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Seven Greentech "Experts" and Their Stock Picks

Tom Konrad CFA

Not many self-proclaimed Greentech experts know what they're talking about, and fewer can effectively make the case of Greentech investing.

When I attended the MoneyShow last week to moderate a panel, I also stayed around to see what people who held themselves out as Greentech or Cleantech experts were saying.  Since MoneyShow attendees do not pay to get in, all the revenue comes from presenters.  I was asked to moderate my panel because I made it a condition of helping them advertise the show, but many of the presenters I saw were on stage simply because they had something to sell, often a newsletter.  A few had been asked there to flesh out the program, although it was not always clear which was which.  My best guesses as to whether the speakers paid to present are listed below.

In my decision about which sections to attend, I simply tried to attend as many sessions in the show's Cleantech/Greentech track as possible.  All of these presenters chose to represent their presentations as belonging in the Cleantech/Greentech track, although for some it was a real reach.  Here they are, in the order I attended their presentations:

Expert: Susan Preston
Affiliation: CalCEF Clean Energy Angel Fund
Position: Manager and General Partner
Paid Appearance: Probably Not
Cleantech Expertise: Good
Selling: Her book: Angel Financing for Entrepreneurs: Early-Stage Funding for Long-Term Success
Notes: Ms Preston did a general presentation during the opening ceremonies making the case that we should not only invest in Cleantech, but that we needed to pressure government to provide more support for the sector.  She made a strong case that Cleantech was the right thing to do, but did not do as well making the case that Cleantech is a good investment.  I thought her message about needing government support undermined her case for making Cleantech investments.  After all, why would we invest in a sector that needs more government support than it is already getting?

Expert: Jackie Ann Patterson
Affiliation: Back-Testing Report
Position: Trader
Paid Appearance: Probably
Cleantech Expertise: Clueless
Selling: Reports about technical trading strategies.
Notes: I attended Ms. Patterson's session because it was titled "What's Driving CTIUS?" which is the market index underlying the Powershares Cleantech Portfolio ETF (PZD).  I was hoping for a discussion of the relative performance of Cleantech sectors, but instead she did some superficial technical analysis on the stocks in the index.  She also did not think Cree (CREE) the LED lighting leader, had anything to do with Cleantech, which is why I label her Clueless when it comes to the sector.

Expert: Elliot Gue
Affiliation: Personal Finance and The Energy Strategist
Position: Editor
Paid Appearance: Probably
Cleantech Expertise: Weak
Selling: Newsletters.
Notes: This presentation was about oil, and had no reason to be listed as Cleantech/Greentech.  Although Mr. Gue claims to "cover" Alternative Energy, he did not show much sign of knowing much about it, and seemed to conflate Alternative Energy with Solar, a common novice's mistake.  He talks a good line about oil companies, so I decided to look into the one oil stock he recommended shorting - Diamond Offshore (DO).  The reason he gave was that the company had most of its platforms in the Gulf and would soon have to cut its dividend, sending income investors to one of his favorite picks, SeaDrill (SDRL).  That sounded reasonable to me, until I took a look at DO and found out they had already cut their dividend significantly on Apr 22 and July 22.  It's pretty easy to predict a dividend cut when the cut has already happened.

Expert: Paul Dravis
Affiliation: Dravis Group LLC
Position: Consultant
Paid Appearance: No
Cleantech Expertise: Good
Selling: Nothing.
Notes: Mr. Dravis's approach to Cleantech is a good one: look for supporting industries that have less technological risk than the high profile start-ups.  He currently likes Cosan (CZZ), SQM (SQM), General Cable (BGC), and Power-One (PWER) almost all of which I've had good things to say about in the past, for similar reasons (see here, here, and here).  The only one I have not talked about is SQM, which is not green enough for my taste (admittedly a fairly high bar.)  That said, I was more impressed by his feel for market timing than his industry knowledge, so much so that I asked him to send me his weekly newsletter, the Dravis Wealth Advisor, which he does not charge for.  If you're interested in giving his newsletter a try, send him an email at p a u l at d r a v i s dot n e t.  Like me, he's currently quite bearish, so don't rush out to buy his picks unless you're also prepared to hedge them.

Expert: Neil George
Affiliation: Stocks That Pay You
Paid Appearance: Probably
Cleantech Expertise: None
Selling: Newsletters
Notes: Neil brought out the old saw about Alternative Energy (which he also conflates with the highest-profile subsector, solar) being a bad investment because he does not like energy generation that's "heavily subsidized."  Then, in the very next breath, he recommended Nuclear Energy.  In the US, Federal nuclear subsidies account for about 21% of the cost of Nuclear Energy, while Federal Solar subsidies account for about 12% (2006 data.)  State subsidies are probably higher for Solar, but vary by state.  In any case, one thing Nuclear energy clearly isn't is unsubsidized.   One thing Neil George clearly isn't is logically consistent.

Expert: Jeffrey Cianci
Affiliation: Green Science Partners
Position: Cheif Investment Officer
Paid Appearance: Unknown
Cleantech Expertise: Very Good
Selling: His Fund - Green Science Partners (but only to accredited investors)
Notes: Jeff bases his investment decisions on a combination of deep analysis of both the technology and technical analysis of the stocks in question.  He looked at a large number of stocks in his presentation, but his high-velocity trading strategy is such that I don't know if any of the stocks he liked will still be among his favorites a week from now.  In many ways, his investment strategy is the exact opposite of mine: he tries to figure out what the best technology is in any sector, and times his buying and selling using technical indicators in combination with earnings projections.  In contrast, I try to find picks that have solid earnings based on tried-and true technology, and can be bought solely on the basis of fundamentals.  Despite our contrasting approaches, he gave me the impression of someone who knows the sector at a deep level.

Expert: Peter Cox
Affiliation: Greentech Opportunities
Position: Analyst
Paid Appearance: Probably
Cleantech Expertise: Good
Selling: Newsletter
Notes: Peter made the best, most concise case for investing in Cleantech that I heard at the entire show.  He also had a couple of interesting wind picks: Western Wind Energy (WNDEF.PK, WND.V) and Catch the Wind (CTW.V), a pair of Toronto Venture listed firms.  I have a small position in Western Wind, but until his talk, I did not know that Catch the Wind was public, but I'd heard of it and was already enthusiastic about their technology.  Of all the paid newsletters being sold at the show, Greentech Opportunities is the only one I'd sign up for if they were all free.

DISCLOSURE: Long BGC,WND

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.



was posted on AltEnergyStocks.com.


       

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Comments

Tom-
Thank you for attending my presentation and for the opportunity to clarify my comment about CREE.

You're right, I'm not a CleanTech expert, although I do care very deeply about the environment.

My sarky comment on CREE comes from analysis that ties their stock growth specifically to mass adoption of LED televisions. While LEDs can save energy during operation, I question the overall environmental toll of producing the new televisions, and especially the likely marketing to induce people to buy more TVs whether they need them or not.

I think its actually a challenging trade-off to know when the operational energy savings outweighs the costs of new production and scrapping/recycling old models.

It looks like you have done extensive analysis of many alternate energy / clean tech resources and I wonder:

What is your take on the whole impact of replacing existing TVs with new LED models?

Do you think CREE stock will appreciate independently of the LED TV migration?

Best regards,
Jackie

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