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Is Renewable Energy the Defensive Stock Opportunity You're Missing

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At the end of 2018, many stocks were slumping amidst bearish market action.

However, certain stocks and sectors were able to capitalize on underlying secular trends that proved resilient to such market moves and remain gainers into 2019.

One such stock was American Superconductor (AMSC) - Get American Superconductor Corporation Report , a stock that doubled as the market took a downturn and marked nearly a 300% increase from its 2018 lows.

He credited the shift in high population nations to more renewable energy as a growing market that could continue to bloom as oil falls out of favor with many on environmental grounds.

"We are tapping into that renewable energy market where we play mostly in renewables for wind really is in the developing world countries like India," AMSC CEO Daniel McGahn explained. "We've helped to create top tier players in the wind market. They use our turbine technology and then they buy the controls and software over and over again. We think our model is kind of similar to Intel (INTC) - Get Intel Corporation Report and Microsoft (MSFT) - Get Microsoft Corporation Report for wind turbines."

He added that his company has been able to cash in on Navy contracts as military spending under President Trump and expects that revenue stream to sustain as the Navy outfits its fleet.

Big Trouble in Little China

Yet, one issue that was not able to escape secular trends and has shown the other side of the political coin in contrast to the military spending, is the Sino-American trade war. The impact of the spat has impacted nearly every industry, especially tech.

The pain in markets has left investment officials calling for at least a tepid solution in the near term.

"There is pressure on the U.S. and Chinese governments to find a solution," Wilmington Trust CIO Tony Roth told TheStreet. "That doesn't mean it has to be an overly substantive solution, but it needs to allow both sides to say they've reached a deal and walk away from the deal.

He indicated that even a non-substantive deal would suffice for investor sentiment in the shorter term. That view was certainly vindicated by the afternoon trading reaction.

That isn't enough for AMSC Daniel McGahn, a company that recently won an intellectual property dispute with Chinese wind energy provider Sinovel Wind Group.

"We had pretty large cases over in China," he explained. "We're probably unique in that we've actually won an IP case with China."

McGahn explained that a substantive solution is paramount moving forward.

"I think it's clear that the climate has to change," he said. "There has to be repercussions for actions...there really needs to be better safeguards and protection to keep the IP sacrosanct."

To hear McGahn's full comments, check out the interview above.

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