Clean energy fuels stock becomes next Reddit meme target
Clean Energy Fuels stock jumped 30% yesterday — as one of the most discussed stocks among Reddit communities. CLNE is a natural gas distributor in the transportation industry with over 550 refueling stations across the US/Canada.
What’s the big deal (memes aside)? It’s a classic clean energy story. 10 years ago, natural gas replaced coal as America’s top electric power source. Moving along with the trend, CLNE transitioned the majority of its vehicle fuel sales from classic natural gas to renewable natural gas (RNG).
The recent emphasis on clean energy put a spotlight on CLNE’s clean energy ties:
- In late 2020, CLNE soared over 500% in 3 months as the US election unfolded and Biden took control of the White House.
- Since peaking in Feb, its stock fell 60% — until the Reddit community took over the stock.
The bigger question: Is RNG the way to go? In recent years, energy sources like electricity and hydrogen have become viable options to power the transportation/trucking industry — some of which are arguably better for the environment. But which is better?
- Cost: Solar and wind costs are already below gas plants.
- Investment required: Governments are faced with the decision of building out infrastructure for RNG or cleaner alternatives like solar/wind.
According to S&P Global, analysts expect a national clean energy standard to accelerate natural gas’ decline in favor of other renewable energy.
Clean Energy Fuels Stock
The Joe’s take: CLNE’s sales and profits were flat for the past 5 years. Although it won a contract to supply fuel for Amazon’s trucks in April, the deal was quickly shot down by Raymond James’ analyst — saying the deal lacks “substance”.
For now, CLNE is a speculative stock that’s run-up beyond its fundamentals. Be careful when you play with gas — you just might get burned.