PBD: Clean Energy Has An Expensive Price (NYSEARCA:PBD)

iantfoto/E+ via Getty Images Investment Thesis In my last article on the Invesco Global Clean Energy ETF (NYSEARCA:PBD), I discussed how lofty valuations would likely be a drag on future returns, despite solid growth prospects for a large number of constituents. Since then, PBD lost ~22% vs a loss of ~10% for the S&P 500 and has clearly underperformed the market. ESG stocks are now cheaper than 6 months ago, but PBD is still trading at over 20x earnings, which makes it overvalued from an absolute perspective. On top of that, flows are leaving ESG stocks and going into the cheaper traditional energy sector, which is the main winner year-to-date. Given the fact that traditional energy stocks continue to be attractively valued on a relative basis compared to renewable energy stocks, I expect PBD to underperform as investors will choose the cheaper alternative. What Has Happened Since My…

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