Tom Konrad CFAJuly was a hard month for the stock market and clean energy stocks in particular. My broad market benchmark of small cap stocks, IWM, fell 7% and is down 2.7% for the year, while my clean energy benchmark PBW fell 9% and has slid into the red for the first time. It is down 0.1% for the year to date. The mostly defensive stocks in my 10 Clean Energy Stocks for 2014 model portfolio fared relatively well, but they were still down 2% for the month. For the year to date, the model portfolio has held up well, with a total return of 4.8%.
(Note that the monthly numbers are for July 3rd to August 5th, and the YTD numbers are from December 26th to August 5th. I use numbers as of when I have time to write, rather than strict month-end in order to make these updates as timely as possible.)
Individual Stock Notes
(Current prices as of August 5th, 2014. The "High
Target" and "Low Target" represent my December predictions of
the ranges within which these stocks would end the year,
barring extraordinary events.)
Sustainable Infrastructure REIT Hannon Armstrong has fallen
fairly sharply in recent weeks, on minimal news. The company
a deal to finance home solar projects for Sunpower (NASD:SPWR)
which I would expect to have a small positive effect on the stock
price. I find the decline puzzling, but consider it a buying
opportunity. Although Hannon Armstrong is already my largest
holding, I recently sold some $12.50 March 2015 puts.
If there is trouble that the market knows about but I don't, you
can find out when HASI reports second quarter earnings on August
11th. I'll find out when I come back from a week long
backpacking trip on the 16th, but I'm not worried.
For readers wanting a detailed overview of HASI all in one place,
one just came out on Seeking Alpha.
2. PFB Corporation
12/26/2013 Price: C$4.85. Low Target: C$4. High Target: C$6.
Annualized Dividend: C$0.24.
Current Price: C$4.36. YTD Total C$ Return: -7.6%. YTD Total US$ Return: -9.7%
3. Capstone Infrastructure Corp (TSX:CSE. OTC:MCQPF).
12/26/2013 Price: C$4.44.
Low Target: C$3. High Target: C$5.
Annualized Dividend: C$0.30.
Current Price: C$4.46. YTD Total C$ Return: 33.5% . YTD Total US$ Return: 30.5%
Independent power producer Capstone Infrastructure held steady
throughout the month, without significant news. The gain for
the month arose from the payment of its regular C$0.075 quarterly
4. Primary Energy
Recycling Corp (TSX:PRI,
12/26/2013 Price: C$4.93. Low Target: C$4. High Target: C$7.
Annualized Dividend: US$0.28.
Current Price: C$6.00. YTD Total C$ Return: 24.4% . YTD Total US$ Return: 22.3%
Waste heat recovery firm Primary Energy announced a regular
quarterly dividend of 7¢ US to holders of record on August 15th.
but there was no other significant news. The gain shown here
was mostly a big jump at the close today (Aug 5th.) It might just
be a blip (the stock is thinly traded), or there may be trading
based on rumors of some real news about to be announced.
[formerly ACCEL], OTC:ACGPF).
12/26/2013 Price: €13.59. Annual Dividend €0.55 Low Target: €11.5. High Target: €18.
Current Price: €13.90. YTD Total € Return: 6.3% . YTD Total US$ Return: 3.5%
Bicycle manufacturer and distributor Accell Group reported strong results for the first half of the year, and said it expects the strength to continue in the second half. Since the company resets its dividend annually based on profits, we can expect next year's dividend to be significantly higher than this year's €0.55. The company has been streamlining its operations discontinuing its relatively unprofitable mass market bicycles, and focusing on its higher end models. The company also sold its small fitness unit. Both of these moves mean that Accell will be better able to capitalize on its leadership in e-bikes as the market for assisted pedaling continues to grow rapidly.
6. New Flyer Industries
12/26/2013 Price: C$10.57. Low Target: C$8. High Target: C$16.
Annualized Dividend: C$0.585.
Current Price: C$12.89. YTD Total C$ Return: 25.2% . YTD Total US$ Return: 22.3%.
Leading transit bus manufacturer New Flyer will announce second
quarter results about the same time this will be published on
August 5th. The market expects good news, if price action is
The stock of energy performance contracting firm Ameresco jumped
in response to its second
quarter results on July 31st. Although the company did
not raise its guidance for the year, management's tone regarding
the market for its services was very positive. This was a
big change after two years of mostly negative surprises caused by
customers delaying and scaling back projects.
Management also noted that they may be able to upgrade some of
their existing landfill gas plants to take advantage of new rules
allowing higher quality landfill gas to qualify for the incentives
designed to encourage cellulosic biofuels.
9. MiX Telematics Limited (NASD:MIXT).
12/26/2013 Price: $12.17. Low Target: $8. High Target: $25.
Current Price: $9.86. YTD Total ZAR Return: -12.3%. YTD Total US$ Return: -15.8%
Global provider of software as a service fleet and mobile asset management, MiX Telematics did not report any significant news.
10. Alterra Power Corp.
12/26/2013 Price: C$0.28. Low Target: C$0.20. High Target: C$0.60. No Dividend.
Current Price: C$0.315 YTD Total C$ Return: 12.5% . YTD Total US$ Return: 9.9%.
Renewable energy developer and operator Alterra Power gave updates
on its uninterrupted progress on its Jimmie Creek run-of-river
hydro and Shannon Wind projects, as well as a loan it is
negotiating to finances those investments. It expects to
close on the loan in the third quarter.
Two Speculative Clean Energy Penny Stocks for 2014
Ram Power Corp (TSX:RPG,
12/26/2013 Price: C$0.08. Low Target: C$0.00. High Target: C$0.22. No Dividend.
Current Price: C$0.02 YTD Total C$ Return: -75% . YTD Total US$ Return: -75.5%
Terminal US$ Return -57% (when I said to sell on June 3rd.)
Geothermal power developer Ram Power's stock continued to slide
since the company has not announced any progress in negotiation
with its creditors.
Finavera Wind Energy
12/26/2013 Price: C$0.075. Low Target: C$0.00. High Target: C$0.22. No Dividend.
Current Price: C$0.11 YTD Total C$ Return: 46.7% . YTD Total US$ Return: 43.3%.
Wind project developer Finavera received the final payment from
Pattern Energy Group (NASD:PEGI)
for its Miekle Wind project. This follows the announcement
of the sale of its 10% stake in Cloosh Wind project in
Ireland. Comparing the announced payments to my
March estimates, the Cloosh payment was at the low end of my
expected range, but the Miekle payment was towards the high
end. All together, I estimate Finavera's net cash per share
is at least twice the current stock price of C$0.11.
The company now has cash to more than settle all its outstanding liabilities, and will provide details of its long-awaited strategic plan in advance of the Company's annual general meeting on September 12th. The company's CEO, Jason Bak, says that the reason it has taken so long to present this plan to shareholders was courtesy to its potential partners, who did not want to publicly commit to the plan until the money was available to implement it.
If shareholders do not like the plan when they find out what it
is, Bak has previously said that we will have the option of voting
for the strategic plan or for returning the cash to shareholders.
Although the market pulled back in July, earnings announcements
for these picks have generally been positive. This is
especially for Ameresco, where two years of disappointments seem
to be ending, and Accell Group which is showing the benefits of a
couple years of reorganization into a leaner, more focused
In addition to the good news in the main portfolio, speculative
pick Finavera seems to be on the cusp of paying off more than
enough to compensate for the losses realized in June on the other
speculative pick, Ram Power.
Disclosure: Long HASI, PFB, CSE, ACC, NFI, PRI, AMRC, MIXT, PW, AXY, FVR, PEGI.
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.