Alternative Energy Stocks

Doug Young Bottom line: Trina’s new loan and BYD’s uncertain outlook for EV sales this year reflect continued reliance of new energy technology companies on state support, which could pressure them as government incentives get retired. Two new energy stories are in the headlines today, reflecting the progress but also the continued reliance on government support that this up-and-coming group of companies faces. That particular reality isn’t new, though some who were hoping the industries would become commercially independent more quickly may be disappointed. But more important, this reality could challenge many of the companies in the...

by Debra Fiakas CFA The most recent report by the American Society of Civil Engineers (ASCE) gives a grade D+ for U.S. infrastructure as of the end of 2013.  Not a very good grade, but an improvement over the plain D grade that had been handed out four years earlier.  With the travesty of the water contamination in Flint, Michigan during 2014 to 2015, the ASCE report should carry special interest.  The threat to the health of the Flint community could be found in anywhere in the U.S. The executive summary of the ASCE 2013 report does...

by Debra Fiakas CFA Earlier this week nuclear fuel technology developer, Lightbridge Corporation (LTBR:  Nasdaq), reported year-end 2015 financial results and provided an update on recent accomplishments.  Not unexpectedly, Lightbridge reported a net loss of $4.3 million or $0.24 per share for the year.  During the year the company scraped together $900,000 in revenue from consulting services, an effort to leverage the expertise of its scientists and engineers as they continue work on new fuel technologies.  The contribution margin of the consulting work was $216,239  -  not nearly enough to cover administrative spending or the costs of...

Jim Lane In California and Canada this week, BioAmber (BIOA), Pacific Ethanol (PEIX) and the former Solazyme (SZYM) reported their Q4 and year-end results, providing between them a fascinating look at the evolution in the fuels, renewable chemicals, specialty products and nutrition that make up the advanced bioeconomy. In advanced nutrition The most spectacular news of the week belonged to TerraVia (formerly SolaZyme), which landed a 5-year, $200 million “baseload” offtake deal with Unilever, which provides a huge lift for investors and validates the economics and performance of the company’s first commercial plant, which it operates in a...

by Sean Kidney and the Climate Bonds Team Working on climate change involves reading a lot of reports. A lot. My general view nowadays is “Enough already! Can you we just do now and stop theorizing?” But sometimes you come across a report and you find yourself sitting up in your seat and shouting “Yes Yes Yes” like that scene with Meg Ryan in the movie When Harry met Sally. It usually means the report is saying what you’d like to say, but much better; and so it is with the McKinsey Center for Business and...

by Debra Fiakas CFA This week Darling Ingredients (DAR:  NYSE) reported financial results for the quarter ending December 2015, demonstrating management’s collective ability to manage margins in a period of low inflation.  The fourth quarter 2015 top-line was $809.7 million, providing $84.4 million in net income or $0.52 per share.  Revenue was 19.1% lower than the same period last year, but net income increased by 20.7% year-over-year.  Weak commodity prices led to lower sales volumes and selling prices that translated into lower year-over-year revenue.  At the same time the commodity market compression also reduced raw materials...

by the Climate Bonds Team Hyundai Capital Services issues first Korean corporate green bond for hybrids and electric vehicles (5yrs, 2.87%, $500m) Hyundai Capital Services, the subsidiary of Hyundai Motor Company (005380.KS) that provides loans and leases for new Hyundai and Kia cars, issued a $500m green bond. The inaugural green deal has a 5-year tenor and fixed semi-annual coupon of 2.87%. Lead underwriters for the deal were Bank of America Merrill Lynch, Citi, and Credit Agricole. The green issue is the first corporate Korean green bond and only the third out of Korea after KEXIM’s initial...

Jim Lane Solazyme undergoes Focus Reassignment Surgery and re-emerges as TerraVia. Industrials to spin off, nutrition the focus now. The what, the why, and the “why now?” In California, Solazyme (SZYM) said that it is now focusing exclusively on food, nutrition and specialty ingredients, renaming the company TerraVia. Having elevated CEO and co-founder Jonathan Wolfson to the Executive Chairman post, the company says it is on the hunt for a food-business CEO, and has raised $28M from a group of foodie investors including Glenhill Capital, VMG Partners, PowerPlant Ventures, ARTIS Ventures, Simon Equities and several influential food industry...

Jim Lane Despite a dismal beginning to earnings season, as Amyris, Arcadia disappoint, the Eco-Emirates of Emeryville look set for huge expansion in 2016. In California, Amyris (AMRS) reported Q4 revenues of $9.6mn and a net loss for Q4 of $41.9 million ($34 million after elimination of non-recurring items), well below Wall Street consensus estimates of $32.4 million. “The fourth quarter resulted in our best renewable product sales quarter to date during 2015 while also highlighting our challenge in completing our product finishing and shipping in time for one of our customers,” said Amyris CEO John Melo,...

United Launches 50% Biofuel Flights On LAX-SFO Route Jim Lane In California, United Airlines (UA) will be using jet biofuels produced by AltAir using Honeywell (HON) UOP technology on up to 150 flights a day out of Los Angeles, the Digest has learned. March 11. A two week, 14-day Los Angeles to San Francisco service will launch United’s jet biofuels plan. After the first two weeks, “pretty much all flights out of LAX will have a component of biofuel,” said a person familiar with the United plan. Flights are expected to begin almost immediately. Depending on...

by Debra Fiakas CFA Biodiesel and biochemical producer FutureFuel Corporation (FF:  NYSE) will report fourth quarter 2015 financial results after the market close today.  No conference call will be held due to low attendance on recent calls.  The single published estimate for FutureFuel is for $0.28 in earnings per share on $122.5 million in total sales.  Despite an increase in this estimate in the last week, the number still represents a significant decrease in earnings compared to the prior-year period.  The Company has missed the consensus estimate in both of the last two quarters and we do not...

by Debra Fiakas CFA Three public companies end our series on wave and tidal power development.  Marine and HydroKinetic energy has only recently received enough interest from scientists and engineers to merit an acronym  - MHK.  It is an all-encompassing category, stretching across ocean tides and waves and reaching into the currents of inland rivers and straights.  It is separated from hydropower, which involves the construction of dams to create elevation differences in water levels that can be used to turn turbines. Still this promising source of renewable energy is populated mostly by small, private companies...

Tom Konrad CFA The first two months of 2016 have been chilly ones for the market, and for clean energy stocks.  In addition to the worries about the world economy and plunging oil prices which have been hitting stocks in general, the clean energy sector had to deal with the Supreme Court's stay on Obama's Clean Power Plan.  This effect was mitigated the following week by the lost of conservative Justice Scalia, but many states' subsequent delays of their compliance plans have put an additional chill on clean energy stocks, even ones which are unlikely to be affected....

In Missouri, Abengoa (ABGB) Bioenergy US Holding, LLC filed for Chapter 11 bankruptcy relief in the US Bankruptcy Court for the Eastern District of Missouri on behalf of itself and 5 of its US bioenergy subsidiaries. The companies involved in the filings include the US holding company; companies that own and operate four of Abengoa Bioenergy’s six US starch ethanol plants; as well as various support/service companies for Abengoa’s US bioenergy operations. This action follows the filing of two separate involuntary bankruptcy proceedings in Nebraska and Kansas earlier this month concerning the company’s starch ethanol facilities located in Ravenna and...

by Paula Mints Net metering and interconnection are rights afforded distributed generation (DG) residential and commercial solar system owners through the U.S. Energy Policy Act of 2005. The act required publically owned utilities to offer net metering and left the various policies up to the states to enact. In 2004, before that energy policy was enacted, 39 states had net metering and interconnection standards and policies. At the beginning of 2016, 43 U.S. states and three territories had net metering policies, and four states had policies similar to net metering that the Database of State Incentives for Renewables...

Doug Young Bottom line: Canadian Solar’s Recurrent Energy unit is likely to make its first public filing for a New York IPO in the next 2 weeks and should get a positive reception, while Jumei is likely to quietly de-list from the US in the next 3-4 months. One of the few Chinese IPOs likely to happen in New York this year is moving closer to the launch gate, with word of major new financing for the power plant-building unit of solar panel maker Canadian Solar (Nasdaq: CSIQ). But while that IPO for Recurrent Energy moves closer...