Alternative Energy Stocks

by Garvin Jabusch Jack Bogle is flat wrong. I mean, within his worldview and that of Modern Portfolio Theory, he’s right, but in the Anthropocene, he’s wrong. Bogle, founder and retired CEO of the Vanguard Group, is known for championing the superiority of low-fee index funds. His firm’s largest product, the $155 billion Vanguard 500 Index Fund is the perfect poster child for his philosophy. It closely tracks the S&P 500 Index of America’s largest companies, and it has a fee of only 0.06% inclusive. The S&P 500 has performed better than most actively managed portfolios over time, so...

by Debra Fiakas CFA Earlier this month Fuel Tech, Inc. (FTEK:  Nasdaq) announced the receipt of order for air pollution control systems totaling $2.0 million.  The customers are strung out across the U.S., Europe and China, but they all have dirty combustion systems and need to reduce toxic nitrogen oxide (NOx) and carbon dioxide (CO2) emissions or risk running afoul of government clean air standards.  These shipments are just the most recent in a string of orders Fuel Tech has won in recent months.  In late August 2015, the company received similar air pollution contracts from...

Jim Lane In Washington, the U.S. Environmental Protection Agency announced final volume requirements under the Renewable Fuel Standard program today for the years 2014, 2015 and 2016, and final volume requirements for biomass-based diesel for 2014 to 2017. This rule finalizes higher volumes of renewable fuel than the levels EPA proposed in June, boosting renewable production and providing support for robust, achievable growth of the biofuels industry. “The biofuel industry is an incredible American success story, and the RFS program has been an important driver of that successcutting carbon pollution, reducing our dependence on foreign oil, and sparking...

by Debra Fiakas CFA Appliance Recycling Centers of America (ARCI:  NYSE) is a typical small company, toiling away in seeming obscurity and struggling to get proper valuation of their success.  There is little glamour in old refrigerators and washing machines, but ARCA has figured out how to wring cash from recycling our household appliances.  In the last three fiscal years the company converted 1.6% of sales to operating cash flow. Unfortunately, things have turned a bit sour in the world of old Frigidaires and tired Maytags.  Last week ARCA reported financial results for the quarter ending September 2015.  The company suffered...

Jim Lane In New York, NASDAQ shares in Abengoa SA (ABGB) plunged 49% in Wednesday trading after the embattled renewable energy developer said it would seek bankruptcy protection as it seeks to reorganize nearly $9.4 billion in debt. The protective filing was announced after an expected infusion of nearly $300 million from Spanish steelmaker Gonvarri did not materialize. The company’s debt had been previously downgraded to a B3 rating by Moody’s, six rungs on the ladder beneath investment grade. Last week, Moody’s described the company’s cash reserves as “insufficient” and expressed that asset sales and a round of...

by Debra Fiakas CFA Based on Austria, Zumtobel Group (ZMTBF:  OTC or ZAG:  Vienna) is a supplier of modern lighting products using Light Emitting Diode (LED) technology.  Zumtobel sells its lights and components under three international brands Thorn, Tridonic and Zumtobel and two regional brands ACDC and Reiss.  Zumtobel has a long history in lighting with its foundation in the 1950s in Dr. Zumtobel’s Electrogerate und Kunstharzpresswerk.  The Thorn brand, which was acquired in 2000, dates back to the 1920s when founder Jules Thorn set up the Electric Lamp Service Company.  Zumtobel sells lights in over...

Bottom line: Major new financing for Recurrent Energy and Apple’s growing partnership with SunPower reflect technology advances that are making solar power plants increasingly competitive with traditional sources. Two solar power plant builders are in the headlines today, reflecting a shift that is seeing this new generation of companies take the spotlight from older solar panel makers that are desperately seeking new buyers for their products. The first headline has solar panel maker Canadian Solar (Nasdaq: CSIQ) announcing that its Recurrent Energy plant-building unit has secured financing for a major new US project, as Recurrent gets set for its...

by Debra Fiakas CFA Electric power companies need plenty of generating plants and distribution works to bring electricity to our doors.  Electric utilities are very good at generating electricity and managing relationships with the families and businesses that use the power, but building all that infrastructure  -  drawing up plans, hauling in materials and fastening girders  -  is not necessarily a power company’s strong suit.  Enter Quanta, Inc. (PWR:  NYSE) with a full menu of design, engineering and construction services for electricity generation and distribution infrastructure. Solving problems for electric utilities is good business for Quanta.  The...

Bottom line: Weak share reactions to upbeat news from Trina, ReneSola and Ming Yang reflect investor skepticism towards new energy stocks, as they face lingering issues of overcapacity and phasing out of government subsidies. A flurry of upbeat news is in the headlines today from 3 of China’s largest new energy equipment makers, led by a return to the profit column for solar panel maker ReneSola (NYSE: SOL) after a year in the red. At the same time, wind power equipment maker Ming Yang (NYSE: MY) also announced its latest quarterly results that were quite upbeat, and solar panel...

by Debra Fiakas CFA In the second week of November 2015, GAMESA Corporation (GTQ1: Berlin, GAM: Madrid, or GCTAF: OTC), Spain’s wind turbine manufacturer, reported double the net profit in the nine months ending September 2015, on revenue that was 30% higher than the same period last year.  During the period GAMESA has received orders from customers in twenty-five different countries for wind turbines with generating capacity of 2,841 megawatts.   Backlog at the end of September 2015 was 3,034 megawatts, representing a 43% increases over backlog a year ago.  At a time when some companies are struggling amidst...

Jim Lane As Dyadic cashes out of industrial biotech and retains a C1 license for pharma, DSM and Syngenta also announce a partnership. Companies are girding their loins for the long haul. The Digest takes a look, In Florida, DuPont (DD) Industrial Biosciences will acquire substantially all of the enzyme and technology assets Dyadic’s (DYAI) Industrial Technology business for $75 million, including Dyadic’s C1 platform, a technology for producing enzyme products used in a broad range of industries. DuPont has granted back to Dyadic co-exclusive rights to the C1 technology for use in human and animal pharmaceutical...

by Debra Fiakas CFA Last week Enviva Partners, LP (EVA:  NYSE) reported financial performance for its wood pellets business in its quarter ending September 2015.  Sales totaled a whopping $116.6 million, representing a 53% increase compared to $40.5 million in the same quarter last year.  The big jump in revenue resulted from higher volumes to larger customers.  Distributable cash flow totaled $12.6 million compared to $8.2 million in the year ago period.  Quarter performance made possible a declared cash distribution of $0.44 per common unit, which is 7% higher than the minimum quarterly distribution. At its...

by Debra Fiakas CFA Last week NextEra Energy Partners, LP (NEP:  NYSE) reported financial results for the third quarter ending September 2015.  The numbers were released in along with quarter results from its parent, Florida-based utility NextEra Energy, Inc. (NEE:  NYSE).  The partnership is the operating arm of clean energy projects originated by the NextEra parent.  The ‘yieldco’ as these operating entities have been kindly dubbed by shareholders, delivered $1.0 million in reported net income, but operating cash flow was a whopping $36 million in the quarter. The consensus estimate had been for $0.24 in earnings per...

by Paula Mints SunEdison (SUNE) has been in the news of late and with a confusing acquisition strategy, interesting financial decisions, layoffs and high debt it is beginning to look a lot like MEMC.  This is really a tale of two companies – one a raw material manufacturer and pioneer in silicon wafer technology founded decades ago, the other a pioneering developer in the commercial PV space, and how in becoming one, the combined company took on the personality of the raw material company. In the past MEMC engaged in an aggressive acquisition strategy...

Doug Young Bottom line: New York IPO plans by a Canadian Solar unit and Solar Power Inc could auger a new wave of similar listings by Chinese new energy power plant builders, offering investors a higher growth alternative to traditional utilities. Just a day after solar panel maker Canadian Solar (Nasdaq: CSIQ) announced it has spun off its fast-growing solar power plant-building unit for a US listing, another China-based peer is discussing plans for a similar IPO. This time a company called Solar Power Inc is the one disclosing plans for a New York listing to raise...

Jennifer Delony Reno, Nev.-based Ormat Technologies (ORA) is seeking mergers and acquisitions that will help the company enhance its geothermal projects with energy storage technologies, Ormat CEO Isaac Angel said on Nov. 4. “On the storage solutions side, we are progressing well,” Angle said during a 3Q15 earnings webcast. “I’m very optimistic that we will be able to add a lot of MW … and profitability to our existing power plants.” Angle said that he also is optimistic that the company will secure a deal soon that will initiate Ormat’s energy storage strategy. “We’re almost there,” he said....