed its general partner and is converting to a corporate structure should be great for the stock price.

The company is guiding for $3.62 of total dividend payments in 2022.  After the shift to a corporate structure, EVA should start trading with a yield more in line with its Yieldco peers, around 3 to 5 percent.  So we can expect a share price a year from now to be in the $72 to $120 range.  With the current share price at $68, I’m fairly bullish.

The other take-away is that the company is moving into new markets with the announcement of a long term wood pellet supply contract to a European producer of aviation biofuel.  This is important because its largest current market, which is selling to power producers who burn the pellets in converted coal power plants has long term limitations.   

First, using wood pellets to generate electricity is not the highest use for a a renewable fuel source which is easy to transport and store.  These are two advantages notably lacking in the leading renewable energy sources, electricity from solar and wind.  Given the size and weight of batteries needed, it is very difficult to electrify long distance aviation.  As we transition the world away from fossil fuels, we need to find renewable energy sources for every application.  Sustainable aviation fuel is one where solar and wind will find it difficult to compete, so this is a good long term market for Enviva’s biomass.

Other applications which will be difficult to serve with electricity from solar and wind are industrial processes such as steel and cement production, and the 10 to 20 percent of electricity which needs to be served by long term seasonal storage to meet demand that cannot be easily served with wind and solar.  Enviva is also exploring contracts with industrial customers looking to decarbonize.  

This new contract demonstrates that Enviva has scalable prospects for participating the sustainable energy economy for the long term, even when its current role as a bridge fuel to make use of the existing infrastructure in converted coal plants comes to an end.

DISCLOSURE: Long all stocks in the 10 Clean Energy Stocks for 2021 portfolio and EVA.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post 10 Clean Energy Stocks for 2021: November. Notes on MIXT, GPP, EVA appeared first on Alternative Energy Stocks.

By Tom Konrad, Ph.D., CFA

The risks of playing politics

The American news media often tries too hard to be “balanced” when talking about politics.

Depending on which news sources you rely on, you may be hearing that “congress” is having trouble passing bills to fund the government and raise the debt ceiling. More partisan sources will be blaming it on the Democrats or the Republicans, depending on their political bent.

I generally consider myself an independent who cares deeply about the environment and competent government. Since the rise of Donald Trump, the Republicans have shifted from being the party of big business (often anti-environment) to the party of big fossil fuels and corruption. Where I used to be mostly aligned with Democrats because of their pro-environmental stance, the recent shift from conservative political positions to the disinformation fueled corruption and pursuit of power for its own sake of Trump and those who follow his lead, I (now) have no choice but to take the opposing position. And because I feel that much of the mainstream media is focused on trying to be “balanced” at the expense of telling it like it is, I’m going to tell it like I believe it is:

Because Republican leaders (especially Mitch McConnell in the Senate) are more interested in scoring political points than making sure that America avoids financial disaster by raising the debt ceiling, the market is starting to look wobbly. Using the filibuster, Senate Republicans are even blocking a simple up or down vote on raising the debt ceiling- one which would need no Republican votes to pass- and are instead trying to force the Democrats to raise the debt ceiling through reconciliation. Even if the Democrats manage to avoid the filibuster by raising the debt ceiling through reconciliation, the delay is already doing damage to investor confidence and the economy.

Not raising the debt ceiling would be like me refusing to make the minimum payment on a credit card balance that I had run up because I suddenly decided I didn’t like credit card debt. It’s fine not to like credit card debt but the way to avoid credit card debt is to pay it off or avoid spending the money in the first place- not by refusing to pay the bill when it comes due. Even if I can pay and eventually do, my credit score and ability to get loans would be damaged for years.

McConnell and other Republicans in the Senate have decided that they want to be able to score political points by blaming Democrats for raising the debt ceiling, rather than voting to do the responsible thing for the country. They certainly did not have any problem adding to the credit card bill by passing giant tax cuts when they controlled the government, while Senate Democrats did the responsible thing by supporting Republican efforts to raise the debt ceiling the last time it came up for a vote. But Republicans would rather score political points than vote to pay the debt that they ran up – or even allow the Democrats to have that vote on the Senate floor.

Stock market consequences

We can see the harm caused so far in the 5% declines of my 10 Clean Energy Stocks model portfolio and its benchmarks in September:

A real bear market will look much worse.

The political standoff over the debt ceiling could easily be the event that ends the current bull market. With the Federal Reserve reducing its stimulus to the economy, and the Delta variant rampant in more rural parts of the country due to low vaccination rates, I find it surprising that the market remains as strong as it does.

The Democrats will almost certainly eventually raise the debt ceiling, but only after considerable economic damage has been done. This is a certainty, since that damage has already started, and barring a reversal by McConnell, it is likely to continue for weeks if not months.

I’ve been cautioning my readers to be prepared for a market downturn for almost a year now, so if we enter a bear market, my readers and I will probably be fine. Those of us who are prepared may even scoop up some stock market bargains at discounted prices.

This potential opportunity to shop a stock market sale and the Republicans scoring a few political points is simply not worth creating a crisis that simply did not need to happen.

If the Democrats are forced to raise the debt limit by reconciliation, I hope they take the process one step further and remove the debt ceiling altogether. These periodic artificial debt ceiling crises are bad for the economy, and one more barrier to the ineffectual congress actually getting something useful done for a change.

DISCLOSURE: Long all stocks in the 10 Clean Energy Stocks for 2021 portfolio.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results. This article contains the current opinions of the author and such opinions are subject to change without notice. This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post Will McConnell Kill The Bull Market? appeared first on Alternative Energy Stocks.

Here’s the performance through August for the 10 Clean Energy Stocks for 2021 model portfolio…  The market has turned down a bit since then but the relative performance has not changed significantly.  The model portfolio is still well ahead of its benchmarks., both clean energy (RNRG) and broad market (SDY).I don’t know if this recent downturn is just a blip, or the start of the possible larger decline I’ve been worrying about.  But I’m prepared if it’s the latter.

DISCLOSURE: Long positions all the stocks in the model portfolio.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post 10 Clean Energy Stocks Performance Chart appeared first on Alternative Energy Stocks.

By Tom Konrad, Ph.D., CFA

Even as the broad market rose, the start of 2021 was brutal for clean energy stocks. The sector experienced a bubble in late 2020 and January this year as optimism grew that we finally had a President who understands the magnitude of the climate problem and has committed to do something about it. The bubble also grew from the great hope that with the presidency and slim majorities in both houses of congress, he would actually be able to get his agenda through.

That might have happened if the Senate Republicans were interested in governing and solving this country’s problems, or if the Democrats majority did not depend on a coal state Democrat like Joe Manchin, who takes regular meetings with fossil fuel lobbyists.

With climate, renewable energy, and social infrastructure stripped out of the slim bipartisan infrastructure deal, action on climate depends on getting them into a reconciliation deal which Senate democrats would pass without any Republican votes.  That means this bill would need the vote of every Senate Democrat, including Manchin and Kristen Sinema.  

This leaves a large investment in climate infrastructure between a rock and a hard place. Progressive Democrats in the House (rightly, in my opinion) are making their support for the bipartisan traditional infrastructure package recently agreed by Joe Biden and five moderate senators from each party contingent on getting a strong reconciliation bill which includes climate action.  But any such bill will have to get every Democratic vote in the Senate, which gives Manchin and other conservative Democrats a veto on any part of it.

There is still a good chance that such a reconciliation bill will pass, but January’s euphoria is rightfully gone.

Reasons for Bottom

When things are darkest, and investors are looking for reasons to be pessimistic rather than reasons to hope is the best time to buy.  Clean energy stock ETFs like PBW and RNRG seem to have found bottom in May.  Biden is still making progress on climate with executive actions despite the congressional deadlock. Local and international governments are also not sitting idle waiting on the dysfunctional US congress.  Further, economics are now on the side of renewable energy:

• In many places, it now costs less to build new solar plants than to run existing coal plants to produce electricity
• It costs less to build and operate an all-electric home than one that uses fossil fuels in most parts of the US.
• Wind, solar, electric and batteries are continue to fall in price, making these already competitive technologies the most cost-effective option in more and more situations.

On top of all that, we still may see significant spending on climate out of a reconciliation bill this fall.

Conditions feel right for clean energy stocks to resume their upward trend.  That assumes, of course, that the market as a whole remains stable.  

10 Clean Energy Stocks For 2021

Below are the first half 2021 returns for the Ten Clean Energy Stocks model portfolio.  I feel Eneti (NETI) and Valeo (FR.PA, VLEEF, VLEEY) are particularly attractive right now. 

DISCLOSURE: Long all stocks in the 10 Clean Energy Stocks for 2021 portfolio, including NETI and VLEEF.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post Finding a Bottom and Model Portfolio First Half Returns appeared first on Alternative Energy Stocks.

By Tom Konrad, Ph.D., CFA

Here are two more updates from last week on Patreon.  Also, I realize I neglected to publish the monthly performance chart for my 10 Clean Energy Stocks model portfolio here at the start of the month, so here it is as well:

Atlantica Sustainable Infrastructure Earnings

(published May 11th)

Atlantica Sustainable Infrastructure (AY) released its first quarter earnings announcement and financial statements on May 6th.

Atlantica is one of the higher yielding Yieldcos, 5.3% at the new quarterly dividend rate of $0.43 and a $32.50 stock price.  The dividend is safe, since most of Atlantica’s debt is fixed rate, non-recourse project debt which will be paid off before the project Power Purchase agreements expire.  

In addition to paying down debt, the company has also been investing in new projects, most recently a 49% stake in a 596 MW collection of 4 wind projects in Illinois, Texas, Oregon and Minnesota.  This has been financed by a well-timed issue of new equity in December, while the stock was trading at elevated levels with most other clean energy companies.  

The stock decline since then is getting me interested, and I have started selling out of the money cash-covered put to add to my current position.

Hannon Armstrong Selling Off Today- I’m Buying

(published May 12th)

This is going to be brief, but I wanted to give subscribers a heads-up.  Hannon Armstrong (HASI) is a unique REIT financing in renewable energy and energy efficiency.  Its investments typically are relatively senior (that is, they take losses last), making them safer than the typical equity investments of your average Yieldco.

Given the exposure to energy efficiency (a very difficult clean energy asset class to invest in), and the safety of its investments, HASI deserves to be in every clean energy income portfolio.  For the last few years, however, it has been selling at a large premium to the Yieldcos, so I’ve been slowly whittling down my stake.

The sell-off today (seemingly on inflation fears) looks like a great opportunity to buy some of that back (or, in my case, sell cash covered puts.)

Clearway Class A (CWEN-A) and Atlantica (AY) are also starting to look attractive.

DISCLOSURE: Long HASI, AY, CWEN-A.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post Atlantica Q1, Buying Hannon Armstrong appeared first on Alternative Energy Stocks.

By Tom Konrad, Ph.D., CFA

You don’t have to own mining companies to benefit from rising metals prices.

This is a roundup of first quarter earnings notes shared with my Patreon supporters over the last week. Waste to energy operator Covanta and specialty metals recycler Umicore are both benefiting from skyrocketing metals prices.

Just as renewable energy and energy efficiency stocks have long shown that investors don’t have to own fossil fuel companies to benefit from rising prices of fossil fuels, recyclers like Covanta and Umicore are showing that you don’t have to own environmentally damaging mining companies to benefit from rising metals prices.

Covanta Earnings

Everyone could find something to like in last week’s first quarter earnings at Covanta (CVA).  

Revenue and income all showed strong growth over the prior year.  This was driven by strong pricing trends in metals, waste disposal (“tip”) fees, and energy prices.  These gains were achieved despite higher planned outages for maintenance in 2021 compared to the prior year.  This will reduce the need for additional maintenance outages later in the year.

In addition, the company increased its guidance for the full year, and expects further improvements to come from the strategic review as it renegotiates contracts or closes unprofitable operations.  It seems likely that many of these renegotiations will come at the 19 municipally owned plants in the US that it operates under contract.  The company also anticipates significant savings from overhead.

In short, everything is coming up roses.

• The company is performing well
• The macroeconomic environment is favorable
• New plants will be coming online over the next 3 years in the profitable UK market
• Additional savings are expected from the strategic review.

Covanta is definitely a stock to hold even in this relatively overvalued market.

Umicore and Hydrogen

Umicore (UMICF, UMICY, UMI.BR) released its first quarter update as well as a presentation on its positioning in the hydrogen economy in late April.  

In the business update, they’re driving with fully charged batteries:

• Metals, and especially the precious metals, prices are soaring, boosting their recycling business (which also increased its volumes)
• Automotive production is recovering, helping their catalysis business.  The shift away from light duty diesel vehicles is also helping them increase market share.

Umicore currently expects its 2021 earnings to slightly exceed the guidance released just in February.

Hydrogen

With much talk of the hydrogen economy, especially in Europe, Umicore released a timely presentation on how they have and expect to participate.  The company already has a strong position as a supplier of catalysts for the PEM fuel cells used in Fuel Cell Vehicles (FCVs), and have won a number of supply contracts for future fuel cell vehicle platforms.  As of 2020, Hyundai Motor has produced 6,781 Fuel Cell Vehicles using Umicore as a supplier.

They also announced a new partnership with Anglo American Platinum (AAL.L, ANGPF, ANGPY) to develop a liquid carrier which would be used in hydrogen transportation.  They see significant long term growth potential in both this and as a supplier of catalysts to the electrolyzer market.

Conclusion

It was hard to describe Umicore as a value stock when I added it to the 10 Clean Energy Stocks list at the start of the year, and it’s even harder today, given the 30% appreciation since then, I continue to value it for the exposure it gives to the materials used in clean transportation technologies.  Other ways to get this type of exposure include mining stocks and electric vehicle companies like Tesla (TSLA).  I do not invest in mining companies because of environmental concerns, and I do not invest in “story” stocks like EV manufacturers because I like to focus on “boring” stocks that benefit from the same trends, but not everyone is talking about.

It’s much easier to get an edge in your investment analysis when you are one of the few investors paying attention.  

DISCLOSURE: Long CVA, UMICF.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post Earnings Roundup: Metals Prices Boost Covanta and Umicore appeared first on Alternative Energy Stocks.