Monthly Archives: February 2010

2010: The Year of the Strong Grid? Part V: Hubbell Inc.

Tom Konrad, CFA Hubbell Inc. (HUB-B) is a strong grid stock that also has strong financials, signaled by a recent dividend increase. I came across Hubbell Inc. (HUB-B) when researching General Cable (BGC) for my recent article on the company.  Just one more example of when you start researching a sector, (in this case electrical transmission and distribution, or "strong grid") you never know what new companies you may find. Hubbell is a diversified electrical supplier, serving electric utility, residential, commercial, and industrial markets worldwide.  About a quarter (26%) of its revenue comes from the "Power...

Grid-Based Energy Storage; A $200 Billion Opportunity

John Petersen Yesterday a reader sent me a copy of an exhaustive new study titled "Energy Storage for the Electricity Grid: Benefits and Market Potential Assessment Guide" that was commissioned by the DOE's Energy Storage Systems Program and prepared by Jim Eyer and Garth Corey. I've been following the work in progress on this report since last summer and have eagerly awaited an opportunity to shift away from the overhyped electric vehicle market and focus instead on a far larger market where cost, performance and substantive business merit will be the only drivers. It looks like my time...

Why I Don’t Expect A Lithium-Ion Battery Glut

John Petersen It's no secret that I think plug-in electric vehicles are unconscionable waste and pollution masquerading as conservation. To support my opinions, I've published an easy to follow Excel spreadsheet that shows why plug-ins are 5x to 6x less effective than HEVs when it comes to reducing national gasoline consumption and 9x to 12x less effective than HEVs when it comes to reducing national CO2 emissions. To date, the only challenges to my analysis have come from die-hard EV fanatics who seem to believe battery factories grow on trees and raw material supply chains sprout like flowers...

Pure Technologies: Making Water Systems More Efficient

Tom Konrad, CFA A reader caught my attention with his description of Pure Technologies (PUR.V, PPEHF.PK), a company that can find leaks in water systems without shutting down the system.  Since I was intrigued, I thought my readers might be as well.  Here's what he has to say.  I've asked him to monitor the comments if you have follow-up questions of your own. Tom Konrad: Tell us a little about yourself and your involvement in environmental investing. Sam Healey: I invest largely in the cleantech sector. I look for companies solving problems that already exist, rather...

Beijing Cramps Foreign Offshore Wind Developers, Giving Boost to Domestic Firms

Bill Paul As it scrambles to develop an offshore wind power industry that potentially may generate as much as 200 gigawatts of electricity, China has decided to hamstring all would-be foreign developers, which should provide a big lift to certain Chinese companies. As reported last week by Environmental Finance magazine in its online edition, Beijing has effectively shut out international operators with new regulations requiring any foreign offshore developer to enter into a joint venture with a Chinese company under which the foreign firm must be a minority partner. “In reality, most of the international developers cannot, or...

2010: The Year of the Strong Grid? Part IV: General Cable

Tom Konrad, CFA General Cable (BGC) is a strong grid stock that's suddenly looking a lot cheaper.  Time to buy? General Cable is not only one of my Ten Clean Energy Stocks for 2010, it was also holding it's own in my list of "strong grid" (that is, electricity transmission) stocks that have strong financials.  About 59% of the company's revenues come from what I would consider "strong grid" markets: their "electrical utility" and "electrical transmission" segments.  I published the most recent version of that list on February 11.  In both these articles I cautioned that I...

Why You Should Not Join a Portec Rail Products (PRPX) Class Action Lawsuit

Tom Konrad, CFA Portec Rail Products (PRPX) agreed to be acquired by L. B. Foster Company (FSTR) on February 17. At least four law firms have started class action suits against the Portec board.  Here is why not to join any of them. Portec Rail Products has been a longtime favorite of mine.  It's profitable, and delivers valuable services to the rail and rail transit industries.  This article goes into a lot more detail as to why I like Portec.  In large part because of the acquisition, Portec is the best performing of my Ten Clean Energy...

Energy Efficiency In The Automotive Sector

John Petersen As a result of sweeping regulatory changes, the second decade of the new millennium is shaping up as a time of unprecedented progress in automotive fuel efficiency. In the EU, where small cars have been prevalent for decades, gasoline prices of $5 to $8 per gallon are the norm and consumers prize diesel engines, new regulations will require automakers to reduce tailpipe CO2 emissions to an average of 130 grams per kilometer (g/km) as follows: For 65% of the fleet, by 2012; For 75% of the fleet, by 2013; For 85% of the fleet, by...

Investors: Concentrate on This Alternative Energy Sector and You Should Make a Lot of...

Bill Paul For my money, energy efficiency (aka, the “fifth fuel”) is the best alternative energy sector for investors because it’s primarily about saving money, only secondarily about saving the planet. The energy services industry reportedly has grown by more than 20% per year every year since 2004 and efficiency service providers now pull in an estimated $5.6 billion a year just on U.S. commercial buildings. Pike Research says there is a reservoir of untapped projects worth $400 billion. “There’s this huge untapped potential” for energy efficiency, a U.S. Environmental Protection Agency spokesperson was recently quoted as saying....

A Tale of Two Battery Companies

John Petersen The last few weeks have offered a fascinating object lesson for believers in Benjamin Graham's theory that "In the short run the market acts like a voting machine, but in the long run it acts like a weighing machine." Since January 4th I've watched in awe as Exide Technologies (XIDE) lost roughly 30% of its market value and Ener1 (HEV) lost closer to 40%. The difference is that Exide took a voting machine beat down because it lost a well-known but financially immaterial customer while Ener1 seems to be caught in the early stages of a...

Ten Green Energy Gambles for 2010: Update I

Tom Konrad, CFA A quick update of last month's list of speculative puts, to reflect the new options symbols. In January, I put together a list of nine puts and one small energy efficiency stock I expect to do well this year.  I normally only do updates on these every quarter, but because of the recent change option symbols, I thought I'd revisit my 10 Green Energy Gambles.  The links in the original article have stopped working; this new table shows the current list. Here's the list: with updated option symbols. Security Portfolio...

Down and Out in 2011: Headlines from Possible Futures

Tom Konrad, CFA If you don't know what could go wrong in 2010, it could still hurt your portfolio. In Nassim Taleb's Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, he describes an exercise at one of his early jobs.  In order to become aware of risks they otherwise might have overlooked, they were to assume that they would lose all the money under their management in the coming year, and they work backwards to figure out how that might have happened. This struck me as an excellent idea, which investors...

2010: The Year of the Strong Grid? Part III

Two Strong Grid Stocks in Hiding Tom Konrad, CFA A look at two transmission (or "Strong Grid") stocks I missed previously: EMCORE Group and AZZ Incorporated. In part I of this series, I made the case that 2010 might be the year that transmission stocks caught investors' attention, as smart grid stocks did in 2009.  In part II, I looked at the transmission stocks in our Electric Grid stock list, and compared their financial strength.  My initial screen, based on Current ratio, Cash on Hand, Debt, Cash from Operations, P/E ratio, and dividend yeild allowed...

Cleantech Economics 101: Higher Fossil Fuel Prices; More Cleantech

David Gold With all the complexities of cleantech policy and technologies, there is only one simple thing needed for an explosion of competitive clean technologies – increased price of fossil fuels. The amount of R&D expenditures that will need to be invested in clean technology in order for it to hurdle the bar into competitiveness is much greater with low fossil fuel prices. And, the lower those prices, the less appetite the private sector has for making such investments. This leaves a much-increased burden on the back of government through grants and subsidies– a back that is...

Smart Grid’s Expected 250% 5-Yr Growth Rate is Great News for Cisco, IBM, Accenture,...

Bill Paul Lux Research forecast last week that the global smart grid market will grow some 250% over the next five years, reaching nearly $16 billion by 2015 compared with today’s $4.5 billion. Interestingly, Lux further forecast that only a few select firms will take full advantage of this looming largesse. It’s understandable why the payoff won’t be widely shared. As regulated entities (on the transmission and distribution side), electric utilities have an obligation (specifically, the time-honored “obligation to serve”) that effectively requires that they be conservative when partnering with IT firms that can provide the money-saving,...

Canada’s Top Ten Cleantech Firms

Tom Konrad, CFA Given the small size of its economy and rather lackluster approach to climate change, Canada has many of the Cleantech stocks with the best prospects.  Canadian listed firms come from a broad range of sustainable sectors, and a lack of attention from United States investors means that many trade at very attractive valuations.  Corporate Knights' has picked ten of the best. I'm often surprised at how many of my favorite green stocks are listed in Canada.  This year, two of my Ten Clean Energy Stocks for 2010 are Canadian listed.  The same was true for my...