A Taste Of Things To Come
John Rubino
 The past month's stock market bounce was probably of the dead cat variety, but it did accomplish one thing: It showed the world how clean tech stocks will behave in a bull market. Check out the following list:
| Company/Ticker |
Gain from 2008 bottom |
| American Superconductor (AMSC) |
225% |
| Cree (CREE) |
123% |
| EnerNOC (ENOC) |
340% |
| First Solar (FSLR) |
116% |
| Itron (ITRI) |
65% |
| Ormat (ORA) |
81% |
All of these companies have three things in common, and understanding these commonalities will be key to playing the sector going forward.
1) They're in clean tech fields that are here and now rather than prospective. Smart grid, geothermal, solar, and green building are all fields where the technologies, though still progressing, are ready for market and generating orders and cash flow. Fuel cell makers and biofuel stocks aren't behaving nearly as well because their technologies are still a few years from market.
2) They're the leaders in their respective fields. First Solar's thin film solar panels have the lowest cost per watt and the company has proven its ability to deliver in quantity. So even in a glut of solar panels it's picking up big orders from utilities around the world. Cree is the leading maker of LED lighting, Ormat is the leading geothermal company, and Itron and EnerNOC are the top smart-grid firms. American Superconductor makes the high-capacity power lines that every utility has decided it needs. The lesser lights in these fields will soar in the later stages of the clean tech bull market, but early on the leaders get the bulk of the interest.
3) They're reporting positive results. First Solar's last few quarters have been blow-outs. Cree recently upped its guidance because of strong orders, and American Superconductor has been winning contracts in Asia that appear to be just the tip of a very big iceberg.
So while this rally, like I said, is suspect (watch long term interest rates - if they keep spiking, stocks will drop like a rock), somewhere out there the economy and the market will make a real bottom and start a sustainable recovery. And when they do stocks like this will lead the way.
For a more in-depth look at Clean Tech investing, see Clean Money: Picking Winners in the Green-Tech Boom
www.greenstockinvesting.com |
