Monthly Archives: July 2010

The Pure Technologies Takeover of Pressure Pipe Inspection Company

Tom Konrad CFA In February, I published an interview with Sam Healey portfolio manager at Lamassu Holdings about Pure Technologies (PUR.V, PPEHF.PK), a company that can find and repair leaks in water systems without shutting down the system. Last week, Pure Technologies announced that it intended to acquire Pressure Pipe Inspection Company for cash and stock worth as much as C$34.9 million.  The market's reaction was initially positive with PUR.V gaining C$0.29 on Wednesday, the day following the announcement, but most of these gains were given back on Thursday and Friday. My initial feeling is that this...

The Big Short and Picking a Money Manager

If you're going to have someone else manage your money, consider their incentives carefully. I just finished reading Micheal Lewis's excellent book The Big Short: Inside the Doomsday Machine on the Wall Street's role in the subprime mortgage meltdown and the few investors who saw it coming. I began with a low opinion of the effectiveness of the vast majority fund managers and advisors who manage other people's money for a living, but the the highly-paid gross negligence and/or incompetence of the people running the CDO operations of the big Wall Street banks in the years leading...

Battery Cost Forecasts and The Origin of Specious*

*with humble apologies to Charles Darwin John Petersen The Oxford Dictionary defines the adjective 'specious' as: Superficially plausible, but actually wrong; Misleading in appearance, especially misleadingly attractive. The Wiktionary offers a broader definition as: Seemingly well-reasoned or factual, but actually fallacious or insincere; strongly held but false; Having an attractive appearance intended to generate a favorable response; deceptively attractive. Over the last two years I've patiently analyzed the evolving price and performance forecasts of electric vehicle advocates and lithium-ion battery developers. In the process I've shown them to be possible, but unlikely, and...

The Best Peak Oil Investments: Ten Electric and Hybrid Car Stocks

Tom Konrad CFA Tesla Motors (TSLA) is not the only electric vehicle (EV) stock.  Here are nine other public companies helping to replace petroleum with electricity in our cars and trucks. Early in this series on the Best Peak Oil Investments, I put together an in-depth comparison of alternative fuels.  I concluded that the best prospect for displacing oil in the long term is electricity supplemented by biofuels.  Vehicle Electrification is likely to come to dominate the transportation sector because only renewable electricity can supply energy on the scale that we currently use for transportation with limited...

Metrics for Thin Film Solar CIGS Company Comparisons

Joseph McCabe Many people ask me, “which CIGS company is going to emerge as winner in the race towards high efficiency thin film PV’s? To provide an enlightened perspective to the question, some historical perspectives are needed. First Solar (FSLR) has helped the Thin Film PV Industry by proving that respectable solar to electric area efficiencies can be achieved in a low cost manufacturing processes, with respectable performance over time. First Solar’s technology is cadmium telluride (CdTe) on glass. Previously, amorphous silicon was the thin film leader, with the highest commercially available thin film area efficiencies; currently they...

My #1 Rule of Investing

Tom Konrad CFA Rules of Investing Warren Buffett says "The first rule of Investing is don't lose money; the second rule is don't forget rule #1." Jim Hansen at Ravenna Capital Management and publisher of the Master Resource Report about oil and other energy news has a "prime directive" (a la Star Trek) about oil prognostication which is "never predict prices." These rules have to be taken metaphorically, not literally.  Buffett's rule is too general to be useful.  I take his message to mean that care to avoid losses is more effective than...

Why Energy Storage Investors Must Understand Resource Constraints

John Petersen This Saturday marks the second anniversary of my blog, which began with an article titled Lithium-ion Batteries and Centerfolds. Over time my archive has grown to 142 articles on energy storage devices, the companies that make them and their crucial role as enabling technologies for wind and solar power, transportation and the smart grid. While cleantech bloggers usually focus on new technologies that might be game-changers, I'd rather focus on major enhancements to proven technologies from established industry leaders. The reason is simple, hot new technologies have limited investment value if the world can't produce enough...

Ten Green Energy Gambles for 2010: Q2 Update

Tom Konrad CFA My speculative green gambles still have chips, but the mild decline of the stock market so far this year is not enough to make them really pay off, yet. In January, I brought readers a collection of nine bearish puts on non-green companies and ETFs and one tiny energy efficiency company with a chance of taking off big before the end of the year.  They considered of bets against three fossil energy companies, four travel and leisure stocks, a Mexico ETF , a Trucking company (JB Hunt ), and a long bet on Power...

Modern Energy Investor Forum: Denver, CO – Sep. 22-25

In more than 20 years of brokering relationships between investors and the natural resources industry, I’ve never had as many investors tell me in the last year that they’re having a difficult time identifying and engaging with high-quality companies in clean technology. Why is this? Some complain that the industry is too new and unsettled to differentiate between top-grade businesses and pretenders. Others have told me that too few companies have strong business plans and can account for the uncertainty in the markets or in federal legislation. They go to conferences and are inundated with pitches from companies...

Toyota’s Straight Talk On Plug-in Vehicles

John Petersen Most investors know that Toyota Motors (TM) is the world's biggest manufacturer of hybrid electric vehicles, or HEVs. Since 1997, Toyota has sold over two million cars using its Hybrid Synergy Drive® and earned a sterling reputation for fuel efficiency and customer satisfaction. What many don't realize is that Toyota is also the world's biggest manufacturer of advanced automotive battery packs. Toyota entered the battery business in 1996 when it bought a 40% interest in Panasonic EV Energy, a joint venture company that was formed to make NiMH batteries and battery packs for the Prius. Over...

The Best Peak Oil Investments: Nine Mass Transit Stocks

Tom Konrad CFA In 2007 and 2008, high gasoline prices gave a large boost to mass transit ridership. Here are the stocks that might benefit if that scenario repeats itself. Americans are notoriously attached to their cars, but high oil prices in 2007 and 2008 led many to get on a bus or train.  According to a 2009 paper Transit Ridership Models: Present Status and Future Needs by Grace Galluci and John D Allen, Ph.D. from Chicago's Regional Transportation Authority, current published transit ridership models do not yet incorporate changes in gasoline prices.  The authors consider...

Great Lakes Dredge and Dock (GLDD), An Oil Spill Cleanup Stock

Tom Konrad, CFA Great Lakes Dredge and Dock is curiously in the center of a many emerging trends, some of which are not yet being talked about. I've been watching Great Lakes Dredge and Dock (GLDD) for a few months as a possible alternative transportation stock to talk about for my Best Peak Oil Investments series.  My thinking goes like this: barge and river transport are two of the most fuel efficient ways to move bulk cargo.  Barges are even more energy efficient than rail freight for most uses, according to the Congressional Budget Office. One...

Cleantech is a Bunch of Hot Air!

David Gold While renewable energy often captures most of the cleantech headlines, if anyone doubts why energy efficiency must play a significant part in the cleantech effort – as significant, if not more so, than the role of renewable energy just examine the energy flow graphic developed by McCall and Bassett and reprinted in the June edition of Technology Review.  At least half of U.S. energy consumption goes to nothing more than creation of hot air through waste heat.  And, when one realizes that much of the 13.9% of electricity output from power plants shown in the...

A Contrarian’s Take On Goldman’s Advanced Battery Report

John Petersen On Wednesday a reader sent me a new Goldman Sachs research report on the advanced battery sector titled "Advanced Batteries: Light, but the tunnel is long; Buy ENS, HEV Neutral, AONE Neutral." If the essence of legal argument is "the plausible boldly asserted," then I'd suggest that the essence of sell-side analysis must be "the implausible accepted without question." While I agree with Goldman's conclusions that Enersys (ENS) is a bargain at the current price and caution is best when it comes to A123 Systems (AONE) and Ener1 (HEV), I have major problems with their assumptions...