Monthly Archives: April 2011

Dilution for Dummies – Why A123 Systems is Undervalued

John Petersen Bartenders are smarter than most investors because they know what dilution is and they never get it wrong. Unfortunately, the markets have made such a bogeyman out of the word 'dilution' that public companies often suffer extreme backlash from financing transactions that should have existing stockholders on their feet and dancing in the aisles. Today I'll try to clear up some of the profound confusion that runs rampant in the minds of retail investors. Every bartender knows you can't dilute a beer by adding a shot of whiskey. The boilermaker is always stronger....

An uNclear Future

25 years on from Chernobyl: Nuclear’s unclear future, and the on-going renaissance for alternative energy stocks Karl L. Mitchell, Ph.D. Summary On April 26th, 1986, the world’s worst nuclear accident occurred at the Chernobyl nuclear power station in northern Ukraine.  The blast spewed a cloud of radioactive fallout over much of Europe, causing many hundreds of thousands to flee from their homes in Ukraine, Belarus and western Russia.  25 years later we are facing the only other level 7 event on the International Nuclear Event Scale; at Fukushima, Japan.  Although less immediately catastrophic, it has resulted in...

Brightsource: New Tech is Filled With Failure

Dana Blankenhorn If there is one thing I've learned as a tech reporter it is that failure is common, but what we learn from failure can often lead to greater success. Back in 1984 I was asked to help write the manual for a start-up called The Promise. The Promise would offer home banking, home shopping, and information services, delivered to your PC. The Promise failed almost before the lights went out on the press conference. It was at least a dozen years too early. There was no Internet, and I worked on a double-floppy IBM PC. Fortunately...

The Brightsource IPO: By the Numbers

The article first published at this URL was originally attributed to Dana Blankenhorn by my mistake. It was in fact written by Katie Fehrenbacher, Editor at GigaOM and Earth2Tech. You can find the original article here: http://gigaom.com/cleantech/brightsource-energys-s-1-by-the-numbers/. The article I had intended to publish is here: http://www.altenergystocks.com/archives/2011/04/brightsource_new_tech_is_filled_with_failure.html My apologies, Tom Konrad, Editor, AltenergyStocks.

The Cadmium Telluride Solar Factory Race

by Joseph McCabe, PE Solar manufacturers are racing to build the next cadmium telluride (CdTe) photovoltaic (PV) factory in the United States. Three major CdTe on glass factories in the US have been recently announced each with a unique starting point. Abound Solar has won a US DOE loan to support a new 640 MW/yr facility in Tipton, Indiana. General Electric (GE) recently announced buying Primestar. They indicate that they will be building the largest PV manufacturing facility in the world. Finally First Solar has announced a 250 MW/yr facility to be built in Mesa City Arizona near...

Petersen’s Wind Power Paradigm Paralysis

Tom Konrad CFA I published my rebuttal to John Petersen's recent article "Gone With The Wind – Debunking Geographic Diversity" on November 1st last year.  It was titled Alternative Energy: The Paradigm is the Problem.  That article had two parts.  The first part focused on electric vehicles, and argued that the problem with the electric car was not electric propulsion, but the car paradigm.  I concluded that electric propulsion makes considerably more sense for electric bikes, trains, and buses.  John clearly understood that section, because he published an article just last week "Lux Research Confirms that...

American Superconductor: Reading the Tea Leaves

Tom Konrad CFA American Superconductor (NASDAQ:AMSC) dropped 52% since their profit warning on April 6th.  Is it a screaming bargain, or does it have farther to fall? Two readers asked me to take a look at American Superconductor Corporation (AMSC) after the company issued a profit warning on April 6th.  Although the stock was included in my list Ten Clean Energy Stocks for 2011, (which has produced more buying opportunities than profits so far this year) I did not own the stock in any of my managed portfolios, and so the research had to take...

Gone With The Wind – Debunking Geographic Diversity

John Petersen Earlier this month I wrote a pair of articles (here and here) that questioned the reasonableness of the near universal assumption that the wind is always blowing somewhere and wind power infrastructure with a wide enough geographic dispersion would offer a relatively stable power output. I presented graphs from the Bonneville Power Administration and a study by the John Muir Trust that raised substantial doubt in my mind. The articles drew a well-reasoned response from my colleague Tom Konrad (here). While many commenters understood the point I was trying to make, many others argued that...

Top Performing Clean Energy Funds in 2010

Tom Konrad CFA When Bloomberg New Energy Finance (BNEF) released their clean energy league tables for 2010, the top of the list was my favorite exchange traded fund (ETF), the Powershares Cleantech Portfolio ETF (AMEX: PZD), with an annual return of 7.6%. Second place was the Winslow Green Growth (WGGFX) mutual fund (7.4% return), which is one of what I consider to be the three best clean energy mutual funds. But the one I consider to be the best, the Gabelli SRI Green Fund (SRIGX) was nowhere to be seen, despite the fact that it returned 12.1% in...

Why Energy Storage Investors Must Understand Economies of Scale

John Petersen One of the most seductive and dangerous stock market myths is the immensely popular but demonstrably false notion that the rapid cost reductions and performance gains we enjoyed during the information and communications technology revolution will be repeated in the age of cleantech. The persistence of the mythology is astonishing when you consider that the entire history of alternative energy proves that cost reductions and performance gains are extraordinary events, rather than common occurrences. Investors who buy into economies of scale mythology without carefully considering the fundamental differences are in for a world of disillusionment and...

Kaydon: Profits Behind the Scenes

Debra Fiakas Most investors when they consider the alternative energy sector think about the big solar photovoltaic manufacturers or the ethanol producers.  Engineering firms like Kaydon Corporation (KDN:  NYSE) rarely come to mind.  With special expertise in fluid processes, Kaydon is an indispensable partner in a variety of alternative energy projects such as wind, renewable diesel and ethanol plants. The company earned a 12% net profit margin on $4645 million in total sales in the year 2010.  As impressive as that might be the really bright spot in Kaydon’s financial picture is its ability to generate cash ...

Who’s Winning the Clean Energy Race?

Tom Konrad CFA Highlights from a report on Clean Energy investments from the Pew Charitable Trusts. The Pew Charitable Trusts just released their report on Clean Energy, finance, and investment in the Group of Twenty (G20) economies in 2010 . I had the opportunity to review a pre-release version of the report. Some 2010 trends they discovered were encouraging or exciting, some were disappointing. I also had the chance to speak to the director of Pew's Clean energy Program, Phyllis Cuttino, about the report. Here are the highlights from the report and our discussion. Clean Energy Sectors...

Lux Research Confirms that Cheap Will Beat Cool in Vehicle Electrification

John Petersen On March 30th, Lux Research released an update on the vehicle electrification market titled "Small Batteries, Big Sales: The Unlikely Winners in the Electric Vehicle Market" that predicts: E-bikes and micro-hybrids carry minimal storage, but compensate with high volume. E-bikes show strong unit sales, as they sustain a 157 GWh storage market totaling $24.3 billion in revenues in 2016. Micro-hybrids benefit from increasingly stringent emissions limits, supporting 41 GWh and $3.1 billion in storage sales. Hybrid electric vehicles (HEVs) like Toyota's Prius grow steadily while PHEVs and EVs are at the mercy of external factors....

How to Measure the Next Economy?

Garvin Jabusch In search of a sucessor to the Global Industry Classification Standard The Global Industry Classification Standard (GICS) is the framework within which finance types organize companies and their stocks into industries and sectors. You've heard the names for these groups many times: energy, transportation, materials, commercial services, etc. These divisions have been useful in attempting "to enhance the investment research and asset management process for financial professionals worldwide" (mscibarra.com, 3/2010). And, for a while, GICS did a decent job of keeping portfolio managers, investment advisors and their clients reasonably well organized in their thinking about...

The Water Food Energy Climate Nexus (Pt. 1)

v:* {behavior:url(#default#VML);} o:* {behavior:url(#default#VML);} w:* {behavior:url(#default#VML);} .shape {behavior:url(#default#VML);} Eamon Keane Eamon Keane 2 581 2011-04-11T22:13:00Z 2011-04-11T22:13:00Z 4 1112 6341 52 14 7439 14.00 Clean Clean false false false false EN-IE X-NONE X-NONE ...

Why Geographic Diversification Smooths Wind Power

Tom Konrad CFA Canadian weather data shows the variability-smoothing potential of a robust continental electric grid. Intelligent skepticism is valuable to me as an investor when it makes me question my assumptions.  When I'm wrong, it makes me find out sooner (and hopefully get out of a bad trade sooner, or never get into it.)  When I'm right, I emerge with my thesis tested, which leads to the confidence needed to stick to a trade when the stock market voting machine moves against me in the short term, before it comes around in the longer term. ...