US midterm polls: 3 stocks to watch irrespective of winner

Highlights:

• Tesla, Inc's solar deployments surged 13 per cent YoY in Q3 FY22.
• Montauk Renewables’ Q3 FY22 earnings are slated to release on Wednesday, November 9.
• The ORA stock touched its 52-week high on November 7.

Many observers of the midterm polls are considering it to be a fossil-fueled battle between the two parties. According to some experts, most of this year's election is centered on economic health and soaring inflation.

Meanwhile, energy prices have increased significantly in recent months. Russia’s invasion of Ukraine created pressure on consumers and significantly contributed to the still-high inflation.

On the other hand, Fed's aggressive stance to bring down the inflation under their two per cent target range also weighed on consumers' spending. The central bank increased borrowing costs at its highest pace in about four decades.

Now, with the midterm elections in focus, several investors might keep a close track of the performance of the clean energy sector. While some sectors, mainly the defense, tend to remain stable regardless of the election results, some sectors like cannabis, clean energy, etc., might witness some policy changes depending on the results.

Several observers were anticipating that the Republicans might take control of the House of Representatives, and most likely the Senate also. However, early trends on Wednesday, November 9, indicated that there's no 'red wave' as it was anticipated earlier.

As climate change remains a key issue, it is highly unlikely that the Republicans would make drastic changes in the bills passed to reduce the carbon footprint.

Some clean technology and energy investors might be worrying over some drastic changes, especially to the climate-heavy Inflation Reduction Act (IRA). However, even if the GOP wins the house, they will still require an overwhelming margin to reverse and replace the IRA. They would need at least a two-thirds majority in both the House and Senate to reverse or replace the act.

For the uninitiated, IRA is a tax-friendly policy, introduced to incentivize clean-energy practices. The IRA involves several tax benefits for homeowners focusing on renewable energy like solar, wind, etc., electric vehicle or EV buyers, etc.

The recently passed climate bill by President Joe Biden involves several long-term incentives for enhancing the adoption of clean-energy alternatives. Meanwhile, no Republicans have shown their support for the bill, but some are also anticipating that the bill would not come under serious harm even after the midterm poll.

However, most taxpayers haven't yet enjoyed the tax benefits from the IRA and would have to wait until they file their tax returns for 2022. But considering other chances, like if the Democrats attain a surprising victory, the sector may get a boost.

Amidst all the latest developments, let's discuss some clean technology and energy stocks, which include Tesla, Inc. (NASDAQ: TSLA), Ormat Technologies, Inc. (NYSE:ORA), and Montauk Renewables, Inc. (NASDAQ:MNTK), and see how they tackled the market uncertainties in recent quarters:

Tesla, Inc. (NASDAQ:TSLA)

One of the leading EV makers and clean energy companies, Tesla Inc's stock noted a significant drop this year, amid severe pressures on the mega-cap growth stocks.

The TSLA stocks were down over 44 per cent YTD and 51 per cent YoY, and it touched its 52-week low of US$ 196.66 on Monday, November 7 this year.

Tesla Inc's revenue in Q3 2022 was US$ 21.45 billion, and its shareholder's attributable GAAP income was US$ 3.29 billion. The revenue rose by 56 per cent, while the net income soared 103 per cent, on an annual basis in the quarter.

The EV maker's solar deployments rose 13 per cent YoY to 94 MW in Q3 FY22, which it said to be among the strongest quarterly results in recent years.

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Ormat Technologies, Inc. (NYSE:ORA)

The major renewable energy firm, Ormat Technologies' revenue increased by 10.7 per cent YoY to US$ 175.9 million in Q3 FY22, driven by the continued growth in its leading electricity segment. Its energy storage revenue was up 56.2 per cent YoY to US$ 8.8 million in the quarter.

Meanwhile, the shareholders' attributable income of the renewable energy company rose 21.5 per cent YoY to US$ 18.1 million in Q3 FY22. Meanwhile, the alternative and renewable geothermal energy technology supplier's stock reached its 52-week high of US$ 101.36 on November 7, 2022.

Montauk Renewables, Inc. (NASDAQ:MNTK)

Montauk Renewables is a fully integrated renewable energy company with a P/E ratio of 64.68. The company specializes in managing, recovering, and transforming biogas into renewable energy.

Montauk has scheduled its Q3 FY22 earnings release on Wednesday, November 9, at 5:00 pm ET. In Q2 FY22, the renewable energy firm's revenue jumped 114.3 per cent YoY to US$ 67.9 million, and its net income soared 511.7 per cent YoY to US$ 19.2 million.

Bottom line:

US President Joe Biden has still two years remaining in his term, even if the Republicans take over the House and Senate. Although they might bring some major roadblocks to the policies introduced by the Biden Administration, the President would still have the advantage of his veto power.

The clean energy sector has gained notable traction lately, due to the mounting concerns over climate change globally. Several global leaders have taken initiatives to promote clean-energy practices.

In addition, consumers are also shifting their focus to the sector, given the higher energy prices, especially due to the Russia-Ukraine war.