Top Penny Stocks To Watch If Energy Is Your Focus
Whether you’re looking for green energy penny stocks or ones dealing with oil and gas, the sector as a whole is hot right now. The Biden Administration has set out to build a “green energy future,” so of course, we see alternative power companies taking off in 2021. However, something to remember is that even with this as the goal, infrastructure still needs to get built. The quickest and easier accessible power source still involves traditional fossil fuels and natural gas. While the longer-term implications of the future of oil & gas are still unknown, the near-term prospects are still bright.
Something else that we’ve seen is a transition of some of these energy companies. Many are beginning to include renewables and alternative energy solutions in their product mix. One of these companies that we’ve discussed in light of a pending acquisition is Torchlight Energy Resources, Inc. (NASDAQ: TRCH). It was a traditional oil and gas company up until the end of 2020.
The company inked a deal with Metamaterial to combine. The pending merger is expected to close, with Metamaterial holding 75% equity interest in the new company. Metamaterial is actually a cleantech company with a technology used for solar energy instead of oil and gas. This is just one recent example of oil and gas companies getting ahead of this green energy initiative.
The Future Of The Energy Stocks
But again, this doesn’t necessarily mean an end to fossil fuels entirely. Prospects of another economic stimulus, as well as new infrastructure packages, would likely boost demand for fossil fuels in the near-term.
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Some industry consultants are optimistic about a green focus and its impact on fossil fuels. Rystad Energy explained earlier this year, “Any ‘green’ focus of the infrastructure bill will be mostly additive to overall short-term oil products demand due to construction activity, with risks mostly limited to medium-term oil demand, depending on the scope and success of the projects.”
Rystad further explained that “If the Democrat plans bear fruit, we expect that demand could rise by an additional 350,000 BPD for 2021 and 900,000 BPD (including a China tariff cancellation impact* of 300,000 BPD) for 2022 relative to the status quo.”
Energy Penny Stocks To Watch
So, in an interesting twist of fait, at least in the short term, both green energy and oil & gas could be in the spotlight. With this as the case, will some of these energy stocks be on your list this week?
- Energy Fuels Inc (NYSEAMERICAN: UUUU)
- Nexgen Energy Ltd. (NYSEAMERICAN: NXE)
- Ring Energy Inc. (NYSEAMERICAN: REI)
- Tantech Holdings Ltd. (NASDAQ: TANH)
Energy Fuels Inc.
You may recall Energy Fuels in some of our other energy penny stock articles. The company is one top uranium stocks that traders have been watching for months. Aside from Energy Fuels being the largest uranium producer in the U.S., one of the bigger reasons for this is based on the government’s push for securing stockpiles.
Increasing demand for uranium in the U.S. as part of a national strategic reserve boost. This helped bring focus to uranium stocks. In December, the U.S. Senate Committee on Environment and Public Works approved a bill that would increase the U.S. stockpile of uranium. Since then, the production of nuclear ore has grown.
Something else to note, aside from the industry catalysts, is what’s going on internally. A series of Form 4s was filed over the last few weeks of January. This showed share acquisitions by company leadership. What’s more, is that early last week, a Schedule 13G showed strong institutional interest building as well. BlackRock, Inc. reported a 5.2% stake in Energy Fuels.
Nexgen Energy Ltd.
Another one of the energy penny stocks to watch is Nexgen Energy. We discussed this company last month as it has continued along with its multi-quarter bull trend. The NXE stock price reached highs of $3.72 this month, marking a move of over 500% in less than 1 year. What’s become such a strong catalyst for this move? Interestingly enough, Nexgen also focuses on Uranium production.
While the same broad-spectrum influences helped drive NXE stock, other factors have recently come to light. Famed Asian investor Li Ka Shing reported a 12.2% stake in the company in January. Analysts have also grown more bullish on the stock. For example, both Raymond James and Canaccord Genuity boosted their price targets to $5 last month. Right now, Raymond James has an Outperform rating on the stock, with Canaccord giving a Buy.
Ring Energy Inc.
Along the lines of your traditional oil and gas companies, Ring Energy has gained ground this year. In fact, since the start of 2021, shares of REI stock have jumped as much as 182% following Friday’s post-market action. The penny stock jumped to highs of $1.85. This move comes as energy stocks have gained more attention this year. Ring had a tough year last year, dropping from over $3 to lows of $0.43. The last few weeks have seen some of the biggest upward momentum in months.
One of the key factors, in my opinion, is Ring’s new focus on consolidating operations and focusing on its key projects. In particular, the company just relocated its headquarters and closed or downsized some of its operating offices outside of the greater Houston area.
Similar to Nexgen, Ring has also attracted interest from the institutional community. Empery Asset Management reported a 9.99% stake in the company last week. But even with these cost-cutting initiatives, analysts haven’t been overly bullish on the stock. The majority of ratings on the stock are a Hold or equivalent. But considering the latest momentum in REI, will it be one of the energy stocks to watch in the near-term?
Tantech Holdings Ltd.
Tantech has been somewhat of a chameleon in all of the energy industry hype. Not only does it offer things like bamboo charcoal, but it also has a hand in the electric vehicle space too. Last week, in fact, the company announced that its subsidiary, Zhejiang Tantech Bamboo Charcoal Co, was selected for an international standards creation. Wangfeng Yan, CEO of Tantech, said that “we have seen a steady increase in usage for bamboo charcoal as countless products and innovative applications have been developed across environmental and green sectors.”
The company also recently launched its Variety Combination Honeycomb Activated Carbon product. It’s an activated carbon able to reduce odors and pollutants, including the adsorption of formaldehyde and benzene and industrial gas purification. This product is for things like indoor air purification and low concentration factory organic waste gas.
Then you’ve got the electric vehicles side of the company. Last year, Tantech announced the launch of a new driverless and fully autonomous street sweeper. This was through its Shangchi Automobile Co., Ltd. subsidiary. Wangfeng Yan, Chief Executive Officer of Tantech, explained, “Our latest driverless and autonomous street sweeper, the Shangchi SC-100A, was successfully developed by our newly established R&D team on electronic vehicles in Lishui…We are particularly excited about this model given the integration of AI/deep learning for route learning and satellite positioning, with advanced sensor processing technologies for human and object anticipation and avoidance.”
Different Energy Penny Stocks To Watch
The bigger conversation isn’t only about green energy or only about oil & gas. This year we see somewhat of harmony between the two very different industries. With near-term prospects suggesting a bullishness based on a “Biden Boost,” will the trend unfold as analysts expect, or will one niche prevail over the other sooner?