6 days Ago By [email protected] (Daniel Foelber, Scott Levine, and Lee Samaha)
It takes courage to buy beaten-down growth stocks during a stock market sell-off. But long-term investors know that it's better to focus on where a company could be several years from now than get too caught up in short-term fluctuations in stock prices. Archer Aviation ( ACHR 3.
13% ) has sparked excitement from investors interested in technology and electric vehicles (EVs). But the company is still a long way from being consistently profitable. Industrial automation and robotics giant Rockwell Automation ( ROK 1.
77% ) has seen its valuation fall to compelling levels. Exchange-traded funds (ETFs) offer investors diversification and the ability to own several stocks under one ticker. The Invesco WilderHill Clean Energy ETF ( PBW 1.
36% ) could appeal to bold investors interested in small-cap clean energy companies beyond Archer Aviation. Here's why both stocks and the ETF are worth a closer look in April. Now's the time for growth investors to land Archer Aviation in their portfolios Scott Levine (Archer Aviation): Although roiling markets may be rattling some investors' nerves and motivating them to load up on defensive positions, those with higher thresholds for volatility are turning to growth stocks like Archer Aviation.
With shares of the electric vertical takeoff and landing (eVTOL) company plunging about 33% this year (as of this writing), Archer stock looks increasingly attractive -- especially with the company's recent successes finding new partners and progressing toward the requisite Federal Aviation Administration (FAA) certifications. Archer is continuously attracting customers for when its aircraft are ready to take flight. Most recently, it announced a deal valued up to $30 million with Ethiopian Airlines.
Archer will provide its Midnight aircraft as well as pilots to Ethiopian Airlines, which will, in turn, provide air taxi service to customers. This follows a similar deal it inked with Abu Dhabi Aviation two months ago, which will also see a deployment of Midnight aircraft to operate in the United Arab Emirates. In the U.
S., Archer has signed noteworthy deals with industry leaders such as United Airlines , which has agreed to purchase up to $1.5 billion of Midnight aircraft and a deal with Southwest Airlines to develop air taxi routes in California.
And it's not only the civilian market where Archer aims to take hold. In late 2024, the company announced a partnership with Anduril to explore the development of a vertical takeoff and landing aircraft for defense purposes. After receiving the Part 141 certificate from the FAA enabling it to begin training pilots, Archer is assembling its application for Part 142, the final certification it needs before it can start commercial operations -- a milestone it expects to achieve this year.
For those willing to ride out some turbulence, Archer is a compelling growth stock that deserves serious attention right now. Despite near-term headwinds, the long-term growth opportunity is significant Lee Samaha ( Rockwell Automation ): Investors need to get used to the idea that the motivation behind the tariffs is here to stay, which could greatly benefit Rockwell Automation. Whether President Donald Trump's aims are tactically aligned to better negotiate trade deals with America's trading partners or strategically put in place to shift the global economy structurally, one thing is clear: The current administration wants to encourage a reindustrialization of the U.
S. Realistically, that's going to come about via competing on labor costs. However, it can come with industrial software combined with automation.
That's where Rockwell Automation comes in because it's the leading industrial software/automation company in the U.S. The underlying growth drivers behind automation are already strong, with the increasing adoption of digital technology adding value to automation solutions and the software that runs them.
Given the recent tariff actions, there's likely to be an acceleration of investment in automation, and that's a plus for Rockwell. Unfortunately, the upheavals and the near term need to realign supply chains and production are highly likely to lead to some near-term order disruption -- never good news. Still, that shouldn't detract from the long-term growth opportunity at Rockwell and other companies set to bring back manufacturing to the U.
S. A catch-all way to invest in small-cap clean energy stocks Daniel Foelber ( Invesco WilderHill Clean Energy ETF): Archer Aviation is one of over 60 holdings in the Invesco WilderHill Clean Energy ETF. The fund is based on the WilderHill Clean Energy Index -- which is composed of clean energy companies from majors like Tesla to up-and-coming players.
Unlike market cap-weighted funds, the Invesco WilderHill Clean Energy ETF is roughly equal-weighted. For example, Tesla has a 1.9% weighting, which is close to the same as 1.
7% for Archer Aviation even though Tesla has a market cap of $801 billion at the time of this writing compared to less than $4 billion for Archer Aviation. In fact, over 83% of the fund is invested in small-cap companies like Archer Aviation. Unfortunately, small-cap clean energy companies have been especially vulnerable to high interest rates -- leading to a major sell-off in several clean energy industries -- from solar to EVs and more.
The ETF is down 27.5% year to date compared to a 14.2% decline in the Nasdaq Composite at the time of this writing.
But over the last three years, the ETF is down a staggering 75.8% compared to a 21% gain in the Nasdaq. Due to its focus on small caps, the fund's performance will vary significantly from the major benchmarks that are dominated by megacap companies.
It's worth noting that the fund sports an expense ratio of 0.65% -- which is much higher than ultra-low-cost funds like the Vanguard Growth ETF . However, the fee may be worth it if the fund is helping you fill an investment objective, such as targeting equal weights across dozens of clean energy companies.
Investors with a long-term time horizon and a high risk tolerance may want to consider the Invesco WilderHill Clean Energy ETF, which offers broad-based exposure to small-cap clean energy companies like Archer Aviation..
