Ten Clean Energy Stocks for 2013: January Update
Tom Konrad CFA
Clip art by Philip Martin
So far this year my picks are losing the relative performance
game, but 2012
started in a similar fashion. At the start of
February, PBW was up 21% and my picks were up only 15%. The
year ended with PBW down 16.4%, and my picks up 7.4%. I have
much better hopes for this year,especially for clean energy as a
whole. There's a meme that's even finding it's way into
mainstream media and Wall Street research notes that 2013 could be
an inflection point for clean energy. The long decline has
certainly produced a number of great values which few would expect
to see in a sector most people would associate with growth stocks.
||Total USD Return|
|TSX:WFI||Waterfurnace Renewable Energy
|NASD:ZOLT||Zoltek Companies, Inc.
|TSX-V:FVR||Finavera Wind Energy
|TSX:NFI||New Flyer Industries
|TSX:RPG||Ram Power Group
The table shows individual stock performance through February first, for my ten picks plus the six alternative picks I presented in a second article.
Below, I highlight significant events I feel affected stock
Lime Energy (NASD:LIME)
started the month with a rapid rise of $0.81 only to fall to $0.53
as worries surfaced about a possible NASDAQ delisting. It's
regained some lost ground over the last few days since Lime won a
stay of delisting from NASDAQ. While I can't predict what
NASDAQ will do, I think they should give Lime's management the
extra time they're asking for to complete their internal audit and
file their much delayed financial reports. Lime seems to me
to be complying with the spirit of the listing rules, in that they
are attempting to provide accurate financial information, even if
the ongoing internal review is taking much longer than anyone ever
expected when Lime's audit committed first discovered the
Lime is the biggest gamble in the portfolio. Right now, the
market is discounting a large chance of a delisting and some very
bad news from the internal audit. Both fears are real, but I
think the risks are not nearly as great as is reflected in the
current stock price. We should know the truth by the end of
Zoltek Companies (NASD:ZOLT)
started the month with a big jump when the wind Production Tax
Credit (PTC) was extended as part of the fiscal cliff
package. Then it gave back all its gains on February first
when the company missed analyst's earnings estimates for the
fourth quarter for 2012. I think the PTC extension is more
significant than the weak fourth quarter performance, and used the
sell-off to add to my position.
Kandi Technologies (NASD:KNDI)
lagged for most of the month, only to surge on February 1st on the
announcement that the company was setting up an electric vehicle
joint venture with Geely Automotive Holdings Ltd (Hong
announcement (PDF). Geely is a major Chinese automaker
without a significant presence in EVs, but an extensive dealer
network throughout China. The partnership should allow Geely
quick entry into the EV market, and provide strong manufacturing
prowess and distribution muscles to Kandi.
Finavera Wind Energy (TSX-V:FVR, OTC:FNVRF)
shocked me by finishing the month below its already depressed
levels at the end of December. However, the company's
fundamentals have not changed, and I used the recent lows to add
to my position in Finavera as well. I gave a more detailed
analysis of the stock's
moves and an updated valuation of the company here.
Waste Management (NYSE:WM)
rose sharply on rumors
that it might convert into a REIT. REIT or no, I like
the dividend, and the continued expansion of their recycling
business. WM expanded its recycling footprint with the
January 31st acquisition
of Texas based Greenstar.
New Flyer Industries (TSX:NFI, OTC:NFYEF)
got a big cash infusion by selling a 20% stake to Brazilian
busmaker Marcopolo S.A at C$10.50 a share. The
companies will also explore opportunities to explore synergies in
engineering, purchasing, technical, and operational matters.
That announcement, plus a growing backlog and several increases in
analysts' price targets all boosted the stock.
Power REIT (NYSE:PW)
produced a $1M
proof-of concept deal by investing in Solar Real Estate,
showing that its plans to become a renewable energy REIT are more
than just hot air. It also payed a $0.10 dividend, which had been
delayed from the fourth quarter of 2012 for tax reasons.
The year is still young, but it's off to a great start for clean
energy. My stock picks have been lagging a little, but at
least in the case of Finavera and Zoltek, that should be looked on
as a buying opportunity.
Disclosure: Long WFI, LIME, PFB, MXWL, ACCEL, ZOLT, KNDI, FVR,
AXY, WM, NFI, LXU, AMRC,PW, HTM, RPG.
DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results. This article contains the current opinions of the author and such opinions are subject to change without notice. This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.