Sustainable Investment Opportunity In 2017

by Garvin Jabusch Lord Nicholas Stern recently said, “Strong investment in sustainable infrastructurethat’s the growth story of the future. This will set off innovation, discovery, much more creative ways of doing things. This is the story of growth, which is the only one available because any attempt at high-carbon growth would self-destruct .” More pointedly, the Investment Bank division at Morgan Stanley in 2016 advised clients that long-term investment in fossil fuels may be a bad financial decision, writing, “Investors cannot assume economic growth will continue to rely heavily on an energy sector powered predominantly by fossil fuels." What...

What Obama Did To Coal Investors, What The Next President Might, And How Investors...

by Tom Konrad Ph.D., CFA Investing in the past is a good way to lose money.  Just ask anyone who has been investing in coal stocks since Obama we re-elected. A glance at the chart above shows that the VanEck Vectors Coal ETF (KOL) is down about 50% over the last four years, even while the broad market (as represented by the SPDR S&P 500 ETF (SPY)) has gained almost 50%.  But even if we knew this was going to happen, should investors have rushed into the energy sectors most loved by liberals: That is, Wind, Solar,...

Can Public Equity Investing Have Impact?

by Garvin Jabusch There’s an argument in the world of impact investing that goes something like, "impact happens only through private investments; there is no real impact, apart from shareholder engagement efforts, in public equity investing." An associated perception is that investment impact means capitalizing an enterprise beyond what would happen otherwise, meaning private equity alone has the power to provide real impact. But is this true? Publicly traded corporations are the largest and most visible social and environmental bellwethers of the global economy, and the high allocation to public equities in most investor portfolios means public equity...

What’s In Store For Cleantech Stocks?

Tom Konrad Ph.D., CFA talks with four investors about the rocky year ahead for the stock market and the likely impact of the market correction. Note: This article was first published on GreenTechMedia on January 21st. With the markets in free fall since the start of the year, many investors are rightfully worried about their portfolios' rapid declines. Although one of the biggest drivers of recent declines has been the fall in fossil fuel (especially oil) prices, clean energy investors have been far from immune. Is it time for clean energy investors to run...

Molycorp: Holding a Stinky Bag

by Debra Fiakas CFA   Last week news agencies reported plans by Molycorp (MCPIQ:  NYSE) to move forward with plans to sell major assets as part of a plan to emerge from bankruptcy.  Molycorp was the single largest producer of rare earths in the U.S. until it discontinued product at its Mountain Pass mine in Colorado.  Molycorp filed for bankruptcy protection in June 2015 after it became apparent that it could no longer support the debt on its balance sheet on historically low selling prices for its rare earth materials. The turn of the tide for Molycorp...

Interest Rate Increase? FuhGettaBoutIt!

by Debra Fiakas CFA There has been considerable fuss in recent weeks about the Federal Open Market Committee decision to raise its benchmark interest rate.  The one-quarter point increase has finally been announced and investors now are watching with bated breath to see how the increased cost of funds at the Fed ‘window’ will impact borrowing costs for companies large and small.  In our Beach Boys Index of alternative energy producers, we found a number of companies that rely on debt as a capital source.  However, not all energy producers have debt.  So when Janet Yellen...

Bearing The Interest Burden

by Debra Fiakas CFA Smaller companies frequently avoid debt as a capital source, relying instead mostly on equity.  After all common stock  holders are often content to wait for years for a dividend as the small, young company secures its market position and builds profits.  Pesky creditors are always knocking on the door for interest payments and principal return. Yet, a number of smaller companies included in our Beach Boys Index of alternative fuel producers have chosen to use debt. We reviewed a group of them to determine the impact of increase in interest rates that could...

Can Broad Shoulders Shake Off The Rate Hike?

by Debra Fiakas CFA Some investors may be surprised by the repercussions of an increase in the Federal Reserve’s benchmark interest rate.  The Federal Open Market Committee is expected to take action next week for the first time in nine years to increase the rate from near zero.  Odds makers have pegged the magnitude of the rate increase by a quarter percentage point. We decided to take a look at some of the companies in Crystal Equity Research’s Beach Boys Index composed of biofuel, ethanol, renewable diesel and other alternative fuel producers.  We looked to see which...

Investing For The Anthropocene

by Garvin Jabusch Jack Bogle is flat wrong. I mean, within his worldview and that of Modern Portfolio Theory, he’s right, but in the Anthropocene, he’s wrong. Bogle, founder and retired CEO of the Vanguard Group, is known for championing the superiority of low-fee index funds. His firm’s largest product, the $155 billion Vanguard 500 Index Fund is the perfect poster child for his philosophy. It closely tracks the S&P 500 Index of America’s largest companies, and it has a fee of only 0.06% inclusive. The S&P 500 has performed better than most actively managed portfolios over time, so...

Growing Market Skepticism Towards Chinese Renewable Energy

Bottom line: Weak share reactions to upbeat news from Trina, ReneSola and Ming Yang reflect investor skepticism towards new energy stocks, as they face lingering issues of overcapacity and phasing out of government subsidies. A flurry of upbeat news is in the headlines today from 3 of China’s largest new energy equipment makers, led by a return to the profit column for solar panel maker ReneSola (NYSE: SOL) after a year in the red. At the same time, wind power equipment maker Ming Yang (NYSE: MY) also announced its latest quarterly results that were quite upbeat, and solar panel...

Charitable Investments: How to Grow Your Portfolio While Making a Difference

by Mark Tan The country is currently experiencing a shift toward more sustainable living. In addition to the wide array of whole food markets and hybrid cars available to today’s consumer, many people also want their investments working for the greater good. Although these investments have been around for more than a decade, the past few years have seen substantial growth in the areas of charitable investments, sustainable 401ks, and green bonds. No matter your passion, your financial portfolio can make a difference in the world, while still generating profit for you. Charitable Investing 101...

Crowdfunding and Clean Energy

by Beth Kelly The digital era has enabled an “entrepreneurial explosion”, equipping ordinary people with the tools to invest in a myriad of early stage companies. Rather than investing millions of venture capital at once, interested individuals can use online platforms like Indiegogo and Kickstarter to invest smaller sums in projects they feel passionate about. Crowdfunding holds vast potential in the renewable energy sector in particular, opening up a world of opportunity for both investors and “green” project developers. Now that renewable energy technology is becoming viable and cost-effective, firms in the industry are turning to crowdsourcing...

Commodity Energy Vs. Technology Energy: This Changes Everything

by Garvin Jabusch We now live in a global economy with two fundamentally different types of energy: commodity-based in the form of fossil fuels and uranium, and technology-based, represented primarily by solar and wind. That observation is interesting as far as it goes, but what does it mean? The term renewable (as it pertains to energy) gets used so often that it is easy to forget what it really entails. For starters, tech-based renewables become less expensive over time, as demand for them drives scale, innovation, and improves cost structures in implementation (think about the last couple of computers...

Graphene: It Is All In The Strategy

by Debra Fiakas CFA In the recent series of articles on graphene we have found a number of companies working on more efficient production processes and as well as applications for this exceptional material.  So beguiling graphene is  -  conductive, strong and pliable.  Scientists and investors alike have thought certainly graphene can provide that all-important ingredient that enhances value and creates profits.  In this post we look at two more companies that claim real progress in commercializing graphene materials.  Based in the UK, Applied Graphene Materials (AGM:  LON; APGMF:  OTC) reported no sales in 2014 and...

The Pope and the Climates of Justice

by Jake Raden Pope Francis’s encyclical on global warming and environmental degradation, Laudato Si, identifies our disruptive effects on our climate as social justice and spiritual issues. “Those who possess more resources and economic or political power seem mostly to be concerned with masking the problems or concealing their symptoms,” he writes, lamenting that those with privilege lack a “sense of responsibility for our fellow men and women upon which all civil society is founded.” (Image Courtesy of: http://www.cgdev.org/page/mapping-impacts-climate-change) The image above is from the Center for Global Development and it’s one in a series that ranks...

Graphene Pixie Dust

by Debra Fiakas CFA Ever since British scientists worked a little magic with some scotch tape, the world has been captivated their discovery of graphene, the single atom thick material that can conduct electricity and is at once strong and bendable.  Investors have been dreaming graphene could be sprinkled across industry like pixie dust, creating valuable new products and driving company valuations to lofty heights.  Reality has been a bit less grand. To be clear, there have been successes.  As noted in the June 9th article, “Graphene in the Oil Patch,” the wonder material has been found...