11 Clean Energy Stocks for 2012: Quick Update
Tom Konrad CFA
Experimenting with more frequent updates
In the past, I genrally only wrote about my annual list of ten
clean energy stocks on a quarterly basis, but when I wrote
last month to apolgize for inadvertently slipping in an extra
stock, and in the process wrote a few notes on a couple of
the stocks with news, a couple readers wrote to say they liked the
more frequent updates. So let it be written, so let it be
Leave a comment if you think it's something I should continue
doing, or if you think my limited writing time is more valuably
spent talking about stocks you have not already heard about.
February was kind to my stock picks, which had a total return
since the start of the year of 19.5%, up from 15.1% at the start
of February. The hedged portfolio showed a gain of 16.1%, up
from 12%. Meanwhile my benchmarks both lost ground, the
Clean Energy ETF PBW
falling back to 10.9% from 20.8% at the start of February, and the
Russell 2000 ETF IWM falling from a gain of 12.3% to a gain of
only 8.8% for the year.
For details on the composition of the portfolio and hedged
portfolio, see the original article: 10
[sic] Clean Energy Stocks for 2012. Stock-by-stock
performance and dividends are shown in the chart below. Note
that the performance of foreign-traded stocks mrked with * is
calculated based on the prices in their home markets converted to
dollars at the prevailing rate at the time.
Euro Stocks Rebound as Crisis
The three European stocks (Rockwool
up 28%, Veolia [VE]
up 31%, and Accell [ACCEL.AS]
up 22%) have done well this year, as investors worst fears of the
outcome from the Greek debt crisis begin to fade. Veolia
climbed 15% over the last two days based
on its announcement that the company is in talks to sell its
mass transit unit.
Alterra Rises on HS Orka
The top performer has been Alterra Power [MGMXF.PK/AXY.TO.]
I think the 57% gain so far this year is partly based on the fact
that the company had been so beaten down last year, and the
announcement that the group of Icelandic pension funds that owned
25% of its HS Orka geothermal plant had increased
their stake to 33.4%. This is good for Alterra in two
ways: the cash can be used for investments in other renewable
energy projects, and the greater local ownership of the Icelandic
power plant helps to blunt the criticisms of Icelandic
nationalists who who have been highly critical of foreign
ownership of this power plant, which meets 9% of Iceland's
electricity needs and 10% of its heating needs.
Depressed Stocks Cheer Up
The other star performer has been transit bus manufacturer New
I believe the stock's rise has been mostly a rebound from
excessively depressed levels at the start of the year. Even
at the current $7.89 a share, I think this high-yielding stock
remains an excellent value. The story at Waterfurnace (WFIFF.PK/WFI.TO)
is similar, with the stock rebounding from severely undervalued
levels at the start of the year on little news of note.
Drifting in the Western Wind
The worst performer has been Western Wind Energy (WNDEF.PK/WND.V.)
This stock has been drifting slowly downward on a lack of news
after rejecting potential buyout at the end of last year.
Since the company has completed its Windstar and Kingman wind
farms, the value of the company has risen appreciably since I wrote
about it in late 2011, so the price decline represents an
opportunity to pick up a deeply undervalued renewable energy power
producer. I have a limit order in to buy a little more at
slightly below the current price, despite my fairly large existing
position in the stock.
It's been a good year so far for my picks, much like the start of
my last banner year, 2009. As I wrote when I introduced this
I'm optimistic about 2012. Unless we see a total economic meltdown..., I expect strong appreciation of this portfolio of undervalued clean energy stocks in 2012.
DISCLOSURE: Long WFIFF, LIME, AMRC, RKWBF, WM, VE, ACCEL, NFYEF, FNVRF, WNDEF, MGMXF, and puts on IWM and SPY.
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.
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