New US Vegan Climate ETF. It’s pros and cons. Has good debut on the NYSE. Current top renewable energy stocks. Best six stocks for millennials according to Zacks' analyst. Al Gore’s Generation Investment Management purported key holdings. The DIY Ethical-Sustainable Investing Pays Tutorial offers simple way to create a stock portfolio reflecting your values! More
PODCAST: First Vegan Fund, Renewable Energy Stocks, and more…
Transcript & Links September 13, 2019
Hello, Ron Robins here. Welcome to my podcast Ethical & Sustainable Investing News to Profit By! for September 13, 2019—presented by Investing for the Soul. investingforthesoul.com is your site for vital global ethical and sustainable investing news, commentary, information, and resources.
Investment ideas in these podcasts are generally gleaned from market participants in the US, Canadian, UK, European, Asian and Australasian financial markets.
And, Google any terms that are unfamiliar to you.
Also, you can find a full transcript, live links to content, and often bonus material to these podcasts at their episodes’ podcast page located at investingforthesoul.com/podcasts.
Now to this podcast!
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Well, the US Vegan Climate ETF (VEGN: N) finally debuted on the NYSE on September 10. First days trading saw ok action hovering around its initial price of $25 a share. On September 13 it was still hovering about that price.
What disappoints many vegan-vegetarian investors is that the ETF doesn’t appear much different from regular mainstream big-cap ETFs. However, as the promoters of this ETF point out that there are few pure vegan-vegetarian stock plays and the ones that are out there are small. Also, to get a well-rounded stock ETF, it had to include big cap S&P 500 stocks. Also, because of its structure, I suspect its returns could be similar, or hopefully even a little better, than S&P 500 ETFs generally.
For a good overview of this ETF see Brenton Garen’s post, Vegan ETF ‘VEGN’ Debuts on NYSE, on ETF Trends.
Quoting Mr. Garen’s post, “Appearing on Fox Business Network’s Varney & Co. on Tuesday, Beyond Investing CEO Claire Smith discussed the fund with host Stuart Varney, [saying that] ‘We are taking out about 43% of the S&P 500,’ Smith said. ‘We are adding in some of the mid-caps that are more forward-thinking like Beyond Meat (BYND) and Tesla (TSLA), in order to make up some of the differentials in order to compensate for the things we are taking out.
[And, generally,] the Beyond Investing US Vegan Climate Index is a passive, rules-based index of U.S. large-cap stocks, screened according to vegan and climate-conscious principles.” End quote.
By the way, if, as an investor with closely held personal values, you feel uncomfortable with this and other fund options out there, there is another simple way to invest while more closely aligning your investments with your values. Check-out my one-hour DIY Ethical-Sustainable Investing Pays Tutorial. Go to investingforthesoul.com/podcasts and look down the right-hand sidebar for the link.
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Now, I often reference The Motley Fool as that site has some great contributors writing about ESG stocks, and again I want to draw to your attention some of their research. Appearing under the title, 3 Top Renewable Energy Stocks to Buy Right Now, three Motley Fool contributors review their picks. However, I’ll only quote two here as the third pick was already covered on my August 16 podcast – where Travis Hoium picked SunPower.
His two colleagues made new choices in addition to the ones they chose that appeared in my August 16 post. Rich Smith picked TPI Composites (TPIC: NASDAQ) and John Bromels chose TerraForm Power (TERP: NASDAQ).
Rich Smith commenting on TPI Composites said, “Shares of windmill blade-maker TPI Composites crashed hard in August after the company reported an earnings beat -- but also made a big reduction in its guidance. With roughly 40% of its production lines for windmill blades either still spinning up, or in the process of being retooled to produce new models, TPI's currently operating 30% under full capacity.
[However], from a loss this year, analysts forecast TPI will grow to earn more than $4 a share in just three short years… [and that] TPI Composites stock won't stay this cheap for long,” He says, end quote.
John Bromels has this to say about his choice, TerraForm Power. Quote, “[TerraForm Power] is a green energy stock that pays a dividend! Most renewable stocks… are too young and focused on growth (or just too cash-poor) to swing a dividend. But a handful of them -- mostly renewable yieldcos -- do offer dividends, and TerraForm Power's is one of the best, currently yielding about 4.6%... TerraForm looks like a buy for dividend investors and green energy fans alike.”
Incidentally, Wikipedia’s definition of a yieldco ‘is a company that is formed to own operating assets that produce a predictable cash flow, primarily through long term contracts.’
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Another Motley Fool contributor, Maxx Chatsko, wrote a related post, titled, 2 Top Renewable Energy Stocks to Buy in Wind Power. He likes, NextEra Energy (NEE: N) and Xcel Energy (XEL: NASDAQ), saying that they have a combined 25% of the installed wind power capacity in the United States.
Elaborating on these companies, he says, that, “NextEra Energy generated more electricity from the wind and sun than any other company in the world in 2018.” And, that, “Xcel Energy doesn't directly own nearly as much wind power infrastructure as NEE, but it leans on a mix of power purchase agreements (PPA) and direct ownership to support 9,300 megawatts of installed wind power capacity. It plans to increase that to 11,100 megawatts by the end of 2021.” End quote.
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Now, it’s becoming well known that millennials are eager for ethical and sustainable stocks. Addressing that issue, Awantika Poddar of Zacks wrote a piece titled, Top-Ranked Stocks Suitable for Millennials: 6 Picks – article also appearing on Yahoo! Finance. Though its recommendations are for millennials – I don’t see why many of them wouldn’t be applicable to most investors.
So, here are the six recommendations of Ms. Poddar. She writes:
“1) Keysight Technologies (KEYS: N) sports a Zacks Rank #1 and a Growth Score of A. The stock has returned 54.4% on a year-to-date basis. Further, the company has a long-term expected EPS growth rate of 10%.
2) Anixter International (AXE: N) flaunts a Zacks Rank #1 and a Growth Score of B. The stock has returned 10.7% on a year-to-date basis. Further, the company has a long-term expected EPS growth rate of 8%.
3) Cirrus Logic (CRUS: NASDAQ) has a Zacks Rank #1 and a Growth Score of B. The stock has returned 60.4% on a year-to-date basis. Further, the company has a long-term expected EPS growth rate of 15%.
4) Symantec Corporation (SYMC: NASDAQ) has a Zacks Rank #2 and a Growth Score of A. The stock has surged 23.4% on a year-to-date basis. Further, the company has a long-term expected EPS growth rate of 6.9%.
5) Microsoft (MSFT: NASDAQ) has a Zacks Rank #2 and a Growth Score of A. The stock has appreciated 35.3% on a year-to-date basis. Further, the company has a long-term expected EPS growth rate of 11%.”
And finally, “6) Alphabet (GOOGL: NASDAQ) has a Zacks Rank #2 and Growth Score of B. The stock has returned 13.1% on a year-to-date basis. Further, the company has a long-term expected EPS growth rate of 17.5%.” End quote.
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One of the great heroes of sustainable investing is Al Gore, the former US Democratic Party presidential candidate. He helped create Generation Investment Management, an investment firm to invest in sustainable companies. Well, Ryan Vanzo posted an articled on GuruFocus titled, Al Gore Loves These 3 Stocks.
The three stocks that Al Gore purportedly likes are, quoting Mr. Vanzo’s post:
“Jones Lang LaSalle Inc (JLL: N) [which] comprises 4.1% of Generation’s portfolio, but [is] more than 14% of the shares outstanding. Generation’s stake is worth nearly $600 million. Jones Lang LaSalle is a U.S.-based commercial real estate services firm… The stock trades at just 11.3 times forward earnings… [and] looks like a reasonably priced stock with a large moat.” End quote.
The second pick is, Acuity Brands Inc. (AYI: N), Quote, “Acuity Brands comprises 3.2% of Generation’s portfolio, but the firm owns roughly 8% of the entire company. Generation’s stake is worth around $460 million. Acuity is a lighting and building management firm. It’s based in the U.S. but has operations throughout North America, Europe and Asia. The stock trades at just 12.9 times forward earnings yet consensus estimates call for a 10.67% long-term annual earnings per share growth rate. This could be a bargain if growth estimates become reality.” End quote.
The third pick is, Nutanix Inc (NTNX: NASDAQ). Quote, “Nutanix is a new holding for Generation, currently comprising 2.6% of the portfolio. The stock is down 42% on the year, so don’t be surprised if the firm adds to its position if the valuation continues to fall. Generation now owns 7.7% of the company. That’s a $375 million position, nearly 10 times the daily trading volume. Nutanix is a cloud computing software company that sells ‘hyper-converged infrastructure appliances and software-defined storage.’ Over the last five years, revenues have grown by an astounding 57% per year. Year-over-year, however, sales growth has slowed to just 7%. That’s caused a steep sell-off in shares.
Part of the issue seems to be a misunderstood pivot to subscription and SaaS [software as a service] revenue streams… Revenue growth slows as customers are transitioned to the cloud, but long-term retention and profitability may rise. Generation seems to be capitalizing on the temporary confusion.” End quote.
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So, these are my top news stories and tips for ethical and sustainable investors over the past two weeks.
Again, to get all the links or to read the transcript of this podcast and sometimes get additional information too, please go to investingforthesoul.com/podcasts and scroll down to this episode.
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Now, a big thank you for listening.
Come again! And my next podcast is scheduled for September 27. See you then. Bye for now.
© 2019 Ron Robins, Investing for the Soul.
