Is Altus Power, Inc. (NYSE:AMPS) is the best and cheap clean energy stock?

We recently created a list The 10 best renewable energy penny stocks worth investing in in this article we will discuss whether Altus Power, Inc. (NYSE:AMPS) is the hottest renewable energy penny stock today.

Investments in renewable energy

The renewable energy sector has seen growth in recent years, driven by increased government investment in the energy transition as the world moves away from fossil fuels. However, the sector faced volatility in 2023 due to inflation and high interest rates. Analysts believe the renewable energy market will make a comeback this year, driven by growth in solar and wind power generation. Recently, on May 23, Reuters reported that leading renewable energy company Orsted has secured a $680 million tax equity investment from J.P. Morgan to finance 250 megawatt and 300 megawatt solar storage projects in Texas, respectively. and Arizona. This investment leverages tax credits under the Inflation Reduction Act and is an indicator of its potential to accelerate clean energy adoption in the United States. The Arizona plant will receive a one-time investment loan for the battery storage core. Prior to this transaction, JP Morgan had other investments in Orsted’s 1.8 GW onshore portfolio in the United States. Both projects are expected to become operational in 2024.

The renewable energy market is gaining momentum in 2024. Over the past month, leading renewable energy-linked exchange-traded funds (ETFs) have shown a surge in returns. As of May 28, the leading clean energy ETF, the iShares Global Clean Energy ETF, was up 11%, while the First Trust Nasdaq Clean Edge Green Energy Index Fund was up 14%. Solar stocks are also on the rise, with the Invesco Solar ETF gaining 14% over the past month. An example of a booming solar stock is First Solar, which is leading the charge with its stock rising more than 50% over the past month, significantly outperforming the broader market. Check out our free report on the topic Top 7 alternative energy stocks according to analysts.

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Clean energy powering artificial intelligence

According to forecasts by the International Energy Agency, global electricity consumption for data centers, cryptocurrencies and the artificial intelligence sector could double by 2026. This presents the clean energy sector with a lucrative opportunity to exploit. Most recently, Oklo CEO Jake DeWitte appeared in an interview with Yahoo Finance Catalysts on May 24, where he talked about the company’s business model and energy landscape. Oklo is an advanced nuclear technology company engaged in the development and design of fission power plants to provide reliable energy on a commercial scale to U.S. customers. The company’s goal is to create clean energy, and it also has the support of OpenAI founder Sam Altman. DeWitte said Oklo uses next-generation nuclear technology that could power the planet for more than a billion years. The CEO believes that energy demand is growing as AI sectors use clean energy to power their operations. Oklo’s business model is based on selling the generated energy through long-term contracts to major energy consumers for artificial intelligence, such as data centers. This will provide the company with sustainable revenues to continue developing and implementing clean energy solutions.

In addition, the revenue stream will enable the company to benefit from project financing and take advantage of government tax credits for investments. DeWitte also talked about the company’s partnership with Wyoming Hyperscale, a data center company, that will enable Oklo to integrate clean energy with advanced liquid cooling technology in the data center. This partnership could lead to waste heat from the reactor being used to cool the data center. Both companies signed a 20-year energy purchase agreement. You can also check out our free report on 7 AI stocks that can’t be stopped.

Undervalued renewable energy companies with high growth potential

Tigo Energy is a solar and energy storage company committed to the development of modular-level power electronics (MLPE). MLPEs help solar modules achieve maximum power output. The company also offers GO energy storage systems with solar storage management capabilities and energy intelligence (EI) platforms. Founded in 2007, the company serves residential, utility and commercial customers in the United States, Europe, the Middle East, Asia-Pacific and Africa. The company’s stock is also one of the cheapest clean energy stocks, according to analysts. On May 8, the company announced that it had launched its newest Tigo Flex MLPE product line, Tigo TSX-4. The new MLPE is intended for large commercial and industrial photovoltaic projects. Works with photovoltaic modules with a power of up to 800 W. The new TSX-4 series offers increased output power, reduced costs, optimization and advanced monitoring.

Another leading renewable energy company, Emeren operates, develops and builds solar energy projects. Its portfolio consists of 3 gigawatt projects and independent power producer (IPP) assets. It also designs and supplies solar modules along with other components. On April 23, the company announced that it had partnered with Nuveen Infrastructure to develop battery storage projects in Italy. The agreement finalized cooperation for a capacity of 2.83 GWh and the development of two additional battery storage projects. Construction of the projects will begin in 2024 and be completed in 2026.

Silhouette of a wind turbine against the background of an idyllic sunset, representing clean energy projects.

Methodology

To compile our list of the 10 best renewable energy penny stocks worth investing in, we used Yahoo Finance and Finviz’s stock screeners and, as of May 28, listed the stock as trading at less than $5. We also analyzed many similar rankings from Insider Monkey and various clean energy ETFs to create a list of 30 renewable energy penny stocks. We’ve selected the 10 stocks with the most buy or buy equivalent ratings from Wall Street analysts and the highest average upside potential as of May 28. Finally, we checked hedge fund sentiment for each stock. Hedge fund data was pulled from Insider Monkey’s database of over 900 elite hedge funds as of Q1 2024. The 10 best renewable energy penny stocks to invest in are listed in ascending order of hedge fund holdings by status as of the first quarter.

At Insider Monkey, we’re obsessed with the stocks that hedge funds are flocking to. The reason is simple: our research has shown that we can outperform the market by imitating the best stocks of the best hedge funds. As part of our quarterly newsletter strategy, we select 14 small- and large-cap stocks every quarter, and since May 2014, we have returned 275%, beating our benchmark by 150 percentage points (see more details here).

Is Altus Power, Inc. (NYSE:AMPS) is the best and cheap clean energy stock?

Altus Power, Inc. (NYSE:AMPS)

Share price as of May 28: $3.94

Number of hedge fund holders: 10

Altus Power, Inc. (NYSE:AMPS) is a clean electrification company engaged in the acquisition, development, construction and operation of rooftop, ground and carport photovoltaic solar energy generation and storage systems. Founded in 2013 in Connecticut, the company serves solar customers in the industrial, commercial, public sector and community sectors. In January, the company completed the acquisition of 84 megawatts of assets from Vitol, 50 megawatts in New York and additional assets in New Jersey and Maine. The company expects the newly constructed assets to increase its annual recurring revenue by almost $13 million, reaching $183 million. The company’s goal is to produce 1,060 gigawatt-hours of energy from its operating portfolio by the end of the year.

On May 9, Altus Power, Inc. (NYSE:AMPS) reported earnings for the first quarter of 2024. It reported EPS of $0.04, beating estimates by $0.14. Revenues for the quarter reached $40.7 million, up 38.4% year-over-year. In the first quarter of 2024, the company generated 210 gigawatt hours of clean electricity. The leading clean energy company serves more than 24,000 local solar customers, adding 4,000 residential customers in the first quarter.

At the end of the first quarter, Altus Power, Inc. (NYSE:AMPS) was in a portfolio of 10 hedge funds, with positions worth $32.57 million, according to Insider Monkey’s database. Based on the consensus of 9 analysts, the stock has a Buy rating and the average price target is $6.5, representing a 64.25% upside potential from the current price.

Altus Power, Inc. (NYSE:AMPS ranks No. 3 on our list of the best renewable energy penny stocks to invest in. To discover more stocks, check out our free report on The 10 best renewable energy penny stocks worth investing in.

While we recognize the potential of these renewable energy stocks, our belief is based on the belief that AI stocks have a better chance of delivering higher returns, faster. If you’re looking for an AI stock that has more promise than NVIDIA but trades at less than 5x earnings, check out our report on the cheapest AI stocks.

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Disclosure. Nothing. This article was originally published on Insider Monkey.