Bargain Buys: EVs, Renewables and Climate Change Plays

03/11/2020 5:00 am EST

Focus: INDUSTRIALS

Jim Powell

Principal Analyst, Global Changes & Opportunities Report

With so many serious threats overshadowing the economy you should only buy the very best stocks with proven long-term track records — and only if they are bargain priced, suggests Jim Powell, editor of Global Changes & Opportunities.

Whether the COVID-19 stock plunge turns out to be no more than a correction — or something much deeper — long-term value investors will realize that it represents an excellent opportunity to snap up more of our world-class blue chip dividend stocks at bargain prices.

Among the stocks that look particularly attractive for long-term appreciation are several involved in electric vehicles, renewables and climate change.

In the electric car industry, Tesla (TSLA) is the clear leader. Its price is sharply down due to the COVID-19 outbreak. I think the stock will resume its previous rally even if the virus proves difficult to eradicate. That’s certainly true of the common seasonal flu — and it isn’t stopping anything.

At the top of the list of companies that will benefit from the global effort to adapt to climate change and rising sea levels is Caterpillar (CAT).

Deere & Company (DE) is also in line to benefit — both for its agricultural machines and its line of heavy equipment. This shift from trying to prevent climate change to learning to deal with it can’t be stopped by COVID-19.

Renewable energy has the best chance to fight climate change by reducing the production of greenhouse gasses. Of the many green power developments, solar and wind power are the clear leaders. In many regions and applications, energy from the sun and wind are competitive with energy produced using fossil fuels.

SunPower Corp. (SPWR) looks very promising. The company provides turnkey solar power systems to specialty dealers worldwide — and directly to financial institutions, electric utilities, home builders, and other organizations.

SunPower is especially noteworthy for offering leased solar power systems to its customers. With leased systems, customers avoid the high initial cost of a complete solar installation. Leased systems can pay for themselves while they lower a customer’s electricity costs.

Vestas Wind Systems A/S (VWDRY) is the leading manufacturer of wind power turbines — and a developer of wind power installations that sometimes stretch for miles. In addition to its projects on land, the company is a pioneer in building reliable offshore installations.

Vestas is a rare pure-play in wind power. In the US alone, wind power output has more than tripled over the past decade. Even with such considerable progress, wind only generates about 6% of global energy

needs. That leaves a great deal of growth potential for Vestas – and profits for its investors.

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