What is an ESG stock you ask? It’s a new acronym for ‘environmental, social, and governance’ companies. This is a big trend with the new wave of investors. Social responsibility is a higher priority for investors seeking companies to place their bets on than it once was.
And place their bets they have, according to Morningstar, ESG related funds went from $5.4 billion in 2018 to $21.4 billion in 2019. That’s serious growth, but nothing compared to last year’s whopping $51.1 billion. You don’t see many industries grow over 100% on a year-to-year basis.
If you are looking to take advantage of this staggering growth, there are several ESG ETFs (say that three times fast) that are worthwhile investments. However, they do not offer the short-term moonshot potential found in penny stocks, which is most likely why you clicked on this article in the first place.
There are three ESG penny stocks in particular that hit our scanners for several reasons, and should be on your watchlist:
- Eco Depot Inc. (OTCMKTS:ECDP)
- SunHydrogen, Inc. (OTCMKTS:HYSR)
- CBAK Energy Technology, Inc. (Nasdaq:CBAT)
Eco Depot, Inc. (OTCMKTS:ECDP) through its subsidiary Bronya Climate Shield produces a line of environmentally friendly paints that can reduce energy costs inside of most structures by up to 40%. The company’s products have recently received endorsement from the Federation of Latin American Cities, Municipal, Associations (FLACMA). This is a huge endorsement because part of FLAMCA’s directive is ensuring corporate support to meet clean energy 2030 SDG initiatives.
While ECDP’s story is interesting, what makes it worth putting on your radar is the stock’s current price. Trading around $1.60, ECDP is well off of its 52-week high of $3.48 and close to its support at $1.43 which it catapulted off of at the beginning of May bringing investors up to 86% gains in a very short period. The chart looks set up nicely for another bounce of similar nature and is why ECDP tops my list today.
SunHydrogren, Inc. (OTCMKTS:HYSR) develops technology to produce renewable hydrogen using sunlight and water, the company recently announced an agreement to work with German company Schmid Group and Colorado-based InRedox to scale up its technology commercially. Schmid is developing the process and equipment for manufacturing while InRedox is focused on the electrochemical process of creating nanoporous templates on transparent substrates for growing nanoparticles.
Much like ECDP, and you’ll notice a theme with these stocks, HYSR is well off of its highs. Starting in November and peaking in late January the stock ran from $0.025 to $0.264 for an incredible 956% gain. Since then the stock has dropped to its current price of $0.075. The selling looks to have leveled off and because the stock has run with such ease recently, it’s worth putting on your watchlist for another move.
CBAK Energy Technology, Inc. (Nasdaq:CBAT) unlike the others on this list is actually up 360% over the past 12 months. But, it makes our list because it has retraced nearly 50% off of its $8.28 high and could see some auto-trades kick in soon. Fundamentally, the company looks sound, in April CBAT reported a net revenue increase of 69.3% to $37.6 million from $22.2 million in fiscal 2019. Profits also increased to $2.7 million from $600k in the fiscal year 2019 improving the company gross margin to 7.2% from 2.8% over the same period.
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