Alternative Energy Stocks

by Sean Kidney   Earlier this month CitiBank (NYSE:C) and Bank of America Merrill Lynch (BoAML; NYSE:BAC) launched, via a special EuroWeek report on ‘sustainable’ capital markets, a “Framework for Green Bonds“. This is potentially a big development. In the paper the two banks laid out a ‘vision’ for the green bonds market and called for a Green Bonds Working Group of issuers, dealers and investors to be formed to drive the evolution of the nascent market. The paper calls for debate about the green bond market, especially about...

by Debra Fiakas CFA Last week Canadian Solar (CSIQ:  Nasdaq) bagged another solar module supply agreement  -  this time on the home turf of some of its staunches competitors.  Of course, the company has its own manufacturing foothold in China.  Canadian Solar is to supply its solar modules to China Three Gorges New Energy Company to a 100 megawatt solar power project in Guazhou County in Gansu Province.  The modules shipments will be complete by the end of the December 2013, suggesting all the sales will end up recorded yet in the current fiscal year. ...

Doug Young  Sun breaking through clouds photo by Tom Konrad Spring is most definitely in the air this week for embattled solar panel makers, with Canadian Solar (Nasdaq: CSIQ) and Shunfeng Photovoltaic (HKEx: 1165) emerging as new sector leaders with different pieces of upbeat news. From my perspective the Canadian Solar news is the most exciting, even though some may say it doesn’t come as a big surprise. The company announced it will post a net profit for the third quarter, becoming the first major solar firm...

Tom Konrad CFA Disclosure: Long BEP, HASI. Canada’s stock exchanges have long had the lead as the place for energy infrastructure companies to list.  This includes green energy, as well as the fossil fueled sort.   Because Canada’s reporting rules are somewhat less stringent, and its markets less liquid than those in the US, the large number of offerings trade at lower valuations and higher yields than do their (few) US-listed equivalents. In fact, it was the promise of a higher valuation which led Brookfield Renewable Energy Partners (NYSE:BEP, TSX:BEP-UN) to obtain its US listing on June...

Doug Young  Speed bump photo via BigStock After a year of relative calm in which its shares have surged, electric vehicle (EV) aspirant BYD (OTC: BYDDF; HKEx: 1211; Shenzhen: 002594) is once embroiled in a couple of mini-scandals involving its labor practices and technology in California. While I doubt that either of these problems will have a long-term impact on the company, they do highlight the many speed bumps that BYD and other Chinese automakers will face as they move into the global marketplace. The risks are...

Doug Young Former solar energy pioneer Suntech (NYSE: STP) is getting caught in an increasingly complex web of global forces as it tries to emerge from bankruptcy, with the latest coming from its hometown of Wuxi and from a bankruptcy court in New York. While such tugs-of-war probably aren’t uncommon in such a complex case, Suntech’s strong international connections mean its reorganization could take longer than many previously expected. The case also highlights the unusual risks associated with companies that do so much trans-border business. The latest developments have seen Suntech’s hometown of Wuxi emerge as a major new...

Tom Konrad CFA Disclosure: Long BEP, HASI. NRG Yield (NYSE:NYLD) was spun out of its parent, NRG Energy, Inc. (NYSE:NRG) in July, and has since been greeted with enthusiasm by investors.  The stock priced at $22, 10% over the mid-point of its expected range, and the underwriters exercised their full over-allotment option. NRG Yield presents itself as an owner and operator of contracted renewable and conventional electricity generation, as well as thermal infrastructure assets.  (Thermal infrastructure provides heat or cooling to businesses for use in their operations.)  The company has a green tinge because of its wind and...

Tom Konrad CFA Pattern Energy's Gulf Wind Farm in Armstrong, Texas Disclosure: Long BEP. Pattern Energy Group (NASD:PEGI, TSX:PEG) completed a very successful Initial Public Offering (IPO) on the Nasdaq and Toronto stock exchanges on September 27th.  Not only did the shares price at $22, near the top of the expected range, but the underwriters exercised their full over allotment option to purchase 2.4 million shares in addition to the initial 16 million offered.  Total proceeds from the offering were $404.8 million.  Most of the proceeds went to Pattern Energy Group, LP (PEGLP) in consideration for a...

By Jeff Siegel There's no doubt about it: 2013 was a fantastic year for alternative energy investors. The big story this year was Tesla (NASDAQ: TSLA). A company that we began touting years before the company even went public, Tesla soared this year, taking the stock from $34.71 in January to a high of $194.50 a share in September. Folks, a 460% gain from an electric car company in just nine months would've been laughable in 2013. Today, it's the one of the most hyped stories in the world of finance... And if you listened to me...

by Debra Fiakas CFA U.S. Geothermal (HTM:  AMEX) is scheduled to report third quarter 2013 financial results on November 15th, taking every day allowed to a public company to reveal the fruits and labors of a quarter.  There will be plenty to talk about in the conference call with analysts and investors.  USG closed a loan financing to support the first phase of its San Emidio geothermal power project in Nevada.  The loan valued at $30.7 million bears a fixed interest burden of 6.75% will replace a $25 million construction loan for the project and supply working capital...

Ormat Heat exchanger at GKW Landau. Geothermal water evaporates the carrier medium. Preheater and the evaporator. The steam line above connects to the turbine. Photo by Claus Ableiter via Wikimedia Commons by Debra Fiakas CFA Shares of geothermal power producer Ormat Technologies (ORA:  NYSE) are trading at 29.2 times the 2014 consensus estimate of $0.93 per share.  That multiple looks fair compared to growth expected at Ormat in the next year, but more dear against the company’s long-term growth prospects.  The stock has been flying off...

Tom Konrad CFA Disclosure: I am long PW and HASI. In a rational world, the sunniest places would have the warmest reception for solar technology and investment.  While solar is having its day in the sun in Hawaii, state incentives make the economics of photovolatics equally attractive in Vermont, a state not known for its sunny skies.  And while California is famous for its rapid deployment of solar, the economics are at least as good in Washington state, New York, New Hampshire, and chilly Maine. It’s not only the economics of solar which can counter-intuitively get better...

Jim Lane In New York, in the wake of a $37 million Q1 loss in its sugar unit, Bunge CEO Soren Schroder, who took the reins of the company in June, announced yesterday that the trading giant is commencing what he termed a “thoughtful comprehensive review” for its sugar business, including a potential sale of all the assets. The company, which announced a $137 million overall quarterly loss, after posting a Q4 loss of $599 million in June. The Q4 loss included write-downs and charges of $683 million, including a $327 million write-down in its sugar...

By Harris Roen A significant alternative energy investment theme with potential for growth over the next few years is offshore wind. This article looks at the promise of marine based wind, potential pitfalls, and names three investments that could benefit from large-scale offshore wind development that is likely coming. The Potential of Offshore Wind In 2011, the U.S. Department of Energy and the U.S. Department of Interior jointly published a national offshore wind strategy. According to the report, in areas with less than 100 feet of water the generating potential of offshore wind equals...

A new investment architecture is set to emerge By John Fullerton and Tim MacDonald Stock markets are not as portrayed on TV, the nerve center of capitalism.  Stock markets are nothing more than tools to facilitate the exchange of stock certificates that represent contractual rights that have little to do with real ownership. Today’s stock markets are primarily about speculating on the future prices of stock certificates; they are largely disconnected from real investment or what goes on in the real economy of goods and services.  It’s time for real investors such as pension funds and endowments to...

by Debra Fiakas CFA   In early October 2013, Broadwind (BWEN:  Nasdaq) announced over $100 million in new wind tower orders, tipping the value of orders received in the year 2013 over the $300 million mark.   Wind energy has been a fickle market to pursue, alternatively showing great promise as policy makers show support for renewable energy sources and then sinking as cheap natural gas substitutes flood the market. Broadwind’s expertise is in gearing of various kinds.  In addition to supplying gearboxes for wind turbines, the company offers maintenance services to tower owners.  Oil in gearboxes...