Clean Tech

Why many clean tech stocks are outperforming

Fri 03 Jun 22, 4:47pm (AEST)
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Key Points

  • Australian Vanadium
  • Renascor Resources
  • Cobalt Blue Holdings

Global clean energy stocks are soaring as the Ukraine war and Russian sanctions hit oil and gas supplies, and closer to home local clean tech stocks are likely to get an added kicker from the new Labor government’s plans to recommit to renewables.

However, what’s often overlooked is the size of the local clean tech sector and the number of stocks within it, plus recent government funding to advance strategically important projects.

Clean Tech index

One measure of the local clean tech sector is the Clean Tech (DACT) Index which comprises 87 companies (market cap $91bn) across 15 subsectors.

Despite heightened short-term volatility, the 12-month performance of the DACT remains strong, with an 11.9% gain compared to the ASX200 10.4% gain.

But to get a better picture of the resilience and development within the cleantech sector it pays to look at its performance over the longer-term. For example, The DACT experienced a 48.2% growth over the past three years and 71.5% growth over the past five years.

By comparison, the ASX200 experienced a 19.9% three-year growth and 36.0% five-year growth.

3 sustainable minerals stocks to receive a leg-up

Due to value falls within sub-indices covering Water and Efficiency & Energy Storage the DACT Index fell by -8.2% during the first quarter of 2022 compared to its growth of 15.5% in the previous quarter.

However, three stocks within the sustainable minerals sub-sector: Australian Vanadium Ltd (ASX: AVL), Renascor Resources (ASX: RNU), and Cobalt Blue Holdings Ltd (ASX: COB) are up 100%, 164%, and 134% respectively over the past 12 months.

Equally encouraging, these three small-caps have continued to outperform in 2022, with the share prices up 182%, 100%, and 69.70% in the March quarter respectively.

Here’s a quick snapshot into each of these stocks.

Australian Vanadium: Market cap $164m

Consensus does not cover this stock.

Based on Morningstar’s fair value of $0.08 the stock appears to be undervalued.

The share price received a kicker mid-March following revelations it had been awarded a $49m grant from the Australian government to support the development of the Australian Vanadium Project near Meekatharra and Geraldton, to create an Australian green fuelled vanadium industry.

The share price was up 5% at the close today at $0.042.

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Australian Vanadium share price over 12 months.

Renascor Resources: Market cap $495m

Consensus does not cover this stock.

Based on Morningstar’s fair value of $0.33 the stock appears to be undervalued.

Between early January 2022 and 9 February the share price jumped from around $0.16 to $0.35 after Australian government approved a $185m Loan Facility to Fund the development of the Siviour Graphite Project.

Renascor aims to become a world leader in the sustainable production of 100% Australian-made advanced graphite product for use in the lithium-ion batteries fuelling the electric vehicle revolution.

The share price was up 8.10% at the close today to $0.227.

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Renascor Resources share price over 12 months.

Cobalt Blue Holdings Ltd (COB): Market cap $259m

Consensus does not cover this stock.

Based on Morningstar’s fair value of $1.05 the stock appears to be undervalued.

The share price jumped from around $0.47 late February to $1.06 early April after being awarded $15m by the Australian government for the Broken Hill Cobalt Project (BHCP).

Funding is being used to accelerate the development of the BHCP by expanding the scope of Feasibility Studies, bring forward infrastructure and services work packages, and decrease start-up commissioning risks.

The share price was up 2.53% at the close today to $0.81.

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Cobalt Blue Holdings share price over 12 months.

Written By

Mark Story

Editor

Mark is an investigative financial journalist and editor who started his career working for Marathon Oil in London. He has a degree in politics/economics and a diploma in journalism. Mark has worked on 70-plus newspapers and financial publications across Australia, NZ, the US, and Asia including: The Australian Financial Review, Money Magazine, Australian Property Investor and Finance Asia. Mark is passionate about improving the financial literacy of all Australians through the highest quality content. Email Mark at [email protected].

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