Despite a black day for resource stocks and the general S&P/ASX 200 index – which fell 2% – investors shouldn't be surprised to see a number of stocks soaring.
Clean energy stocks are going to be in hot demand over the next few days as investors try to make a quick buck in the aftermath of a successful resolution to the climate change talks in Paris over the weekend.
Here were the biggest risers today:
Smartgroup Corporation Ltd (ASX: SIQ) skyrocketed 27.8% to $4.87 after the company announced a 24% increase in revenue, a 49% increase in net profit, and the acquisition of Advantage Salary Packaging which will deliver further growth in coming years. Smartgroup now looks to be the most expensive of its salary packaging peers, although strong growth is expected to continue.
Infigen Energy Ltd (ASX: IFN) rose 4.6% on no news, although it appears as though investors are buying into this wind farmer in the anticipation of making gains as the demand for renewable energy rises. While Infigen looks to be trading around fair value, it could be a sound investment for patient, long-term investors looking to be eco-friendly.
EVOLUTION FPO (ASX: EVN) rose 6.2% to $1.46, while fellow miners St Barbara Ltd (ASX: SBM) and Regis Resources Limited (ASX: RRL) also rose more than 5% as global volatility spooks investors. Gold traditionally rises in times of volatility, although as I have written before, the value of gold as a hedge against market movements is dubious at best.
Finally, shares in tiny microcap Environmental Clean Technologies Ltd. (ASX: ESI) also soared 26% today after the company announced government approval to proceed with the usage of its patented low-emission MATMOR iron making process in India. While a positive for the company, it still has a long way to go to achieve profitability.
The main advantage, other than the significant reductions in CO2 generated during production of the crude steel via Matmor technology, is the much lower cost of the reductant used to convert iron ore to "pure" iron.
While Iron ore prices are indeed extremely low, and the technology is able to derive value from using lower grades or ore (fines, which sell at a discount), the different type of reductant (lignite vs coking coal) is the main source of competitive advantage.
