The energy sector has been at the top of watchlists across the investing and trading community, and for good reason. A recent attack on the Saudi Arabian Abqaiq oil facility crippled the country’s production of oil, taking about 5 million barrels per day of oil out of production. That works out to be about 5% of the global supply of oil.
With such a big hit to supply, the value of oil rapidly found its way upward with energy stocks following closely behind. While a lot of the focus has been on the world’s largest oil conglomerates like Exxon Mobil (XOM), the truth of the matter is that the opportunities representing the largest potential are lacking the attention that they deserve.
Here are a few stocks that investors and traders looking to get in on potential gains in energy ahead should be looking at:
CleanSpark (CLSKD) Stock: #1 For A Reason
CleanSpark doesn’t produce oil or natural gas. The company doesn’t bill hundreds of thousands of customers monthly for utilities and it isn’t putting up any solar farms anytime soon. However, it may be the largest opportunity in energy as the sector stands today.
CleanSpark provides microgrid infrastructure and technology at a very important time. As it sits, the utility infrastructure is aging rapidly and constantly being put under higher and higher loads as demand increases. This leads us to a very simple conclusion. Current energy infrastructure will, at some point, fail.
Large enterprises know this, and are looking to solve three very real problems:
- Increasing costs due to higher demand and a larger need for maintenance due to aging infrastructure.
- Carbon footprint and the damaging effects of carbon on the atmosphere are leading many to look for “green” energy solutions.
- With aging infrastructure, the constant threat of systemic failure is concerning to most large energy consumers.
CleanSpark’s microgrid solution solves all of these problems. First and foremost, the solution reduces reliance on the traditional power grid, alleviating fears of a blackout. On top of that, the microgrid is built out using various forms of green energy, including wind, solar and fuel cell solutions.
To top it all off, the system runs on proprietary software that handles every step of the process from energy purchase to storage to consumption. In fact, the AI-based software solution purchases sources power from the lowest cost sources at the lowest cost times of day, stores the power, and uses the electricity during peak, expensive hours. Between the cost reduction associated with going with a green self-sustaining system, this proprietary technology compounds the savings, with some seeing a reduction in costs of up to 82%.
With energy costs rising, dependability of the traditional power grid decreasing, and the world on forward momentum in the movement to go green, CleanSpark is offering a very in-demand solution at the moment. Not to mention, the stock is trading at an incredible undervaluation.
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FuelCell Energy (FCEL): Yet Another Green Player Likely To See Green Ahead
Hydrogen fuel cell technology is seeing an increase in interest from both governments and large corporations around the world. With increasing concerns surrounding energy cost, infrastructure, and environmental harm, this trend is likely to continue.
For FuelCell Energy, this is great news. The company has a diverse portfolio of projects, building out fuel cell plants on a multi-megawatt level.
Interestingly, FuelCell Energy has become a favorite stock among the investing and trading community. Consistently trading like water, it seems like the stock ticks up every time any large company or government shows interest.
Most recently, FuelCell gained more than 13% after unrelated stories hit the tape. Allianz Global Investors purchased a large stake in a hydrogen fuel cell-focused company and The Railway Technical Institute in Japan announced the development of a train that ran on clean, hydrogen fuel cell energy. While none of the news that day had anything to do with FuelCell Energy, the stock popped, as it tends to do when this type of news comes out.
At the moment, FuelCell Energy is in the process of restructuring. Of course, the goal of the restructuring efforts is to grow value for its shareholders. As the restructuring continues and adoption of fuel cell technologies continues to tick up, this stock may be one to watch closely.
Camber Energy (CEI): An Oil Infrastructure Play Worth Considering
I want to be clear about one thing first here. I’m not going to say that Camber Energy was a good play a year ago, or even a few months ago. However, due to recent news released by the company, I do believe that it’s a strong play as the energy industry starts to see gains.
For some time now, Camber Energy has been working to restructure. The biggest move made in these efforts to date happened recently, when the company announced the acquisition of Lineal Star Holdings.
Lineal Star is an oil pipeline infrastructure company that both develops new pipelines and maintains active ones. The company has more than three decades of operations under its belt and was acquired at the perfect time.
With 5% of the daily production of oil out of the global equation, companies around the world will be working to increase production in order to fill this gap. As such, the need for new pipelines and other infrastructure offered by Lineal Star will likely grow, creating a compelling opportunity.
It’s also worth mentioning that Camber Energy also produces oil and oil equivalents. So, while the value of the commodity heads up, Camber won’t only benefit from increased demand for Lineal Star product and services, but from increases in revenue due to gains in the value of oil.
All in all, Camber is becoming a strong pick.
Final Thoughts
With the energy industry booming, many are looking for the next undervalued stock to take advantage of. In my view, the top three that I’m watching are outlined in order above. CLSK seems to provide the largest opportunity, tapping into energy, green energy, and enterprise services, followed by FuelCell, yet another green energy alternative, and Camber Energy, a stock that’s likely to make a strong turnaround ahead.
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