Wind Energy in the Headlines

• U.S. Urged to Carve Out Wind, Solar Build Zones to Curb Delays (Reuters)
• Biggest Offshore Wind Farm in the U.S. Gets the Go-Ahead (Canary Media)
• Arizona’s Chevelon Butte Wind Farm Kicks Off with $267 Million Investment (KTAR News)

Wind Energy Outlook for 2023

According to Global Energy Consulting firm Wood Mackenzie, global wind energy will exceed the 1-terawatt threshold for installed capacity by year-end. One terawatt is equal to 1 trillion watts which is significant when you consider the estimated global demand for power is 17.7 terawatts.

Last month, we looked at three companies in the wind energy arena.

• Eniti, Inc. (NETI) share prices have increased from $11.45 to $129.98 since this time last month for a 13.36 percent increase month-over-month.
• Clearway Energy (CWEN) pulled back from $30 per share down to $28.11 for a decrease of 6.3% per share.
• TPI Composites, Inc. (TPIC) maker of wind turbine blades also pulled back from $12 to $10.55 for a 12.08 percent decrease in share price.

Among these 3 stocks, the clear winner is Eniti, Inc. (NETI).

NETI Daily Stock Chart (source: TradingView)

NETI has made an impressive run-up from $8 in May to $13.18 today.

Other Companies to Watch

• Vestas (OTC: VWDRY) has gapped-up from $8.50 to $9.15 over the past few days on reports of increased orders.
   
• General Electric (GE) has shown progressive growth from $64 in early January to today’s price of $111.59 for a 74.35% increase in share price over the year.

General Electric (GE) Stock Performance for 2023 YTD (Source: Tradingview)

Stay tuned to Global Investment Daily as we periodically monitor this sector.

The post Wind Energy Overview for the Second Half of 2023 appeared first on Global Investment Daily.

The debt ceiling agreement paves the way for the building of interstate transmission lines which is key to Biden’s infrastructure agenda. Specifically, it would ease the permitting process for transmission lines that would carry clean energy across the country. Once completed, a network of transmission could deliver a steady stream of clean energy from remote rural areas to densely populated urban areas.

With Green Energy projects getting green-lighted nationwide, it could be a boon for solar energy companies. Here’s a list of a few companies in play:

First Solar, Inc. (FSLR) – Since May 5, 2023 FSLR has moved up impressively from $171 to $231 per share.

Canadian Solar (CSIQ) – This stock has also made an impressive run from $35 to a high of $45 since May 16

SolarEdge Technologies, Inc. (SEDG) ran up from $260 to a high of $306 since May 3.

First Solar Daily Chart (courtesy of Tradingview)

As the debt ceiling debates moves behind us, we’ll be keeping an eye on renewable energy projects. Stay tuned.

The post What Does the Debt Ceiling Deal Mean for Solar<br>Stocks? appeared first on Global Investment Daily.

It’s a script that has played out with numerous commodities including potash, graphite, cobalt, rare earths, vanadium, and even marijuana (though not strictly a commodity).

And it’s now playing out with helium, the second-most abundant element in the Universe behind only hydrogen, yet also one of the rarest elements on our planet.

Helium’s scarcity and value stems from the fact that it’s an inert gas that does readily react with other elements or much of it generated by earth’s natural processes. It’s also 7x lighter than air and readily leaks into space and eventually gets torn away by solar winds.

Each year, our planet generates about 3,000 tons of helium through radioactive decay deep in the bowels of the earth. Unfortunately, the vast majority leaks off into space, and the little that  is trapped in the atmosphere comes nowhere close to meeting our global demand of 32,000 tons of helium per year (about 6.2 billion cubic feet measured at 70°F and under earth’s normal atmosphere). 

Indeed, the majority of our helium reserves are found in ancient shale formations. Helium is, therefore, regarded as a finite, non-renewable resource.

Yet, many investors have been sleeping on an unraveling helium boom, thanks to

explosive growth in the semiconductor and healthcare industries as well as space and quantum computing.

This rare gas is endowed with unique qualities that make it indispensable in many key applications including space exploration, rocketry, high-level scientific applications, in the medical industry for MRI scanners, fiber optics, electronics, telecommunications, superconductivity, underwater breathing, welding, cryogenic shielding, leak detection, and in lifting balloons. 

At a melting point of -261.1°C (-429°F), helium has the lowest melting point of any element, meaning there’s no substitute for the gas where ultra-low temperatures are required such as superconductors. For instance, the fastest train ever built, the SC MagLev, capable of speeds of more than 600 km per hour, uses liquid helium to cool the superconducting material, niobium‐titanium alloy, to 452 degrees Fahrenheit below zero.

According to ResearchAndMarkets, the global helium market is projected to reach US$18.2B in 2025, growing at a CAGR of 11.2% during the period 2021 to 2025 mainly driven by robust medical and consumer electronics demand. About 30% of the world’s helium supply goes into MRI scanners while another 20% goes into the manufacture of hard disks and semiconductors.

Meanwhile, Big Tech companies such as Google, Facebook, Amazon, and Netflix are heavy users of helium in their massive data centers.

With demand constantly outstripping supply and the federal government no longer freely selling helium, prices have skyrocketed, hitting $35 per liter in 2019, more than double an average of $14.60 per liter they commanded three years ago.

Helium Uses

Source: Helium One

No more helium from the Fed

The biggest chink in the helium supply chain is the fact that a large chunk of the supply is in the hands of the U.S. federal government.

Back in 1925 when helium-based airships seemed like they would become vital to national defense, the U.S. government created the Federal Helium Reserve (FHR) out of a giant, abandoned salt mine located 12 miles northwest of Amarillo, Texas. Over several decades, FHR collected as much helium as it could and essentially became the world’s strategic helium reserve supplying ~40% of the world’s needs.

Unfortunately, the FHR eventually ran into debt trouble to the tune of billions of dollars thanks to its habit of selling helium at well below market prices. In 1996, the U.S. government passed laws mandating FHR to sell off its reserves and close in 2021 in an effort to recoup its debts.

The Bureau of Land Management (BLM) has outlined the process and timeline by which the FHR will dispose of its remaining helium and helium assets.  BLM, which now manages the reserve, managed to sell off most of the stored helium to all users, with the remaining 3 billion cubic feet (84 million cubic meters) by 2018 restricted for sale to only federal users, including universities that use helium for federally sponsored research. BLM held its last Crude Helium Auction in Amarillo, Texas, in 2019 with the price rising 135%, from $119/Mcf in 2018 to $280/Mcf in 2019. 

The sale of crude helium to private industry has been discontinued and the remaining stockpile is earmarked for Federal users only.

The sale deadline has since then been extended to 30 September 2022, but  privatization likely won’t be completed until at least 2023.

There are a ton of stocks to play in this space, including giant Exxon (NYSE:XOM), which produces about 25% of the world’s helium supply at its plant in LaBarge, Wyoming. Regeneron (NASDAQ:REGN) is also poised to become a major helium player, with South Africa’s first-ever liquid helium processing technology. And plenty of small-caps form some potentially juicy new entrants to this space. 

This is one to watch. It’s not about balloons anymore. 

The post Abundant Yet Rare: The Juicy Helium Paradox appeared first on Global Investment Daily.

You really don’t have to look very far to find small caps (market capitalizations ranging from $300 million to $2 billion) that have turned into multibaggers over the years:

• EV maker Tesla Inc. (NASDAQ:TESLA) was valued at just over $1B shortly after its 2010 IPO. A  decade later and Tesla has grown into the world’s most valuable automaker with a market cap more than 200x bigger than its IPO valuation. That’s a 20,000% return for investors who bought and held through Tesla’s epic journey.
  

• Online retailing giant, Amazon Inc.(NASDAQ:AMZN) started its odyssey as an online bookseller with a share price of $1.50 in 1998. AMZN shares are now changing hands at $3,176-a-pop, or a stupendous return of 211,733% over 23 years.
  
• Video streaming juggernaut, Netflix Inc.(NASDAQ:NFLX), has been one of the best-performing household stocks over the last decade-and-a-half, with its market cap jumping from $600 million in 2005 to $206B in August 2020 thus returning a whopping 34,300%.
  
• Skyworks Solutions (NASDAQ:SWKS) was a little-known company before its prowess in making mobile chips helped its market cap soar from $800 million in 2006 to $25B currently.
  
• One of the world’s largest online travel agencies (OTA), Booking Holdings (NASDAQ:BKNG), has seen its market cap explode from $950 million 14 years ago to $74B currently.
  
• One of the most successful cloud-based software companies, Salesforce.com (NYSE:CRM), has seen its market cap soar from $1B in 2004 to $175B currently.

One common theme about these super-successful companies is that early-in investors who caught them when they were sitting on the cusp of megatrends such as clean energy, eCommerce, the mobile revolution and cloud computing realized truly outsized gains that beat average market returns many times over.

They say hindsight is 20/20 but early investors with an eagle eye can still spot emerging megatrends that will power the next wave of big winners, and small-caps are among the best bets.

Despite their higher potential for growth, small-cap stocks have lately been neglected simply because most investors are too focused on bigger and well-known cult stocks such as Amazon, Tesla, Netflix and Apple Inc. (NASDAQ:AAPL). Indeed, the now well-worn playbook of investing in tech and popular FAANG stocks is a big reason why small-caps have lagged their bigger brethren over the past decade.

But here’s a big secret: Asset class performance has historically been mean-reverting, meaning that long periods of underperformance are frequently followed by equally long periods of outperformance.

This disinterest in small-caps has created rare opportunities to find strong companies that are worthy of your attention. Here are small-caps lying in the intersection of megatrends that could outperform in the 2020s.

#1 Megatrend: EVs

Lately, investors can’t seem to get enough of EV companies, thanks in large part to the ESG boom as well as the continuing shift from fossil fuels to cleaner energy sources with lower emissions and carbon footprints.

The de facto leader of the space,TSLA, has been on a tear, surging nearly 600% in the year-to-date after scoring big success at its Gigafactory 3 in China where it’s expected to sell 150K vehicles in only its first year of operations there. This has helped alleviate fears that ultra-low oil prices would act as a disincentive for people looking to make the switch from gas-burning vehicles to EVs.

While Tesla remains a good pick, the smaller EV companies that are just getting started might offer the biggest returns down the road. These include companies such as:

• Electrameccanica Vehicles (NASDAQ:SOLO)–A Canadian designer and manufacturer of EVs, with its flagship, purpose built, single-seat electric vehicle dubbed SOLO. Electrameccanica currently sports a share price of $2.62 and market cap of $173M.
  
• Kandi Technologies Group (NASDAQ:KNDI)–A China-based EV company involved in the development, production and distribution of EV products, EV parts and off-road vehicle products. KNDI has a market cap of $473.4M with shares trading at $8.77.
  
• Workhorse Group (NYSE:WKHS)–an Ohio-based company that designs and builds high performance EVs and aircraft. WKHS sports a market cap of $1.62B and a share price of $15.12. The shares have enjoyed a huge runup after rallying 407% in the year-to-date.

#2 Megatrend: Renewable energy

Just like the EV sector, renewable energy stocks have lately turned red-hot: Invesco WilderHill Clean Energy ETF (PBW), an ETF designed to track US-listed stocks in the Clean Energy sector, has returned 56.8% YTD and 80.1% over 52 weeks thanks again to the unstoppable ESG momentum.

Renewables such as wind and solar have continued to post solid growth even during the pandemic thus proving the resilience of the sector. The sector has also been booming as the costs of renewables continue to fall thus making them competitive with fossil fuels.

Some of the top small-cap picks in the renewables sector include:

• Bloom Energy Corporation (NYSE:BE)– a California-based manufacturer of solid oxide fuel cells used in the production of electricity on-site. BE sports a market cap of $1.75B and a share price of $14.48.
  
• Renewable Energy Group Inc.(NASDAQ:GS)– an Iowa, renewable energy company engaged in the production of biofuels and renewable chemicals. GS has a market cap of $1.57B with shares trading at $39.63.
  
• Daqo New Energy Corp.(NASDAQ:DQ)–a Chinese company that manufactures monocrystalline silicon and polysilicon. DQ, a top pick in the Invesco WilderHill Clean Energy ETF (PBW), sports a market cap of $1.64B with shares changing hands at $116.68

#3 Megatrend: Hydrogen Fuel Cells

Like EV and renewable energy companies, stocks of hydrogen fuel cell manufacturers have been booming thanks to hydrogen power emerging as a good complement to renewable energy. Due to the intermittent nature of wind and solar in power generation, incorporating hydrogen helps to stabilize the power grid by providing a highly stable and predictable flow of electricity.

The EU has lately touted a hydrogen economy in its latest topline targets as an important aspect in fighting climate change and has set an ambitious goal to build 40GW of electrolyzers within its borders over the next decade.

Source: Energy.gov

Unfortunately, the hydrogen fuel cell market is littered with microcaps one the lower end of the spectrum and mid-caps on the higher end and no small caps in-between. Nevertheless, some of the better picks here include:

• Plug Power Inc.(NASDAQ:PLUG)–perhaps the best-known among fuel cell companies, PlugPower has built a successful niche developing technology for forklifts where fueling times can be critical. PLUG features a market cap of $3.8B and a share price of $11.36.
  
• Ballard Power Systems (NASDAQ:BLDP)–manufactures fuel cells for forklifts, buses, and marine applications. BLDP has a market cap of $3.5B and  share price of $14.77.
  
• Bloom Energy–about a year ago, Bloom Energy announced that it had developed fuel cells that can run on hydrogen and generate zero-carbon electricity. The fuel cells can be deployed for backup power and microgrid applications.
  
• FuelCell Energy, Inc. (NASDAQ:FCEL)–based in Connecticut, FuelCell Energy designs, manufactures and operates fuel cell plants that run on biogas and natural gas with more than 50 plants across the globe. FCEL sports a market cap of $602.5M and a share price of $2.83.

Other top small-cap picks spanning various megatrends include:

#4 Megatrend: Big Data

• Cardlytics Inc. (NASDAQ:CDLX)–partners with banks to run their loyalty programs in exchange for access for the banks’ payment card data. Cardlytics then uses this information to match the right products and promotions with the right consumers. Cardlytics currently sports a market cap of $2B with shares trading at $80.16.

#5 Megatrend: 5G

• Inseego Corp. (NASDAQ:INSG)–an industry pioneer that enables high performance mobile applications for large service providers, enterprise verticals and small-medium businesses (has an ongoing partnership with Verizon). INSG has a market cap of $1.2B with shares changing hands at $12.27.

#6 Megatrend: Conversational Commerce

• LivePerson Inc. (NASDAQ:LPSN)–develops conversational commerce and AI software. LPSN has a market cap of $3.7B and a share price of $58.65.

#7 Megatrend: Space

• Maxar Technologies (NYSE:MAXR)–a Colorado-based space technology company that specializes in manufacture of Earth observation/radar equipment and on-orbit servicing. MAXR sports a market cap of $1.58B with a share price of $27.65.

The post These Small-Cap Sectors Have The Biggest Upside Over the Next Decade appeared first on Global Investment Daily.

For decades, megatrends have always set the stage for winning investments, whether they involved technological revolutions, government driven regulation or population demographics. 

This has certainly continued to ring true with ESG investing, and not even the Covid-19 pandemic has been able to slow down the momentum. In fact, quite the opposite. 

Over the past half decade, ESG (Environmental, Social and Governance) has emerged as the new global megatrend, muscling out its own space and even outcompeting other megatrends. Every year, more than $3 trillion in new global funds have been flowing into the $30 trillion ESG market--and even the Big Banks are feeling the ethical squeeze keenly.

Bank of America has named climate change and moral capitalism as two of the 10 megatrends that will dominate the 2020s.

And now, many investment banks won’t even touch fossil fuels, especially coal, with a 10-foot pole.

Warm Moral Glow (But Making Money Helps)

Last year, no less than 26 banks announced they would no longer finance new coal plant projects anywhere on the planet, while another 22 banks pledged to stop direct financing for new thermal coal mine projects.

Leading up to the 2015 Paris climate talks, Goldman Sachs, Citigroup, JPMorgan Chase, Bank of America, Wells Fargo, and Morgan Stanley aka the Big Six all pledged to freeze financing for coal projects especially in the developed world or lower their credit exposure to coal miners. 

They weren’t just paying lip service to climate change, either. 

Last year, Goldman Sachs made history after becoming the first Wall Street bank to use its fat wallet to renounce fossil fuel investments. GS ruled out financing any new oil exploration or drilling in the Arctic, as well as financing any new thermal coal mines anywhere in the world. Goldman declared climate change as one of the “most significant environmental challenges of the 21st century” and has pledged to invest $750 billion over the next decade into areas that focus on climate transition.

In April 2020, Citigroup pledged to stop financing thermal coal miners by 2030, while Germany’s largest lender, Deutsche Bank, vowed to cut ties with any banks that continued to derive more than half their revenues from the coal industry by 2025.

They are in good company, too.

In January 2020, BlackRock Inc.(NYSE:BLK), the world’s largest asset manager with more than $7 trillion in assets under management (AUM), pledged to grow its ESG and green portfolio from $90 billion to more than a trillion dollars over the next decade.

But ESG is no longer merely associated with a warm moral glow and second-rate returns.

Green investing can be a serious money-spinner, too, as the red-hot renewable energy, EV and hydrogen sectors are proving: All three continue to handily outperform the global equities and bond markets.

The scary thing is that the ESG drive has actually been gaining momentum during the Covid-19 pandemic. 

According to research provider ETF Flows via MarketWatch, $15 billion in new funds flowed into ESG funds during the first half of 2020, or 40% faster this year compared to a year ago.

During the first quarter of 2020, a good 10-out-of-12 ESG-focused index funds that were surveyed outperformed the S&P 500, while all 11-out-of-11 foreign-based ESG funds have trounced their respective international benchmarks.

#1 Renewable Energy

The Covid-19 pandemic has taken a heavy toll on the fossil fuel sector and accelerated the shift from coal and oil to renewables like wind and solar.

Widespread lockdowns have resulted in energy demand plummeting: Oil demand fell by 30 million barrels per day at the height of the lockdowns, equivalent to 30% of pre-crisis demand evaporating. A new report by the International Energy Agency (IEA) states that global energy demand is set to plunge 6% Y/Y in 2020, roughly the same as losing the entire energy demand of India.

And there has never been a worse time to be invested in fossil fuels, with companies in the space recording massive asset write-offs and a growing pile of stranded assets. Consequently, fossil fuels’ most popular benchmark, the Energy Select Sector Fund (XLE), has lost nearly 36% in the year-to-date despite paring back much of its earlier losses after the epic oil price crash that sent oil prices into negative territory for the first time ever.

Source: CNN Money

Coal stocks are absolutely getting mauled: The sector’s best-known name, Peabody Energy Corp. (NYSE:BTU), has tanked 70.2% since the beginning of the year and 85.3% over the past 12 months.

Source: CNN Money

The good part: The renewable energy sector has been gleefully bucking this trend, thanks to continuing healthy growth in the midst of the storm.

The IEA has reported that renewable electricity generation increased 3% during the first quarter thanks to a flurry of new wind and solar PV projects coming online. Renewables now contribute 28% of global electricity generation up from 26% at the beginning of the year.

Not surprisingly, renewable energy stocks have been flying: The sector’s favorite benchmark, the iShares Global Clean Energy ETF (ICLN), has tucked on gains of 36% in the year-to-date and nearly 50% over the past 12 months compared to a 4.7%  gain by the S&P 500.

Source: CNN Money

Invesco WilderHill Clean Energy ETF (PBW), an ETF designed to track US-listed stocks in the Clean Energy sector, has returned 54.1% YTD and 78.7% over 52 weeks.

Source: CNN Money

The solar sector has been doing gangbusters, with the Invesco Solar ETF (TAN) up nearly 70% YTD, with some of its top stocks up in triple-digits:

• SolarEdge Technologies (NASDAQ:SEDG)– 127.3% YTD Return
• Enphase Energy (NASDAQ:ENPH)–173.1% YTD Return
• Sunrun Inc.(NASDAQ:RUN)–228.8% YTD Return

Source: CNN Money

#2 Hydrogen Fuel Cell Stocks

After several false dawns, the hydrogen sector has suddenly come alive with a bang.

Back in June, the European Union outlined its ambitious new hydrogen strategy that will help companies in the region achieve carbon neutrality by 2050. Among other things, the EU pledged to build 40 gigawatts of electrolyzers by 2030, which works out to 160x the current global capacity of 250MW.

Meanwhile, the U.S. Department of Energy recently announced its first hydrogen investment dubbed the H2@Scale initiative whereby it will invest $64 million in a handful of companies to undertake hydrogen research projects.

The hydrogen bug has bitten even energy utilities, with renewable energy giant, NextEra Energy Inc. (NYSE:NEE), recently talking up plans to convert its natural gas plants to run on hydrogen.

Predictably, hydrogen stocks have become hot property: Plug Power Inc. (NASDAQ:PLUG) +235.3% YTD, Ballard Power Systems (NASDAQ: BLDP) has racked up YTD gains of 100.4% while Bloom Energy Corp. (NYSE: BE) is up 76.6% over the timeframe.

That said, one Wall Street analyst has warned of a hydrogen bubble.

#3 EV companies

Just like hydrogen fuel cell makers, investors can’t seem to get enough of EV companies, thanks in large part to the successes of the leader in the space, Tesla Inc. (NASDAQ:TSLA), as well as the ESG boom.

TSLA stock has surged 268% this year and a staggering 570% in 12 months, giving the company a market cap bigger than General Motors (NYSE: GM), Ford Motor Company (NYSE: F), and Fiat Chrysler Automobiles US (NYSE: FCAU) combined. 

Indeed, TSLA has run up so much that the company has announced a five-for-one stock split. That has, ironically, sparked off yet another rally presumably because the shares are now more affordable, never mind the fact that’s a moot point in this era of fractional trading.

Investors appear thrilled that Tesla has continued defying Wall Street’s bearish expectations. During its latest earnings call, the Palo Alto, California-based EV manufacturer delivered 90,650 vehicles vs. 83,000 units that Wall Street had chalked in for the company. That’s a remarkable feat given the Covid-19 backdrop;  but more importantly, it’s also proving that even dirt-cheap fuel prices cannot stop the green revolution.

Source: CNN Money

Tesla’s EV peers have similarly been on a tear: Chinese EV manufacturer, NIO Inc. (NYSE:NIO), has soared 233% YTD, while Nikola (NYSE:NKLA) and Workhorse (NASDAQ: WKHS) are up 315% and 407%, respectively.

The EV explosion is expected to continue, with Bloomberg New Energy Finance predicting that 10% of new vehicle sales in 2025 will be electric compared to only 2.7% in the current year. Still, a cross-section of Wall Street has sounded the alarm on the sector due to thin or non-existence profits (Tesla and NIO) or lack of products (Nikola and Workhorse).

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