Green investing is the newest strategy to hit the investment world. People can’t mistake “going green” for a fad because it has serious implications for, and impacts on, our environment. Socially responsible investors want to help save the Earth and earn simultaneously.
Renewable energy companies in the utilities sector have become popular in recent years. However, clean technology companies are green players, too, and making big waves in the stock market. Ballard Power Systems (TSX: BLDP), Nano One Materials Corp. (TSX: NANO), and Exro Technologies (OTC: EXRO.F) should attract more ESG investors, if not receive solid support from them.
Still a top growth stock candidate
Only Ballard Power Systems of the three green stocks underperforms year to date (-10.19%). However, the provider of clean energy fuel cell solutions is among the top Canadian growth stocks. It was a TSX30 winner for three consecutive years (12th in 2019, 2nd in 2020, and 4th in 2021).
The current share price is $5.82; market analysts recommend a hold rating. Their 12-month average price target is $22.91, or a 293% return potential. Ballard’s competitive advantages include experience in manufacturing fuel cell products (40 years), top-tier long-term customers, and strategic shareholders.
Ballard CEO Randy MacEwen said that effective Q1 2023, management will report revenues in line with key end markets (bus, truck, rail, marine, stationary, emerging markets, and others). He adds the change reflects the evolution of the market and Ballard’s strategy to sell and scale the production of fuel cell products.
The latest product and potential growth driver is next-generation, thin, flexible graphite bipolar plates. Ballard plans to invest around $18 million in manufacturing the plates this year through 2025.
Low-carbon intensity industrial process
At only $2.90 per share, Nano One outperforms the TSX year to date (+18.85% versus +1.11%). Market analysts recommend a buy rating, with an average price target of $6.50 (+124%) in 12 months. This $302 million company’s contribution to the fight against climate change is the production of high-performance lithium-ion battery cathode materials.
According to management, the company’s technology applies to electric vehicles, energy storage, and consumer electronics. Besides reducing costs, the low-carbon intensity improves environmental impact. Nano One owns Canada’s only LFP (lithium ferrous phosphate) battery production facility.
Huge addressable markets
Exro Technologies develops new-generation power electronics that expand the capabilities of electric motors and batteries. The $351.8 million company will rely on its new class of control technology to drive growth. According to management, prospective investors have a unique high-growth technology opportunity in the electrification transition race.
The significant upside will come from continued focus on innovation in e-transition and energy storage market verticals. The addressable markets for its lead products, Coil Driver (motor controllers) and Cell Driver (energy storage), should reach US$133 billion and US$224 billion by 2030, respectively.
This absurdly cheap ($2.15 per share) stock flies under the radar, but that should change soon. Market analysts recommend a strong buy rating, forecasting 55% price appreciation in one year.
Rising green investments
Expect green investments to rise as more green players crowd the market. Keep them on your watchlist! Most TSX companies report ESG initiatives, actively informing investors and other stakeholders about their meaningful actions against climate change and sustainable investments.
