Bank of America Analysts Explain How To Profit From A Shift To Efficient Energy

A recent report by Bank of America focused on investment themes for a changing world. One of the areas that the report identified as a source of change is energy efficiency. Primary energy demand already makes up 7 percent of worldwide GDP, and Bank of America analysts expect energy demand to grow by 40 percent by 2035.

With the huge inevitable demand for energy coming, it is unlikely there will be a single solution. Analysts believe that clean coal, gas, nuclear energy, renewable energy, and increased energy efficiency will all contribute to the energy dynamic in the future. The report states that energy efficiency alone could cut in half the amount of energy required worldwide by 2035.

Since 80 percent of energy is lost along the value chain, there is plenty of opportunity for improvement when it comes to efficiency. Bank of America anticipates up to $14 trillion will be invested worldwide in energy efficiency by 2035.

Analysts see eight different ways to invest in the blossoming energy efficiency sector:

1. Autos
2. Buildings
3. Industry
4. Data storage
5. Lighting
6. The Internet of Things (smart devices)
7. Smart grid
8. Transportation (buses, trains, planes)

The stocks that Bank of America recommends as a means to capitalize on the opportunities in the world of efficient energy include the following:

• Magna International Inc MGA, maker of lightweight, efficient auto engine components
• BorgWarner Inc BWA, producer of efficient auto turbochargers and emission systems
• Hexcel Corp HXL, the top U.S. producer of carbon fiber
• ARM Holdings PLC ARMH, designer of low-power chips
• Tenneco Inc TEN, manufacturer of emissions control systems
• Salesforce.com Inc CRM, provider of efficient cloud computing platforms
• Dana Holding Corp DAN, provider of advanced thermal management services and manufacturer of fuel cells

Regardless of what becomes the world’s new primary energy source, efficiency will certainly play a role in the future of the industry. Bank of America believes that savvy investors can profit off of this growing field.