Alternative Energy Stocks

Jim Lane As the renewables industry searches for effective business models, a strong one emerges in its midst. We look at Green Plains (GPRE) and its businesses. A recurring theme among the 300+ delegates at ABLC Next this week in San Francisco is the recognition that successful companies change the world not science projects, or failed companies and that any route that leads across the Valley of Death to commercial success is the first step towards a sustainable economy, and that strong lead products are the oxen that get settlers across the desert. Renewable...

Doug Young Bottom line: Canadian Solar is likely to target at least $100 million in an IPO for its power plant-building unit before year end, which could be an attractive investment alternative for buyers of traditional utility stocks. Just days after announcing big new financing for its unit focused on solar power plant construction, Canadian Solar (Nasdaq: CSIQ) is taking a big new step by disclosing it is preparing an IPO to separately list that unit. The move marks the latest wrinkle in the evolving story for Chinese solar panel manufacturers, which are quickly becoming their own best customers...

Tom Konrad Ph.D., CFA In the two months since my last "monthly" update, clean energy stocks fell precipitously in September and then recovered most of those losses in October, although not for the year.  Income focused Yieldcos have been particularly badly hit, but my income heavy  Ten Clean Energy Stocks for 2015 model portfolio has done quite well in spite of this.  I attribute this resilience to my emphasis on current dividend income, rather than the dividend plus double-digit growth that many Yieldcos were promising before the collapse in their stock prices rendered...

by Debra Fiakas CFA This week Pattern Energy Group’s (PEGI:  Nasdaq), the independent wind power generator, is scheduled to report sales and earnings for the quarter ending September 2015.  The company has cultivated a strong following among analysts for a company its size.  Nine estimate contributions have gone into a consensus estimate of $87.2 million in sales for the quarter, resulting in a net loss of a penny per share.  If achieved the sales hurdle would represent 22% growth over the same quarter last year.  A penny loss may not seem impressive, but it is substantially better than...

by Debra Fiakas CFA The drumbeat of deals in the ethanol industry is sounding louder, or so it seems from the proliferation of notices in my e-mail inbox.  I received no less than four messages in one morning from ethanol producer Green Plains, Inc. (GPRE: Nasdaq) heralding the purchase of the Hopewell Ethanol plant in Virginia from FutureFuel, Inc. (FF:  NYSE).  The acquisition represents the ninth transaction for Green Plains in the last five years, adding another 60 million gallons in annual production capacity to Green Plains’ existing total capacity of 1.02 billion gallons.   Indeed, Green...

Doug Young Bottom line: New financing deals for Canadian Solar and Trina reflect the growing role of solar panel makers as power plant builders, and could provide some stability to the sector by providing a more reliable stream of new projects. Two big new financing deals are shining a spotlight on a major shift taking place in the solar panel sector, with manufacturers increasingly moving into the field of solar farm development. The shift is seeing solar panel makers become their own best customers, buying up panels for use in solar farms that they build themselves. The...

by Tom Konrad Ph.D., CFA On a podcast recorded on September 14th, I said I thought that Yieldco stocks had bottomed at the end of September.  Two weeks later, that call still looks like a good one (see chart.) I'm starting to hear optimistic noises from other Yieldco observers, although the general tone remains quite bearish. Why do I think September 29th was the likely bottom? End of quarter.  Some institutional investors such as mutual funds reshuffle their portfolios at the end of the quarter so that they don't have...

Doug Young Bottom line: Tesla’s newly announced modest China sales and announcement of a plan for potential local production reflect the uphill road it faces in the Chinese market, which is unlikely to get much easier in the next 2 years. China is fast becoming the land of promising upstart companies that failed to reach their potential, with word that former new energy superstar Tesla (Nasdaq: TSLA) has posted very ho-hum car sales in a market where it once held out big hopes. The rare China sales figures...

by the Climate Bonds Team Hannon Armstrong’s (HASI) second green ABS, $118.6m, will save 0.39 tons of GHG annually per $1,000!  ($100.5m, 4.28%, 19 yr, A and $18.1m, 5.00%, 19 yr, BBB) Hannon Armstrong (NYSE:HASI) closed its second green ABS bond (Sustainable Yield Bond) following its inaugural issuance in December 2013. The ABS was a private placement split into two tranches with different credit ratings (from Kroll Bond Credit Rating Agency): $100.5m with a rating of A and 4.28% interest rate, and $18.1m with a rating of BBB and 5.00% interest rate. Both tranches have a 19-year tenor....

by Susan Kraemer As unrealistic expectations of dividend growth are scaled back, yieldcos are now on a more sustainable path. Weaknesses in the US yieldco model came into sharp relief this summer as share prices fell along with oil and gas stocks. This was in part due to investor confusion about energy stocks but also in response to a flaw in US yieldco expectations. Manager of the Green Global Equity Income Portfolio and AltEnergyStocks.com editor Tom Konrad Ph.D., CFA had warned of the looming potential for exactly this kind of market correction in a conversation a...

by Tom Konrad Ph.D., CFA Since I have not had much time to write for AltEnegyStocks, I thought I'd share with readers some notes I wrote for investors in the JPS Green Economy Fund, a hedge fund for which I'm director of Research, regarding our holdings in the third quarter: In the third quarter, we took advantage of the general decline of clean energy "YieldCos" to add two of these owners of wind and solar farms to our portfolio at attractive yields.  Pattern Energy Group (PEGI) is an owner of wind farms having long term power purchase agreements...

by Debra Fiakas CFA Energy Recovery (ERII:  Nasdaq) has announced a breakthrough license of its hydraulic fracturing pump to oil and gas patch service provider Schlumberger (SLB:  NYSE).  Called the Vorteq by Energy Recovery, the pump features the company’s core pressure exchange technology, representing an entirely new approach to driving the chemical-laced water producers send deep into the earth to extract oil and gas.  Energy Recovery develops and markets components and equipment for fluid flow and pressure cycles found industrial processes.  Its patented pressure exchange devices are designed to take advantage of energy created in...

by Debra Fiakas CFA On Friday Rubicon Technology, Inc. (RBCN:  Nasdaq) announced the appointment of a new chief operating officer to manage the company’s sapphire materials production.  Rubicon is a producer of materials used in electronics components, including the company’s specialty, monocrystalline sapphire materials.   Rubicon chose a seasoned operator for the COO post, which now encompasses functions previously carried about by managers in two different positions.  The new hire, Hany Tamim, was previously with SunEdison (SUNE:  Nasdaq), the developer and producer of solar cells and modules.  He has experience in managing crystal growth and...

Jim Lane Liberals sweep to victory in Canada; Trudeau to become Prime Minister, pledging sharp increases in infrastructure investment and a renewed focus on clean technology. In Canada, the Liberal party, under the leadership of 43-year old Justin Trudeau, swept to victory in the Canadian federal elections. As of 6am Eastern time, the Liberals have won 184 seats 14 seats more than needed to form a majority government. Prime Minister Stephen Harper’s Conservative Party won in 99 ridings, a loss of 60 seats, while the New Democratic Party has reeled in 44 seats, a...

Readers may be interested in listening to this podcast. Where Stephen Lacey and Shayle Kann of GreenTechMedia speak with me about the current YieldCo landscape. Follow this link to The Interchange Podcast. -Tom Konrad, Editor

Doug Young  Bottom line: Yingli’s sudden repayment of 70 percent of a maturing bond shows the government may provide partial assistance for struggling solar panel makers, in an effort to engineer an orderly shut-down of these weaker companies. The story of China’s troubled solar panel sector has taken an unexpected twist, with word of a last-minute partial reprieve for Yingli (NYSE: YGE), one of the weakest major players that looked set to default on a large debt payment. The development came quite quickly and had a few unusual elements that hint strongly at government intervention. Yingli’s case is...