Chronicle Journal: Finance

3 Small-Cap Cleantech Stocks That Could Continue to See Impressive Gains in 2021

With President-elect Joe Biden’s electoral win formally acknowledged by the U.S. Congress today, the cleantech industry may now realistically expect to be presented with more sustainable long-term growth opportunities going forward. While industry leaders will surely benefit, smaller cleantech stocks, such as Blink Charging (BLNK), Beam global (BEEM), and ReneSolar (SOL), that have relatively higher growth potential, may also win a piece of the action. As such, it could be smart to bet on them. Let’s take a closer look.

The clean energy sector is projected to be the fastest growing industry post COVID-19 pandemic. Following one of the largest mass vaccinations in history, which is currently at an early stage, the global economy’s recovery is expected to drive a significant growth for the clean energy industry,  with major economies actively taking steps to transform their industries.

Cleantech stocks are likely to surge in today’s trading session because the Congress and President Trump formally acknowledged Joe Biden’s victory, pledging to a peaceful transition of power. The incoming administration has ambitious plans to revamp the face of America as a carbon-neutral nation over the next four decades and to ensure the sustainable growth of the clean energy industry.

While investor sentiment surrounding this industry has led to massive gains for some prominent players in this space, several small-cap companies have also boasted double-digit gains over the past year, backed by significant increases in revenues and earnings.

We think companies such as Blink Charging Co. (BLNK), Beam Global (BEEM) and ReneSola Ltd. (SOL) have the potential to outperform cleantech giants in terms of growth rates in the coming months through their strategic expansion policies and growing footprint in international markets.

Blink Charging Co. (BLNK)

BLNK owns and operates electric vehicle charging equipment and network charging stations across the U.S. Its primary product line includes Blink EV Charging network, EV charging equipment, and EV related services.

BLNK recently introduced innovative cable management solutions for its charging stations that allow  the company to maintain its equipment easily while ensuring the safety of users. In November, BLNK acquired EV charging operator U-Go Stations, Inc., which added 44 new locations to BLNK’s portfolio charging points.

With the U.S.  taking steps to transform public transport systems with electric vehicles, BLNK partnered with Lion electric company in December to capitalize on the emerging trend. Under the agreement, Blink charging stations are to be established with Lion EV school fleets and other vehicles.

The company signed similar agreements with Lehigh Valley Health Network and Blessing Health Systems in the same month. These partnerships allow BLNK to expand its operations across  the country, thereby establishing itself more firmly  in the EV charging space.

BLNK’s revenues have increased 18% year-over-year to $0.90 million in the third quarter ended September 30, 2020. This can be attributed to a 74% rise in product sales, and an 87% rise in Blink owned chargers deployed across the country.

Analysts expect BLNK’s EPS to rise 15.2% in fiscal 2021. The consensus revenue estimate of $10 million for this year represents  an 89.4% improvement year-over-year.

BLNK has gained more than 3,205% since hitting its 52-week low of $1.25 in March. The stock hit its 52-week high of $56.12 on December 28.

The POWR Ratings are also bullish on BLNK. It has a “Buy” rating. It also has an “A” for Trade Grade. Among the Specialty Retailers stocks, it is ranked 10th out of 45.

Beam Global (BEEM)

BEEM develops and sells solar powered products and renewably energized products through proprietary technology solutions. The company’s renewable energy platforms have applications in the electric vehicle industry, energy security, and outdoor media and branding industry. Its products can be categorized in two segments - Electric Vehicle Autonomous Renewable Charger (EV ARC) and SolarTree. The company was added to the CIBC Atlas Clean Energy Index in  December.

As of December 9th, BEEM had three patents pending. They  are designed to boost the overall production capacity, efficiency, and resiliency of the company’s manufacturing process. Just a week earlier, BEEM’s UAV drone renewable charger model received a patent from the U.S. Patents and Trademark Office. These developments allow the company to secure its intellectual property in the budding clean-energy market.

Earlier in November, BEEM received a contract from the Federal government to build solar EV charging infrastructure across the General Services Administration (GSA) site. The contract should help the company consolidate its relationship with the agency and state governments, making it a preferred federal EV contractor in the future. BEEM reported a cash balance of $12.33 million as of September 30, 2020, up 220.4% over the last nine months. the company’s EPS has improved 16.7% year-over-year for the nine months ended September 30, 2020.

Analysts expect BEEM’s EPS to rise 44.4% in the current quarter (ending March 31, 2021), and 75.4% in fiscal 2021. A consensus revenue estimate of $18.82 million for the current year represents  a 233.7% improvement from the same period last year.

BEEM has gained more than 885% since hitting its 52-week low of $6.09 in March. The stock is currently trading 20.7% below its 52-week high of $75.90, which it hit on December 31.

BEEM is rated “Buy” in our POWR Ratings system, with an “A” for Trade Grade. It is currently ranked #4  of 21 stocks in the Solar industry.

ReneSola Ltd. (SOL)

SOL develops and operates solar projects through three segments – Solar Power Project Development, EPC Services and Electricity Generation Revenue. The company sells the electricity generated by its solar projects through small scale distributed generation projects and community solar gardens across the United State and certain European countries.

SOL began developing multiple solar projects across Poland and Romania over the past year. On January 5, it entered into a joint venture agreement with Eiffel Investments Group to boost solar project developments across  Europe. Moreover, the company’s ongoing construction work in China is expected to generate incentive payments from the government, as approved by China’s Ministry of Finance. These developments reflect the company’s ability to leverage international markets for the expansion of its operational activities.

SOL raised approximately $20 million through a direct listing of shares in December, the proceeds of which is expected to fund its expansion of its solar project pipeline.

While SOL’s revenues  declined year-over-year in the third quarter ended September 30, 2020, the company has remained profitable over this period. The company reported gross profit of $5.91 million, and income from operations worth $2.89 million. SOL’s net income has increased 33% year-over-year to $2.42 million during this quarter.

Analysts expect SOL’s EPS to rise 111.1% in the ongoing quarter (ending March 31, 2021), and 3,000% in the current year. The consensus revenue estimate of $185.15 million for fiscal 2021 indicates a 126.7% improvement year-over-year. SOL has gained more than 185% since hitting its 52-week low of $0.85 in March.

It is no surprise that SOL is rated “Strong Buy” in our POWR Ratings system. It has an “A” for Trade Grade and Peer Grade, and a “B” for Buy & Hold Grade. It is currently ranked #9 of 21 stocks in the Solar industry.

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BLNK shares were trading at $44.47 per share on Thursday afternoon, up $3.10 (+7.49%). Year-to-date, BLNK has gained 4.02%, versus a 1.49% rise in the benchmark S&P 500 index during the same period.



About the Author: Aditi Ganguly

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities.

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