The big win and the big loss...

Well just a couple of weeks ago I recommended Rockwell Automation (around $54 per share at the time) and it has subsequently tanked to a level today of $43. That sucks and I was wrong, Rockwell (ROK) committed a bad no-no and dropped 2008 expected earnings. Well it's really not a no-no as much as seeing the truth hurts. That was a mistake and I will strive not to do so again.

Herman Miller (MLHR) however has just reported profits up roughly $.71 a share for its 4Q and seen a big boost in a day of bad losses (+ ~$1.50 per share). Since mid-April it is now up nearly $3 a share. That makes me happy, I am curious as far as what to do with this stock. Their furniture is for rich people and big business so they could be insulated from the market some, but I just don't see how they will keep growing in profits in this environment. I may get out and take profits.

Baldor (BEZ) is still one of my favorite companies, they simply make stuff that is needed no matter what the market is doing. It was a classic Buffett style stock, essentially undervalued, and can make a profit in a variety of climates. Today however it has fallen significantly (roughly $3 a share) and I don't know why. No real news out there other than its peers not doing so well (see ROK). However since I recommended it on 4/29 @ $32.40 (I bought it for $27.50 a week prior) it has jumped up $3.50 a share ($6.50 a share yesterday). Honestly it has been flying and needed a pull back. I still think it is a good stock, and will continue to do well and it may be a good time to pick it up at the recent pull back, although I will wait it out for a while.

Otherwise, the market looks bad right now. Unless I find another Baldor like company I am sticking to purchasing my three ETFs (PBD, PXE, PWV) on their low days. Someone please tell me what to do with FTO. (Nevermind sold off FTO 6/27)

Righting the ship...

I was waiting to say anything it until I was at least 3% into the black on my Roth IRA, but I am now officially Back in Black (by 5%)! I have had trouble the last six months finding a profitable portfolio and wanted to readjust into some safe value minded stocks and ETF's that should be good for the long run.

Key sales: STP, PBD, PNCL, Polaris Global Value Fund

• STP and the entire solar market started to fall after a big markup; I wanted to keep this for the long term but selling at this time still allowed for me to collect some profits. I still think Suntech is the Toyota of the solar market and along with Sunpower are the best of breed if you are looking to find a long term solar investment.
• PBD fell based on that same big solar put back. I got out at $27.45 a share, but later I got back in $25.62 a share (now at $29.70 a share). I know that this ETF is getting lumped in with the other solar stocks in investors minds, but as I have stated before in my first evaluation of this ETF, it is the best of all available alternative energy technologies in the world not just the US. The best technologies being windmills. This is great long term ETF that is in my opinion the best and safest alternative energy play.
• PNCL may be a good play some time, even right now, but I am out. It is a suggestion out of a magazine that I thought, "Hey, this makes sense" and bought shares without my usual research. Pinnacle is basically a small airline partnered with Northwest Airlines and others to take care of some of the lesser puddle jumping locations in the states. It made sense until one day I remembered this is one of the industries that tied to gasoline charges and then they made a purchase of another small airline that, low and behold, has a lot of unforeseen debt. Bad call by me.
• The Polaris Global Value Fund is a formerly well liked, low expense mutual fund that typically invests in global value rated small cap businesses. Historically small cap value businesses don't do well in rough economies and then takes off when the economy turns back into a bull market. Well I bought this fund in a bull market and then it has slowly been leaking profits ever sense. I may purchase this again, but my money is currently better stored in PWV.

Key purchases: BEZ, PXE, PWV, PBD

• BEZ was written up in this post a few weeks back and has already helped my portfolio greatly. I still like this company in this economy and for the longterm for the same Buffet'esce reasons as I have listed before and feel that is still in a "buy" stage. Wait for another couple of pull back days; it has been on a tear again. I would buy anything below the $34 range.
• PXE is a stock that I have owned for over a year now and I decided to add more. It is the Powershares Dynamic Energy Exploration & Production Portfolio and it makes a whole lot of sense to just keep adding more and more of this ETF. I am a firm believer in alternative energy and fuels, but currently gas is what makes the world go round. Spend some time in checking this ETF's top five stocks and you will see several of the price explosion stocks over the past year. This ETF is going to continue to keep growing for at least the next three years, so at almost any price it will continue to gain value. I am going to keep purchasing it on bad days for some time.
• PWV is Powershares Dynamic Large Cap Value Portfolio and Lipper just loves it. It has a five star rating over the past three year in four categories and a four star rating for the expense category. It is built up of value minded large cap companies, so it should be tough enough to weather and grow in this economy. Oh, and it has been cheap recently, shares a fairly good dividend at 2.44%, and in a growing economy should take off. If it follows its past three years of data it will beat the S&P's growth by 5% to 10%. It is safer than a mutual fund and has a much better potential upside. I am buying as long as it is below $21 a share.
• PBD for the same reasons listed above.

We will see: MLHR, FTO

• MLHR is a great stock, has a bunch of cash on hand, caters to upscale customers, P/E of 10, 1.5% yield, and is consistently showing increasing profits in quarterly reports. Herman Miller furniture is high quality and a good product, but everyone seems to be staying away from it. I have amassed a lot of this stock as I think it is still a great company in bad times. It is one Kramer or SmartMoney recommendation away from taking off I think, but for now I am holding my breath.
• FTO is another great stock that I don't understand. It's stock performance is closely tie to the overall refinery market, but Frontier keeps recording record profit, P/E of 6.5, lots of cash on hand, and well seems cheap. I may buy a little bit more because I think this is ready to explode soon.

What I do well at in my opinion is doing research and finding value minded stocks and ETF's and my current Roth portfolio reflects this. I suck at selling at times when my stocks are still profitable. I need to start adhering by some rules of when to get out, but need some ideas. When I figure out my plan, I will share it some more here, but I tell you what it feels great to be back in black, especially in this economy.

Last thought: Buy PXE on off days. Oil is king for some time.

The best bet on the green movement: PBD ($30-$32 per share)

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
Name
More 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/S
Denmark 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 AG
German 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 AG
German 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 PLC
UK 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.