PODCAST: Great Cleantech Stocks and Faith-Based Funds

23:47
 
Share
 

Manage episode 326373128 series 2797551
By Ron Robins. Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio is streamed directly from their servers. Hit the Subscribe button to track updates in Player FM, or paste the feed URL into other podcast apps.

Great Cleantech Stocks and Faith-Based Funds covers articles: “3 Cleantech Stocks to Buy for a Greener Portfolio” and “Sunrun: 3 Trades For Investors Seeking Solar Energy Exposure” both by Tezcan Gecgil; “Religious investors who want to buy into companies that uphold their beliefs have these options” by Russ Wiles; and links to nine other articles

PODCAST: Great Cleantech Stocks and Faith-Based Funds

Transcript & Links, Episode 81, April 22, 2022

Hello, Ron Robins here. Hope everyone is thinking how their investments are impacting the climate on this Earth Day!

Anyhow, welcome to my podcast episode 81 published on April 22, 2022, titled “Great Cleantech Stocks and Faith-Based Funds” — and presented by Investing for the Soul. Investingforthesoul.com is your site for vital global ethical and sustainable investing news, commentary, information, and resources.

Remember that you can find a full transcript, and links to content – including stock symbols, quotes, and bonus material – at this episode’s podcast page located at investingforthesoul.com/podcasts.

Now, just a reminder. I do not evaluate any of the stocks or funds mentioned in this podcast. Furthermore, if you’re concerned about the ESG and sustainability ratings of any stock or fund included in this podcast, check your broker’s online site for such information.

If your broker doesn’t have this information, signup for free with Morningstar and you can gain access to company and fund ESG-sustainability ratings. Please note, that I receive no compensation from Morningstar or anyone else covered in these podcasts.

Also, if any terms are unfamiliar to you, simply Google them.

-------------------------------------------------------------

1. Great Cleantech Stocks

Despite the recent turmoil in renewable energy stocks, many analysts remain positive about them over the next few years. In this light, Tezcan Gecgil on investorplace.com has this article titled 3 Cleantech Stocks to Buy for a Greener Portfolio as well as the article following this. Here’s some of what Ms. Gecgil had to say on each stock in this article.

“1) Ameresco (NYSE:AMRC)

It is a leading clean technology integrator offering energy efficiency and renewable energy solutions in the U.S., Canada and the U.K. The company works with government and private enterprises, serving customers ranging from airports and industrial installations to hospitals and schools.

Ameresco released fourth-quarter results on Feb. 28. Revenue increased 32% year-over-year (YOY) to almost $416 million. Adjusted net income came in at $26.7 million, or 50 cents per diluted share, up from $23 million in the prior-year quarter. Cash and equivalents ended the period at $87 million.

The group’s energy assets generated more than half of the profits in 2021. Analysts suggest the entry into utility-scale battery storage solutions represents a significant long-term growth opportunity. In addition, the integrator boasts a solid backlog worth more than $5 billion.

Ameresco stock is down 32% year-to-date (YTD). Shares are trading at 30 times forward earnings and 2.5 times trailing sales. Meanwhile, the 12-month median price forecast for Ameresco stock stands at $85.

2) ON Semiconductor (NASDAQ:ON)

It provides power and analog semiconductors as well as intelligent sensors for cleantech industries. The chipmaker generates two-thirds of its revenue from automotive and industrial end markets, primarily from electric vehicles (EVs).

ON Semiconductor announced Q4 results on Feb. 7. The company posted record quarterly revenue of $1.85 billion, up 27% YOY. Adjusted net income stood at $478 million, or $1.09 per diluted share, up from $147 million a year ago. Cash and equivalents ended the period at $1.38 billion.

Overall, gross margin improved from 33% in 2020 to 40% in 2021. Free cash flow soared 167% YOY to $1.38 billion. Meanwhile, management has signed agreements that will see committed revenue growth of more than $2.6 billion through 2024.

Like many other tech names, ON stock is down more than 22% YTD. As a result, shares are trading at 12.9 times forward earnings and 3.5 times trailing sales — an appealing valuation level. At present, the 12-month median price forecast for ON stock is at $75.

3) Plug Power (NASDAQ:PLUG)

The group is regarded as an innovator in modern hydrogen and fuel cell technology. It develops hydrogen fuel cell systems that replace conventional batteries in vehicles as well as equipment powered by electricity.

Plug Power issued robust Q4 results on March 1, generating a record quarterly revenue of $162 million. Net loss narrowed to $193 million, or a loss of 33 cents per diluted share, up from a loss of $484 million a year ago. Cash and equivalents ended the period at $3.13 billion.

Hydrogen fuel cell technology is gaining traction worldwide. As a result, Plug Power has forged various partnerships to bolster growth. Those names include SK Group in South Korea, Renault (OTCMKTS:RNLSY) and Lhyfe. The agreements range from the promotion of hydrogen fuel cell EVs to building green hydrogen plants in Europe. Meanwhile, in 2022, management projects full-year revenue to increase 80% YOY to exceed $900 million.

Despite stable growth in operations, PLUG stock has lost nearly 12% YTD. Shares are trading at 28.6 times trailing sales. Finally, the 12-month median price forecast for PLUG stock stands at $38.” End quotes. Incidentally, Plug Power just did a major deal to supply Walmart with 20 tonnes of liquid green hydrogen every day.

-------------------------------------------------------------

2. Great Cleantech Stocks

Now, here’s Tezcan Gecgil’s second article, though this time appearing on Investing.com. It’s titled Sunrun: 3 Trades For Investors Seeking Solar Energy Exposure. Here are some quotes from her on Sunrun.

“Shares of the leading solar products installer Sunrun (NASDAQ:RUN) are down close to 18% so far this year and 47.5% in the past 52 weeks. By comparison, the Invesco Solar ETF (NYSE:TAN) has lost 2.7% since January and 16.1% over the past year…

Despite the decline in share price, Sunrun is among the top residential solar panel providers in the US. In October 2020, it acquired competitor Vivint Solar. Thus, the company has seen volume growth in panel installations, especially in new homes, as well as in battery installations.

Recent metrics

Investors have also been excited about Sunrun’s upcoming partnership with Ford (NYSE:F) on home energy storage solutions. Ford’s F-150® Lightning™ truck will be used to ‘power homes and help accelerate the adoption of zero-carbon solar energy… Sunrun [will be] the preferred installer for F-150 Lightning home charging solutions in select service areas…’

Sunrun issued Q4 and FY21 results on Feb. 17, reporting a quarterly loss of 19 cents, which was wider than expected. Supply issues meant the alternative energy group delivered fewer battery systems than forecast previously.

Nonetheless, Sunrun added close to 30,000 new customers during the quarter, and the total number of customers went over 660,000. As a result, the annual recurring revenue was $851 million…

Sunrun shares have an ‘outperform’ rating among the 19 analysts polled via Investing.com and the 12-month average target price stands at $49.53, implying an increase of more than 71% from current levels.” End quotes.

-------------------------------------------------------------

Faith-Based Funds

Many ethical and sustainable investors might want their religious or spiritual values reflected in their investments. This is a new article that can help them in this. It’s titled Religious investors who want to buy into companies that uphold their beliefs have these options. It’s by Russ Wiles on azcentral.com.

Here’s some of what he writes.

“Faith-based investing is getting easier to do with the advent of more religious mutual and exchange-traded funds… The funds are still comparatively few in number, with relatively small assets under management…

While Christian funds predominate among the religious offerings, Islamic funds also have gained a following, such as the Amana mutual funds managed by Saturna Capital. The Amana funds steer clear of businesses engaged in liquor, pornography, gambling and banking. They also avoid bonds and other conventional fixed-income securities, favoring dividend-pay stocks for income.

For example, large holdings in the Amana Income Fund include dividend payers Eli Lilly, Microsoft, Taiwan Semiconductor Manufacturing, Rockwell Automation and Pfizer.

Another Islam-focused portfolio, the Azzad Ethical Fund, excludes those types of corporations as well as tobacco producers, weapons manufacturers, some insurance companies and corporations suspected of being connected to human-rights abuses.

Different areas of emphasis

Even under the same general religious banner, faith-based funds differ somewhat in their investment emphasis, especially when screening out companies.

The Ave Maria fund family, for example, favors corporations that follow, or at least don't violate, anti-abortion Catholic values. The fund group said it avoids investments in several key areas — corporations engaged in or supporting abortion including Planned Parenthood, pornography, embryonic stem-cell research and companies with policies deemed to undermine the sacrament of marriage.

Incidentally, advisers to the Ave Maria funds range from Detroit Archbishop Allen Vigneron to economist/Fox News anchor Larry Kudlow to Lou Holtz, the Notre Dame football coaching legend.

By contrast, the new FIS Biblically Responsible Risk Managed Fund, based in Scottsdale, enunciates a longer list. This fund won't invest in corporations believed to be involved in abortion, contraception, embryonic stem-cell research/human cloning, human-rights violations, pornography, alcohol, tobacco, armaments or gambling…

Much is in eyes of the beholder

But in many cases, portfolio managers don't always have a clear-cut decision on whether a corporation would make an acceptable faith-based investment — not just based on business operations but also in terms of which groups or causes a firm supports with its philanthropic dollars or promotional efforts.

For example, some Christian portfolio managers will blankly avoid companies that, say, donate to gay-rights groups or Planned Parenthood…

Top stock holdings in the FIS Biblically Responsible Fund, which trades under the ticker symbol ‘PRAY,’ include Palo Alto Networks, Apple, Medtronic, Ecolab and Zimmer Biomet. The fund also holds shares in two Arizona-based corporations — trash hauler Republic Services and GoDaddy, the technology-services provider for small businesses.

Do religious funds sacrifice returns?

To the extent that religious funds aren't widely embraced, that could partly reflect a perception that, by weeding out stocks or bonds in certain industries, investors will sacrifice performance.

Yet one study, from the Christian Investment Forum, showed solid results.

The study tracked the returns of 35 Christian stock funds against other stock funds over the 15 years through December 2020. Christian funds gained 7.1% annually on average over that period, compared with 6.3% annually for the other stock funds. The study also attributed a slight performance edge to nine Christian bond funds against fixed-income funds in general, 4.2% annually compared with 3.8%...

The study ‘dispels some of the long-standing perceptions that incorporating faith-based criteria, in addition to traditional investment criteria, is correlated to underperformance,’ wrote the study's author, John Siverling.” End quotes

-------------------------------------------------------------

Other Honorable Mentions—not in any order

1. Title PNC Financial Services Group a Top Socially Responsible Dividend Stock With 3.4% on IQ Stock Market. By BnK Invest.

2. Title Invest Responsibly Using These ETFs by James Comtois on etfdb.com.

3. Title Meet the recycling start-up hustling to keep EV batteries out of landfills on CorporateKnights.com. By John Lorinc.

4. Title Well-Rated Sustainable (Canadian) ETFs to Consider on Morningstar.ca. By Ian Tam.

5. Title 5 ESG Stocks to Buy for Earth Day 2022 on Kiplinger.com. By Ellen Kennedy.

6. Title 9 Top Sustainable Stocks That Are Undervalued Now on Morningstar.com. By Lauren Solberg.

Articles for UK, Australian, and International Investors

1. Title Responsible investing on whatinvestment.co.uk. It’s a guide. By the What Investment Team.

2. Title 2 popular ETFs for investors to buy in April on fool.com.au. By James Mickleboro.

3. Title 2 FTSE renewable energy stocks with good dividends I’d buy now on fool.com.uk. By Manika Premsingh.

-------------------------------------------------------------

Ending Comment

Well, these are my top news stories with their stock and fund tips -- for this podcast: “Great Cleantech Stocks and Faith-Based Funds.”

To get all the links, stock symbols, or to read the transcript of this podcast -- and more -- go to investingforthesoul.com/podcasts and scroll down to this episode.

Also, be sure to click the like and subscribe buttons in Apple Podcasts, Google Podcasts, or wherever you download or listen to this podcast.

And please click the share buttons to share this podcast with your friends and family. Let’s promote ethical and sustainable investing as a force for hope in these deeply troubled times!

Contact me if you have any questions.

Thank you for listening.

Talk to you next on May 6. Bye for now.

© 2022 Ron Robins, Investing for the Soul.

90 episodes