These Two Stocks are the Real Winners from Trump's Paris Decision

These Two Stocks are the Real Winners from Trump’s Paris Decision

by | published June 6th, 2017

Last Thursday, June 1, President Trump announced that he is taking America out of the Paris Climate Accord.

You might think this doesn’t matter much. After all, energy stocks barely moved on the news, and the President has already been revoking environmental regulations.

But the truth of the matter is, this change in priorities means that America is giving up on being the leader in the fastest growing sector of the energy industry – wind and solar.

Other countries are already filling the void, with China and the European Union announcing a new partnership in energy technology. In other words, more investment.

Here are the two companies that will profit most…

Why the Paris Accord Withdrawal Matters – in the Long Run

Now, the main reason for the lack of a market reaction to America pulling out of the Paris Accord is simple: the Accord itself did not require the U.S. to do anything.

Any commitments were voluntary (as was the funding provided to developing countries), and there was no mechanism by which the UN or anyone else could enforce them.

Even before the withdrawal, America wasn’t on track to reach its goals anyway. So Trump is withdrawing from voluntary commitments that we weren’t going to meet anyway.

You can see why the markets reacted calmly.

Solar and wind power will remain to be competitive on price both here in America and abroad.

And despite the many promises being made, coal is not coming back. The shale revolution has lowered the cost of natural gas so much, coal simply cannot compete…

Especially with a new coal plant costing twice as much as a comparable natural gas plant.

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But in the longer term, withdrawing from the Paris Climate Accord means that America is giving up leadership in renewable technology…

China and Europe are already filling that void…

These Two Companies Will Benefit Most

Even before Trump had officially made the announcement, China and the European Union started negotiations over a new partnership to speed up the development of renewable power.

And now that America’s intent to withdraw is official, development and most importantly investment in these technologies – mostly wind and solar – will move from America to those regions.

Some select U.S. renewable energy companies may still break through on occasion, but the international sector will now move to solar and wind faster than the U.S.

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Chinese and European companies will lead the way. Chief among them will be the global leaders in solar and wind…

And as veteran readers will recognize, they both happen to be some of my favorite energy companies.

In wind, the leader – and main beneficiary of America’s withdrawal from the Paris Accord – will be Denmark’s Vestas Wind Systems AS (VWDRY).

Not only is Vestas Wind the leading wind turbine maker in the world, and has access to direct government support, but it also supplied a whopping 43% of new wind power plants installed in the U.S. in 2016.

That’s up from 33% the year before.

Vestas even beat out the giant General Electric Co. (GE), which came in at 42% – a decrease from over 50% the year before.

Now, as the U.S. retreats from leadership in new energy technologies, Vestas will be benefitting from more global support than American competitors like GE.

Meanwhile, for solar, look to China’s JinkoSolar Holding Co. Ltd. (JKS). This is the premier solar company in the world, and the third-largest supplier by capacity.

With global operations and good relations with the Chinese government – where solar power capacity equivalent to more than 30 nuclear reactors was installed last year – Jinko is perfectly positioned to continue growing…

Remember, just because leadership in this sector is moving abroad doesn’t have to mean that you as an investor lose out. In the energy market, there’s always a way to profit.

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  1. public servant
    June 7th, 2017 at 09:53 | #1

    JKS fell from $29.50/share on 12/21/15 to $13.27/share on 11/7/16. In other words the value of the company fell over 55% under the last year of the Obama regime.

    Since Trump was elected, JKS has recovered somewhat to $17.90 as of today, 6/7/17, a gain of 35%.

  2. Barry Craig
    June 10th, 2017 at 15:04 | #2

    It would be nice to see some options on these two stocks

  3. Douglas White
    June 11th, 2017 at 10:22 | #3

    Absolutely amazing looking forward to the new energy source

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