The Week In Cleantech- 4/7/12

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Easter Treats for Energy Focus, Solazyme, Capstone, Alstom, and Iberdrola; SemiLEDS Lays an Egg

Jeff Siegel

April 3: Solazyme (NASDAQ:SZYM) pops 12% in pre-market

  • Energy Focus, Inc. (OTCBB:EFOI) announced this morning that it landed a $1.8 million order from “a leading Energy Service Company” for its LED lamps. Despite the fact that I hate reading press releases about deals like this when all companies are not named, this is a pretty solid deal for EFOI. The company struggled a bit last year, but 2012 has been looking up. Particularly after it was announced a few weeks ago that the company had entered into a 5-year cooperation agreement with Communal International, Inc. This deal essentially allows EFOI access to the Asia market. EFOI could get a quick boost today, although the very speculative nature of this particular stock will likely keep it from getting much love from those seeking to go long in the LED space.
  • Solazyme, Inc. (NASDAQ:SZYM) announced this morning that it and Bunge (NYSE:BG) are forming a joint venture to build, own and operate a commercial-scale renewable tailored oils production facility adjacent to Bunge’s Moema sugarcane mill in Brazil. Although I’m not a huge fan of today’s conventional corn-based ethanol that we’re using in the U.S. (at an enormous cost to the tax payer and to the environment), Solazyme’s access to Brazil and its sugarcane will prove to be a good thing for the company. In fact, the stock is up about 12 percent in pre-market. Fortunately, I updated the members of my Green Chip Stocks service to this on back on March 9, when it was trading at around $13.00 a share. Right now it’s around $16 – which was my initial price target.

 Certainly I’m pleased with the gains, but my only hangup with this one is that the company doesn’t seem to have much of a cushion as it seeks to expand. I wouldn’t be surprised if the company had to raise some additional capital sometime in the next year or so.

April 4: Capstone Turbine (NASDAQ:CPST) Lands Singapore Deal

Capstone Turbine (NASDAQ:CPST) announced this morning that it picked up a sale in Singapore for its C1000 microturbine unit. The microturbine is being sold to N&N Agriculture, which is one of Asia’s biggest high-tech egg farms. Biogas generated from animal waste will be used to fuel the unit.

Although this is only one order, Capstone’s continued expansion into Asian markets is a bullish indicator for the company.

Capstone tends to be one of those stocks that’s a hit with traders. When it falls into the $1.10 to $1.20 range, short interest heats up. Historically that short interest will stick around until a few more orders come in. Capstone has a tendency to pick up new orders every month or two. I’ve played this one many times before – jumping in below $1.10, then waiting it out for a series of new deals to push it back up to around the $1.40 level. What can I say? When it comes to making money, I’m a creature of habit. Not sure how Capstone will perform today, though. Given the way the broader market looks in pre-market, this announcement could fall in deaf ears. But I’m still a buyer at these levels.

April 5: SemiLEDS (NASDAQ:LEDS) Revenue Drops 21%

SemiLEDs Corporation (NASDAQ:LEDS) announced Q2 results this morning. The LED maker showed a 21 percent decrease in revenue, guided to a larger-than-expected loss, and offered a quote from the CEO that I guess is supposed to keep investors from jumping ship. Noting that “given the ongoing challenging industry environment, we are pleased with our quarterly financial and operational results.” It’s no secret that the LED space is a tough one to be in right now. And quite frankly, I don’t see it easing up anytime soon either. However, LEDS is still a major player, and if it can continue to tread water (as it’s been doing) this year, I think it’ll be OK. After all, despite the decrease in revenue, the company still beat estimates.  I suspect the stock will get a nice boost this morning.  Of course, the last place I’m going right now is the LED sector. We’ll re-evaluate around the second half of this year.

April 6: EDF, Alstom, Iberdrola Chosen For Offshore Wind Deals in France

Yesterday we reported that a decision on which companies will be selected to build 3 gigawatts worth of offshore wind in France, would be made shortly.

Well, this morning we learned that state-owned utility EDF, in partnership with Alstom (PINK SHEETS:AOMFF) won three of the deals. The fourth was won by Iberdrola (PINK SHEETS:IBDRY) of Spain.

The companies will now build 2 gigawatts of offshore wind capacity – or the equivalent of two small nuclear reactors.

France initially launched a call for bids last summer in an effort to help the nation transition 23 percent of its power generation to renewables.

Although this is a big deal for the offshore wind industry, these projects in France still don’t come close to what’s currently being developed in Spain, Denmark, and of course, Germany, where that country is seeking to replace nearly all of its soon-to-be retired nuclear power plants with offshore wind.

While debate continues in the U.S. over whether or not to embrace offshore wind (although it looks like the state of Maryland is getting very aggressive here and is likely to be a leader in offshore wind in the next few years), Europe is going full-speed ahead. And certainly we’re looking to get a piece of this action. My top plays on Europe’s offshore wind development are Siemens (NYSE:SI) and ABB (NYSE:ABB).


Disclosure: None

Jeff Siegel is Editor of Energy and Capital, where these notes were first published.


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