Nordic Impact Stocks 2024: No green returns but what will Trump’s impact be for 2025?

Nordic impact stocks had a lackluster 2024, with only one stock delivering a return above 100%. The average return was -28.2% and thus back-to-back negative returns to the investors, as 2023 delivered a -28.9% return. M&A activity (delistings) created some of the highest returns, and with many impact stocks still trading at low valuations, the M&A trend may well be where the highest returns are to be found in 2025.

Just one impact stock with a return above 100%

In 2024, the average return was -28.2% vs. -28.9% in 2023. Only one Nordic impact stock increased by over 100% compared to 2 stocks in 2023. The top 10 stocks delivered an average return of 62% vs. 88% the year before. Finally, the percentage of stocks with a positive return was 24% compared to 21% the year before.

Notably, the best impact stock in 2024 ended up being the nearly bankrupt company AEGA which rose from NOK 0.0078 to NOK 0.35 in the last month of the year, corresponding to 4387% percent with a total return in 2024 of 175%. The sharp increase in the share price was due to a restructuring and name change to Nordic Financials ASA.

The list of the year’s best stocks includes several acquired companies, including Volue and Everfuel. Volue, which provides data solutions for the green transition, delivered a 96% return after being acquired by Arendals Fossekompani, Advent International, and Generation Investment Management. Furthermore, Danish Everfuel, which owns and operates hydrogen infrastructure, was acquired by Swiss Life Asset Management. The acquisition trend is generally seen not only among impact stocks but also on the growth exchanges, where several stocks became so cheap that larger players saw value in acquiring their technologies and solutions rather than their (negative) cash flow.

Overview of the 10 best Nordic impact stocks in 2024

Energy sectors with high returns – the rest without noteworthy returns

In 2024, the energy-focused sectors delivered high individual stock returns, while the rest did not deliver particularly impressive individual stock returns, although the other sectors also consist of significantly fewer stocks than the energy-focused sectors. The energy-focused sectors delivered single stock returns of 96-175%. For the other sectors, returns were as low as 14% in the Mobility sector, where Donkey Republic was the only stock with a positive return.

Overview of the best Nordic impact stock in each sector

Every sector with a negative return – ouch!

In 2024, every sector declined. Energy Production & Storage delivered the best return, but it was still negative at -8.2%. On the other hand, the Energy Production Equipment & Services sector was almost cut in half with -49.2%. The difference between the two energy-related sectors is quite significant and can be hard to explain although the latter is more exposed to newer technologies and higher uncertainty vs. the more stable and predictable sector of production & storage. The two companies that explain this difference well are Ørsted and Vestas. Ørsted is developing and operating offshore wind parks, while Vestas is the one equipping the wind parks with cutting edge wind mill solutions. Two different businesses and two significant outcomes in 2024. Please note that, on average, more companies are developing new technologies in the equipment-related sector as an explanation to why it has underperformed so much.

Overview of the average return for each impact sector in 2024

Mergers and acquisitions characterized 2024 – will it continue?

In 2024, many of the greatest returns were created by mergers and acquisitions. Volue and Everfuel have already been mentioned. OX2 AB, a developer of onshore and offshore wind power, solar power, grid connections, energy storage, etc. was acquired by the Swedish private equity giant, EQT AB. ChromoGenics AB was also acquired by Färna Invest AB leading to a delisting, and in February Viridor gained full ownership of Quantafuel. Finally, Texel Technologies also completed its acquisition of all technology assets in Swedish Stirling. In other words, it was a year with high M&A activity, and investors should not be surprised to see similar activity in 2025.

Trump and Impact Outlook

We believe that Trump’s shift from a green agenda to a black one will negatively impact Nordic impact stocks. First and foremost, Trump’s approach increases uncertainty, which in turn raises risk. Higher risk leads to lower investor interest in R&D-intensive, cash-burning companies. As a result, companies still in the research or development phase will face unfavorable market conditions.

With Trump pushing for lower energy prices in conjunction with a war on renewable energy, it is difficult to expect anything but a negative global effect on both a political scale and on a company level when it comes to renewable energy and the green transition.

The most promising outlooks are therefore within Food & Beverage, Waste Management, and the Mobility sector. Waste management, in particular, stands out as a sector with strong potential to withstand the current turmoil. 2024 was a challenging year for investors, but revenue-generating companies may prove to be the best investment opportunities this year.

The Waste Management sector consists of 20 stocks that have yielded a 1% return year-to-date.

Overview of the stocks in the Waste Management sector and the year-to-date returns

Sources: Workspace by LSEG, EIKON, Nordnet, and illustration by Nadya Nickels.

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