Energy Efficiency

Tom Konrad CFA The high upfront cost of efficient buildings (and efficiency in general) is more than offset by the significant long term rewards, as you can see from the McKinsey chart below. Despite the long term benefits, the upfront cost is often a barrier, especially to government entities in today's tight budgetary environment. Performance contracting offers them a way to square the circle between the long term budget benefits of efficient buildings and the often significant capital cost. This works by funding the capital improvement with debt secured by future energy savings. An...

Stocks may be expensive now, but they won't be forever.  Five energy efficiency plays to buy when they're cheap again in efficient HVAC, desalination, thermal imaging, and lighting. Tom Konrad, Ph.D., CFA This article continues my Clean Energy Stocks Shopping List series.  In the first, I looked at five clean transport stocks I'll be looking to buy when the market falls.  In the second, I took a step back, and outlined why it makes sense to wait for better prices than to buy these companies now.  Here are five stocks I'll be looking to buy  in my all time...

by Debra Fiakas CFA Despite reporting the highest gross profit margin in Energy Recovery's (ERII:  Nasdaq) history, investors were sorely disappointed with financial results in the Company’s second quarter ending June 2017.  On the first day of trading following the earnings release the share price gapped downward and closed even lower under above average trading volume.  This is likely because there was some expectation that Energy Recovery could finally report a net profit in the quarter as sales of the Company’s flagship PX Pressure Exchanger to the desalination market had appeared to pick up in recent months.  Unfortunately the Company reported...

David Gold Invest in a solar, biofuels, or LED lighting company, and nobody will question the company’s cleantech pedigree.  Invest in a manufacturer of network switch upgrades for telephone companies, then call it “cleantech” and you’ll see a lot of raised eyebrows.  I know, because we did just that. We are investors in Aztek Networks, a company that makes replacements for the TDM switches that handle much of the phone traffic from standard landline phones.  Telecom companies are excited about Aztek’s product because it enables them, for the first time, to incrementally switch out their old...

Portfolio theory can lend insights into which carbon abatement strategies policymakers should pursue.  If policymakers listen, what will it mean for green investors? Tom Konrad, Ph.D., CFA Good Info, Not Enough Analysis I've now read most of my review copy of Investment Opportunities for a Low Carbon World.  The quality of the information is generally excellent, as Charles has described in his reviews of the Wind and Solar and Efficiency and Geothermal chapters.  As a resource on the state of Cleantech industries, it's generally excellent.  As an investing resource, however, it leaves something to be desired.  Each chapter is written...

Tom Konrad CFA With earnings announcements coming fast and thick over the last two weeks, it has been all I can do to keep up, let alone go into detail about the companies I usually follow, as I did with Maxwell Technologies (NASD:MXWL) earlier this week. (Note: I am currently long Ameresco and Short Maxwell.) Rather than remain completely silent, I’m going to attempt to focus on the main take-aways I’ve gleaned from the filings and earnings calls, starting with Ameresco’s (NASD:AMRC) potentially confusing earnings. Another “Miss” Ameresco again missed First Call analysts’ average earnings estimates for the...

Tom Konrad CFA The climate of uncertainty caused by deadlock in Washington is leading to penny-wise, pound foolish behavior at all levels of government, and Ameresco, Inc. (NYSE:AMRC) felt the pain severely in the third quarter. Framingham, MA based Ameresco helps institutions, mostly government entities, improve their energy infrastructure and reduce energy use without capital outlays or increases in energy budgets.  It does this by using the cost savings from energy efficiency to finance the capital outlays, allowing schools, hospitals, and the like to insulate or install solar panels while sticking to existing budgets, and often producing some savings.  To take three examples...

Tom Konrad, CFA PFB Corporation is a manufacturer of energy efficient building materials, including SIPD and ICFs, based on expanded polystyrene.  The company's sales have fallen in response to the housing downturn, but less so than most of the housing industry, despite a strong balance sheet and cash flow.  I consider the stock a buy below C$6. NOTE: I'm taking a break in order to take a trip to California for some vacation and to moderate a panel at the San Francisco Moneyshow.  This article was written in January 2010, but I delayed publication for seven months because...

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...

Tom Konrad CFA Rockwool insulation (Photo: Achim Hering) Signs of Green Building Growth Rockwool International (COP:ROCK-B,OTC:RKWBF) recently announced the establishment of the insulation manufacturer’s first US factory, in Mississippi, about 30 miles outside Memphis, Tennessee.  The firm has been seeing double-digit annual sales growth in North America, driven by interest from do-it-yourself chains and insulating commercial buildings, and expects this growth to continue. The company’s rock wool insulation, sustainably made from stone and recycled materials, can provide improved fire protection when compared to traditional insulation products. Rockwool is far...

Tom Konrad, CFA Pioneering light-emitting diode (LED) maker Cree, Inc. looks overvalued. Light-Emitting Diodes, or LEDs, can be made to shine more brightly by increasing the power to them.  This has the unfortunate effect of overheating the leads and shortening the lifespan of the LED.  A similar effect may soon hit the stock of LED maker, Cree, Inc. (CREE.) Since I began the tradition, Cree has been a mainstay of my annual portfolio of ten stocks for the next year, published each January (See the 2008 and 2009 lists.  The Cree-free 2010 list is here.)  LEDs have been among...

Debra Fiakas Power One (PWER) looks like a promising contrarian play. It is a scenario that has plays out quarter after quarter.  A leading company in popular sector reports decent results, but surprises investors with guidance below the prevailing consensus.  Then the stock price crashes as sell-side analysts cut estimates, price targets and ratings.  It is a situation that many investors fear as they see once profitable stock positions lose value. Not the contrarian investor!  There are potential profits to be made for the obstinate, but fearless investors willing to do their homework.    This...

Tom Konrad CFA After the close on Thursday, November 7th, Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI) declared third quarter earnings.  Results were in-line with my, and other analysts’ expectations: Earnings per share (EPS) of 14 cents, and a declared dividend of 14 cents as well. This more than doubled the second quarter’s 7 cent EPS and 6 cent dividend. Note: I have a large long position in HASI. HASI remains on track to reach managements’ dividend target of “over 7% of the $12.50 IPO price” (22 cents a quarter,) and provided some additional guidance for future dividends....

by Debra Fiakas CFA In early December 2014, Energy Recovery (ERII:  Nasdaq) staged an analyst and investor event in New York City principally to introduce its most recent technology innovation, VorTeq.  The product is a hydraulic fracturing solution for the gas industry.  Unlike its other products, the VorTeq is a colossal apparatus requiring a semi-tractor to transport it into place as a replacement for the ‘missiles’ now found at natural gas well sites. VorTeq Animation In the current configuration, high pressure pumps are used to drive a blend of fracturing sand, water and chemicals down into the well hole.  Pump components,...

Two months ago, I was talking to an experienced entrepreneur who was exploring business models to provide geothermal heat pumps to households.  At first blush, it seems like a great idea.  Geothermal heat pumps often have payback periods of under five years, which translates into internal rates or return in excess of 20% over the 30 year life of the system.  With plenty of room for a business to recoup its cost of capital and leave some money on the table for the consumer, it's amazing that there isn't a company in every jurisdiction already active in the market.  ...

As I mentioned in a previous post (and also a purchase of LSGP.ob), I have become very interested in the potential investment opportunities in companies that are involved in the conversion of typical halogen and incandescent lighting over to solid state lighting (i.e. LED.) With that said, I wanted to pull back the curtain to show you my process and thinking when I enter a new investment space. The potential returns for the companies in this space can be quite large over the next 10 years. Many municipalities and large corporations are looking at the potential...