On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. However, how long this transition takes, and whether road bumps are encountered, are factors that investors are trying to price in today. Indeed, those investing in this sector have yet another catalyst to point to. That said, this announcement could further the clean energy argument. Thus, in this bear market, investors are seeking cash flows today over the promise of higher cash flows in the future. However, the short-term economic needs which are solved by fossil fuels appears to have outshined the long-term impact renewables promote. And that’s been the case, to a certain degree. Rising oil prices should, in theory, boost demand for renewables. Unfortunately for many investors, clean energy stocks have been under pressure of late. Indeed, for investors in clean energy stocks, this is the sort of encouraging news that should drive a 5% to 10% move in a given day. More government investment in a nascent sector which has been thriving on mostly private investment for some time is a good thing. Why Are Clean Energy Stocks Soaring Today?
Let’s dive into what investors in clean energy stocks should make of this news. Some suggest that it’s likely these targets will be watered down at some point. However, not all activists and environmentalists are sold on this news. In order to wean off of Russian oil, perhaps these moves are necessary. Accordingly, investors appear to be taking this news as a cue that the EU is about to dump a boat load of money into the renewables space. Now, that’s a significantly tight window, and would require a lot of investment. Additionally, there are targets which would see renewable energy make up 40% of all energy consumed by Europe by 2030. Among the package of reforms included in the agreed-upon laws are bans on diesel and gasoline. Notably, EU energy ministers have agreed on a set of new laws looking to promote renewable energy. These companies include JinkoSolar (NYSE: JKS), Gevo (NASDAQ: GEVO), Clean Energy Fuels (NASDAQ: CLNE), and Daqo New Energy (NYSE: DQ). Some of the top clean energy players are seeing gains between 5% and 10% today. This move comes amid other developments from this G7 summit. However, clean energy stocks are also rallying today in tandem. Indeed, we’ve seen the market’s reaction to fossil fuel-related energy stocks today amid proposed price caps on Russian oil via the ongoing G7 meeting in Germany.
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