Performance Update: Ten Speculations for 2008
This is the first of a short series of articles I plan, reviewing how my stock recommendations have been doing this year. I started the year bringing you 10 Alternative Energy Stocks I thought were worth speculating on for 2008, and I'll start this review with those articles, and also give you updates on what's been happening (or not) with the stocks. Click on the company name a link to the original article where I wrote about the stock.
Overall, a portfolio with equal dollar positions in these ten stocks is up 11.4% for the year, compared to the S&P 500 which is down 4.2% and the NASDAQ Clean Edge US Index, which is down approximately 14.3% (I took the number from CELS, the ETF which tracks the index, since I could not find up-to-date index values) since the start of the year.
Cree shot up as high as $35 early in the year, on buy-out speculation. There was also a quick bump when their transistors were used as part of a record breaking solar inverter. While a quick profit on a buy-out might be nice, the fundamentals and growing consumer interest in LEDs mean that I'm happy I didn't sell at the peak.
Another LED stock, Lighting Science saw a spectacular rise right after I recommended it, but was badly hurt by a patent infringement suit from Philips (NYSE: (PHG) in February. I found this personally very annoying, since I'm long both companies. I have no idea how the lawsuit will turn out, but I'm holding both stocks for now.
Ultracapacitors have been much in the news this year as an enabling technology for hybrid vehicles. Since that's one of the reasons I picked the company, I'm naturally very pleased.
Electro-Energy has been up and down since I wrote about it, but still has not caught the attention of the investors piling in to battery stocks. I'm waiting patiently.
Although I recommended this one, I've been totally shocked at how quickly it has run up. Mostly, this seems to be due to a large, high-profile sale into the hybrid bus market. I've taken the opportunity to take some profits (see my selling rule of thumb #2), but I'm still long.
Although this one is down, I still like it for the same reasons. The out of the money puts I wrote on it look likely to expire unexercised, and I just wrote some more today.
Like Electro Energy, Composite Technology still has not caught the attention of investors. I bought some more when I revisited the stock in March, and it's starting to look cheap again.
Another one requiring patience. I expect the big gains for this stock to come before their Pumpernickel project [Correction: it's the Blue Mountain Project which is scheduled to come online first... Pumpernickel is less advanced] begins to produce electricity (assuming there aren't any unforeseen hitches), similar to what happened with US Geothermal (AMEX: HTM) last year.
I sold my position at a loss when I heard their wave energy license was subject to rehearing in late January. Since then, Finavera was issued a preliminary 3 year permit, but I've continued to stay away. My hopes for this one had been based on an expectation of investor euphoria for wave energy, not fundamentals, and given the down-trending markets, I don't expect that sort of irrational exuberance again in 2008.
Since I wrote the article, a reader challenged my math on the impact of Te prices on their bottom line. Although I've made a profit on this one, I question my original analysis, but have not re-run the numbers. The slight decline can be completely attributed to the declining overall market, and FSLR has outperformed the clean energy sector as a whole. I am still short a June $300 call, but do not plan to write another when it expires in a week and a half.
DISCLOSURE: Tom Konrad and/or his clients have long positions
in CREE, LSGP, MXWL, EEEI, CPST, FCEL, CPTC, NGLPF, PHG, HTM and a short position in FSLR.
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 disclaimer here.