A Carbon Conundrum for Christmas
Do we have to choose between happy kids this Christmas, and a happy future
for those kids? Practically everything we buy has a negative environmental
impact. If green
consumption is an oxymoron, so is green giving. Are we left with only greener
giving? It often seems that the only way to be truly green is to be
like the Grinch (before his heart-enlargement) and not give anyone
anything. And skip
the tree while you're at it.
It's a hard decision, and while there are many
Green Shopping Advisories telling us that we can buy and still feel we're
doing something good for the planet, it usually ends up being "less
bad" and the green
claims are not always as strong as we would hope.
The Gift of a Bright Green Future
The sad truth is, as successful
investors know, we nearly always must choose between immediate
gratification and long term gain. The whole debate about Global Warming is
basically a choice between long
term well-being and instant
gratification. If you come down on the long term well-being side of
the debate, prepare yourself for sighs and disappointed
looks from the little ones, and give the gift of stock in a
sustainable company that's working to make the place they live a better place to
Which stock to choose? Here are a few criteria I think are important:
- Stability: We should probably stay away from
companies aren't likely to be in business when the kids grow up.
- Greenness: As I noted last
week, investing in green companies, like
buying presents is often a compromise between greenness and practicality.
motive can make a company less brown, but it is unlikely to make it very
green (at least until we have stronger environmental regulation.)
- Educational: Most people give stocks to kids hoping to teach
them about the market. This will probably work better if the company
they own also has a brand they'll see on a regular basis.
For the stocks I've picked below, I rate them on each of these factors on an
A-F scale, to help you pick the one or ones you think will be best for your
soon-to-be environmentally aware kid.
Top Five Stocks for a Green Christmas
#5. Cree, Inc. (Nasdaq: CREE),
Stability C, Greenness B, Educational C.
You may have never heard of Cree, but they are a
world leader in making ultra-bright LED lights, as well as high current
power controllers which can significantly increase the performance and
efficiency of products that incorporate them. I call LED's the Compact
Fluorescent light bulb of the future (they're still too expensive for most
residential uses,) but they are getting rapidly brighter and cheaper. Although the company is
profitable, they have been the subject of takeover
rumors, and if they were
bought for cash, it might be profitable for your little munchkin, but the lesson
in green investing would probably be over.
On the other hand, if you also use
energy efficient LED Christmas lights, you might just have the company's
products on hand at the moment of gift-giving (if the LEDs involved happen to be
made by another company, who is to know?) Cree will also provide effects lighting
for the Beijing Olympics.
#4. The ABB Group (NYSE: ABB)
Stability A, Greenness C, Educational C.
ABB is a bit less fun than Cree, but they're in great shape in terms of long
term profitability, and their expertise
in efficient electricity transmission and distribution make them a good long
term hold. While they don't have a lot of consumer awareness among us grownups,
I bet your little one will have a lot of fun playing "Spot the ABB
logo" in back alleys. I bet you'll be surprised at how often you see
it yourself (see my profile
of ABB for details.)
#3. General Electric (NYSE: GE)
Stability A, Greenness D, Educational A.
It's hard to beat GE for consumer awareness, and the strong marketing push
behind their EcoMagination
initiative is sure to keep the company in the little one's mind, even if they
missed an entire week
of green programming on GE's NBC TV Network. On the other hand, GE is
so gigantic, they get less than 10% of their revenues from EcoMagination products
(despite the apparent 90% of their marketing
budget devoted to Green.) Nevertheless, I believe that Jeffrey
Immelt is serious about green, so green revenues are likely to grow quickly
in the future.
#2. Ormat (NYSE:ORA).
Stability B, Greenness A, Educational F.
I know, you've never heard of Ormat (unless you've been reading the recent
spate of articles about Geothermal Power, including the
one I wrote.) Ormat is widely recognized as a leader in
Geothermal, both in technology, and their ability to run plants well. They
are also just about as Pure-Green as any consistently profitable company I know
of in the Renewable Energy space. On the downside, you'll probably never
see one of their power plants, although you can always take the kids on a trip
to Yellowstone and talk about all the untapped geothermal potential there
(long may it remain untapped.)
(Pink Sheets ADR: SHCAY)
Stability A, Greenness C, Educational B.
While you may not associate Sharp with Greenness, they are the world's
largest manufacturer of photovoltaic panels. The electronics they are
more known for seem, from my unscientific sampling, to have a larger proportion
of Energy Star qualified
products than other manufacturers. I give them the top slot here because
photovoltaic solar panels are the first type of Renewable Energy most people
think of, and while many of the pure-play
PV manufacturers will survive, any particular one could go broke or be bought out in the near future.
Don't like these? We at AltEnergyStocks.com
would love to hear about your picks in the comments... We'll publish the top reader picks in a couple weeks... still in time for the Christmas Shopping shopping procrastinators.
DISCLOSURE: Tom Konrad and/or his clients have positions in
all the stocks mentioned here: CREE, ABB, GE, ORA, SHCAY.
DISCLAIMER: The information and trades provided here are for
informational purposes only and are not a solicitation to buy or sell any of
these securities. Investing involves substantial risk and you should evaluate
your own risk levels before you make any investment. Past results are not an
indication of future performance. Please take the time to read the full