Our Energy Future … Off the Grid?
Stock Market Analysis Video
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Next Week’s Economic Reports to Trigger New Profit Run
We’re only a couple of months into the new year, and I’m seeing more momentum in the marketplace than I’ve seen in the past six months. If our optimum technical momentum indicators are on target again, as they were throughout 2010, this is going to be THE WEEK to trade this market. Full details online now.
Last week, I wrote about a very old stock ticker that caught my eye when I saw it on Antiques Roadshow. It was vetted by their appraisers and said to be worth from $8,000-$10,000, so you can imagine my surprise when I received an email on Monday from someone with a very convincing argument that the ticker is in fact a fake!
Rusty, a man who runs a website about stock tickers, emailed to say he was pleased to see a stock ticker getting some coverage, but dismayed to see that it was a fake. He sent me a link to a page he created debunking the Antiques Roadshow assessment and I invite you to check it out.
I certainly learned a lot about antique stock tickers and I think you will too!
When I wrote about e-readers last week, I mentioned how much I love to read. And just this week I finished a book about living off the grid. I’m not planning to abandon my city-supplied electricity, sewer services or water any time soon, but I wanted to learn more about this counter-culture, especially as oil prices rise daily.
The author of the book, Off the Grid, Nick Rosen, was clearly in favor of off the grid lifestyles and in fact was conducting a search across the U.S. for the perfect off the grid location while writing the book. So I took everything he said with a grain of salt, but still enjoyed his stories of meeting people living with no gridded electrical, sewer or water hook-ups. Some were marijuana growers in California, others were deeply religious families in the South and still others were environmentally minded individuals who wanted to reduce their impact on the earth.
It’s this group that really got me thinking. Throughout the book, Rosen makes many references to the various technologies many of these off the grid dwellers employ so they can still run appliances as well as have access to water and sewer services. Some things many people are familiar with, like wells for water and septic tanks for sewage. I grew up in a house with both because we lived in a rural area, but we were connected to the grid for electricity. Other options are still considered more fringe, like solar panels, windmills, fuel cells and more.
We’ve written about some of these technologies before (First Solar was a huge winner for Cabot in 2007) and even have an entire newsletters dedicated to Green technology (Cabot Green Investor), so I decided to see what stocks we’ve recently featured in the Cabot newsletters that may be part of our energy future—off the grid or not.
This may seem extreme to you, but if you believe in peak oil (the theory that we’ve passed the point of maximum global petroleum extraction, and that getting oil will be increasingly expensive from here) or even just watch the news to see how unrest in the Middle East has caused oil and gas prices to skyrocket, you know that we’re going to need alternatives to fossil fuels to power our future. So today I’m going to discuss two solar stocks that have very bright futures.
One stock in this area that caught my eye is Amtech Solutions (ASYS). Cabot Green Investor Editor Brendan Coffey recommended it in September, writing this:
“Amtech Systems is the market-share leader in a niche in the solar cell production stage of solar panels. Specifically, it makes the equipment necessary for cell diffusion, the process by which phosphorous oxychloride is diffused onto wafers. The phosphorous oxychloride is used to alter the chemical properties of the wafer to allow the solar conversion mechanism to be laid on top. The company also competes in the next two steps of the cell process, etching, which removes undiffused material, and adding an antireflective layer to the wafer through a plasma-enhanced chemical vapor deposition process (PECVD for short). …
“While Amtech makes its products in Europe (and some in the U.S.), the company sells the vast majority of its products to Asian customers, with roughly 85% going to what would be considered top-tier solar makers. That’s important because some analysts project the leading solar panel makers will continue to grab market share from smaller players as margins and pricing pressures from end-users increase. In the most recent quarter, Asia Pacific accounted for 92% of revenues, the U.S. 6% and Europe the rest. For the last full year, Asia was two-thirds of sales, North America 19% and Europe 14%.”
(Note that ASYS was sold from the Cabot Green Investor portfolio in late February for a 46% gain to preserve profits after a secondary share offering. But Brendan noted in his sell bulletin that he thought the stock still had great long-term prospects, especially with oil prices rising.)
Another stock that caught my attention is LDK Solar (LDK), recommended by Paul Goodwin, editor of Cabot China & Emerging Markets Report, in January:
“LDK Solar got its start in 2005 and came public during the glory days of 2007—the stock nearly tripled from its IPO in June to its top that fall. The company’s claim to fame was its polysilicon and ingots, two of the base supplies needed to make most solar cells and modules. Of course, when the bust occurred, it hurt everyone, LDK included; the firm lost a whopping $2 per share in 2009 as pricing declined and demand dried up.
“But LDK didn’t just circle the drain while the industry was having rough times. Instead, it planned for the future, positioning itself as a low-cost provider in the industry, and as a complete, vertically integrated firm (giving it more control over those costs). Today LDK produces its own silicon, ingots, wafers (it’s the world’s largest wafer company), cells and modules. It’s a one-stop shop! …
“Already the world’s largest wafer producer, LDK recently reached 3 GW of annual production capacity, and is set to hike that to 3.6 GW by year-end. For polysilicon, capacity is leaping from 6,000 metric tons in the first half of last year to about 15,000 today to 18,000 by year-end. And for solar modules, it’s looking to boost capacity to 2,500 megawatts (MW), up from 760 MW at the end of the third quarter! …
“The company is now on record expecting a whopping $3.6 billion in revenue in 2011 (up from $2.4 billion in 2010), as well as meaningfully bumping up all of its key metrics, from silicon sales to cell production to gross margin. Official analyst estimates call for about $2 in earnings next year, but that looks to be very, very low (assuming management’s forecasts prove correct).
“Put it all together, and you have a burgeoning low-cost, vertically integrated leader in the solar sector with a global, top-notch client base. Throw in the fact that investor perception of the solar sector might finally be ready to tick higher, and you have the ingredients for a winner.”
Solar stocks have had a tough time in recent years and with the recent threat of declining subsidies in Italy, the industry could struggle some more. But at least one research firm believes worldwide demand for solar products will grow from about 13.1 gigawatts (GW) in 2010 to 37.1 GW in 2014. Clearly, this is still a growth industry.
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Has the Bull Market Finally Had It?
The shocking answer could make you 50% richer or 50% poorer, depending on what you do now! Make no mistake about it—the bull market is entering a dangerous new phase. One that will soon affect all the stocks you own.
The next market move we see headed our way in the next 30 days could be the biggest shocker of 2011. My free report reveals what you must do now to protect yourself and profit. Get it now!
In this week’s Stock Market Analysis Video, Cabot China & Emerging Markets Report Editor Paul Goodwin says it's still a bull market. It looked like it might not be anymore, as the Dow Industrials fell big on Monday and Tuesday, but then they found support and received a nice bump on Thursday. Investors are nervous, as the market's uptrend is now about six months old and many are forecasting a correction. Stocks discussed are Brush Engineered Materials (BW), Global Defense Tech (GTEC), Brigham Exploration (BEXP) and China New Borum (BORN). Click to watch the video!
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In case you didn't get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, there are links below to each issue.
Cabot Wealth Advisory 2/28/11 – How to Use Options to Synthetically Trade a Stock
On Monday, Rick Pendergraft discussed how you can use options as investment vehicles rather than trading vehicles. He discussed using LEAPS, Long-term Equity AnticiPation Securities, which are options that expire in a year or more. He then described an example of how to use this strategy.
Cabot Wealth Advisory 3/1/11 – Profiting from Global Progress
On Tuesday, Chloe Lutts discussed the recent revolutions in the Middle East and how democracy’s progress over time has been much like the stock market’s—though halting at times, it is always upward over the long-term. Chloe also recommended a stock benefiting from the communications revolution. Featured stock: American Tower Corp. (AMT).
Cabot Wealth Advisory 3/3/11 – Plan Your Trade, Trade Your Plan
On Thursday, Mike Cintolo discussed the importance of having a trading plan before the market goes south to prevent panic and hasty decisions. Mike also talked about “late-stage” stocks and recommended a company with a boring business, but exciting potential. Featured stock: Manitowoc (MTW).
Until next time,
Editor of Cabot Wealth Advisory
P.S. As mentioned above, Brendan Coffey is the editor of Cabot Green Investor, which ended 2010 with a 24% return, easily trumping its benchmark, the WilderHill Clean Energy Index, which fell 7%! And that’s merely the beginning. The high-potential socks Brendan recommends have even further to go in the weeks, months and years ahead. Don’t miss another recommendation. Get started today!