Let’s get this out of the way, I am a green-loving, bleeding-heart environmentalist, but I am also a logical, data-oriented, high-efficiency manufacturing engineer. Yes, you can be both. I guess what I am saying is that I am all for green initiatives but not at the cost of being stupid.
That being said I want to lie out what I think is currently the best play in the green stock world or rather the ETF world: PBD.
PowerShares Global Clean Energy Portfolio (PBD) is made up of the best companies producing and utilizing clean technologies around the globe. This ETF when compared to the other ETF’s of it’s kind is supped up with the best green energy companies available, which not surprisingly are located outside of the US. Besides making you feel good about it containing a diversified group of clean companies, this is a good hedge against both surging oil and utilities prices, and since 70% of its holdings are based outside the US, this ETF is also a good hedge against the falling dollar.
The clean energy industry has seen some recent stock growth in the US from almost every manufacturer in the solar industry. FSLR, STP, SPWR, JASO, and more have all seen rapid growth as people trend towards more renewable energy sources. Alternatively, that is only one sector of green technologies, there are other great companies out there in hydro tech, geothermal energy, biomass, biofuels, rechargable batteries, wind energy, and more that will all start to experience a growth period. Expanding on that last technology, wind will have everybit as much market penitration as solar energy, as sunny areas of the world are not necessarily windy and vice versa. Currently the best wind power companies, other than GE*, are located outside of the US but are well represented in here (PBD). Wind power, not surprisingly, is catching on in windy states like California, Texas, and Iowa and are on the brink to really take off in Kansas and Minnesota. There is also some development in new production facilities of these foreign companies in the US, which is a sign for the expected orders to come.
Here is a sample article that I have been finding on such occurances.Let’s take a quick look at the top 10 stocks held in the ETF:
Weight
NameMore Information
3.41%
JA Solar Holdings Co. Ltd. (ADS)
China based Solar company recently rated as Buy by Piper Jaffrey and Zacks. Has long-term silicone supplier deal.
3.03%
Vestas Wind Systems A/SDenmark based, premier wind turbine manufacturer recently reporting 500% profit increase year ($68.9 mil) over year ($13.5 mil) and 18% increase in sales.
3.01%
First Solar Inc.US based solar company with Google like stock earnings due to its reliance on cadmium telluride instead of silicone for panels. Its most recent strategic move was to buy Turner Renewable Energy, a noted US based solar power installer. This allows for the company to sell whole packages to potential large-scale buyers.
2.71%
REpower Systems AGGerman based wind turbine manufacturer that currently holds 10% of the German marketplace. Building a promising 5 megawatts wind turbine, one of the largest in the world.
2.69%
Suntech Power Holdings Co. Ltd. (ADS)China based solar company that is extremely value conscious of their product. Has recently signed a long-term silicon contract with HOKU. This company is doing its best to keep prices down and deliver a high quality product (2nd most efficient PV panels).
2.66%
Acciona S.A.A Spanish mega company specializing in everything alternative including wind, solar, hydro, biomass, and more. Recently began building a new wind turbine plant in Iowa to better serve new US business.
2.65%
Yingli Green Energy Holding Co. Ltd. (ADS)China based solar manufacturer and installer. Another company capable of doing a complete solar install from production to installation. Has had a recent stock-funding event in order to raise $100 mil for further manufacturing and business initiatives.
2.58%
Gamesa Corporacion Tecnologica S.A.Spain based wind and solar producer and integrator that has seen a 52.5% 1-yr sales growth
2.45%
Nordex AGGerman based wind turbine manufacturer that has seen a net income increase of $5 bil to $18.5 bil year over year.
2.49%
Scottish & Southern Energy PLCUK based major utility provider doing its part in construction and utilization of wind farms and solar facilities. Encourages its users to build renewable energy sources into their homes and businesses
To me the trend is in its growing stages and it seems that all renewables are experiencing considerable growth. This stock is picking the best of the best around the world and should be seen as the safest bet to ride this wave. Low management fees of 0.75% of total ETF price (high for ETF’s but still low compared to mutual funds, trades in multiple markets too) helps as well.
Lastly, some friends of mine have noted that nuclear is a possible alternative as a major energy supplier in the US instead of coal, solar, wind, and the rest. I have only one rebuttal is that nuclear is being discussed and solar and wind power are being approved. I think we are truly at the tip of the green revolution and there is definitely money to be made. Just hope the US tax incentives don’t stop anytime soon.
* GE is a great company figuring out many different alternative technologies, but because their brand covers such a diversified group of products, it currently is not a great alternative energy play.
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