Stocks to Benefit from a 'New Energy Economy'

Is there anyone who doesn’t think that with Barack Obama in the White House, clean and green won’t be hot in 2009, no matter what the state of the economy? Here are 10 publicly-traded companies that we think investors should look at carefully before the calendar turns and the new U.S. President details his plans for a green, efficient “new energy economy":

#10 centrotherm photovoltaics ag [FRA:CTN]: Shares of solar energy firms have been hammered, including for this German solar equipment manufacturer. But countries including the U.S. continue to pursue aggressive renewable energy standards despite the recession, and experts say solar power should be cost competitive with conventional electricity within two to four years. Thus centrotherm’s strategy “to establish ourselves globally as a provider of production plants for solar silicon and turnkey production lines for the manufacturing of solar cells and thin-film modules” appears to have a lot of potential. It doesn’t hurt that, in these trying economic times, centrotherm can pitch would-be customers that its equipment can cut their costs.

More immediately, the company, whose shares trade in Frankfurt, reported that its net income tripled in the first nine months of 2008. In a November 12 press release, the company forecast a strong fourth quarter and indicated that it expects to keep growing despite the global financial crisis.

#9 New Flyer Industries Inc. (NFYIF.PK): A favorite of Tom Konrad at AltEnergyStocks.com, this Canadian company is the self-described leading manufacturer of heavy-duty transit buses in the U.S. and Canada, as well as a leading provider of aftermarket services.

Thanks to the push for greater energy efficiency in transportation, New Flyer, whose shares trade on the Toronto exchange, looks positioned to keep reporting strong growth. Among other recent developments, the company just delivered the first 22 of 150 new plug-in hybrid transit buses to the Chicago Transit Authority.

The company most recently reported third-quarter earnings and revenue roughly the same as the year-ago period. It said its order backlog is up 20% compared with December 30, 2007, and that it continues to experience near double-digit growth in aftermarket services.

While municipalities will be hard up for cash in 2009, as Konrad recently noted, Obama’s fiscal stimulus should contain significant money for green, energy-efficiency related jobs. While new orders have slowed some, New Flyer’s order backlog is still at record levels.

#8 Waterfurnace Renewable Energy Inc. (WFIFF.PK): This Indiana-based company makes and installs residential geothermal heat pumps. While its shares have fallen with the market, percentage-wise they have held up much better than many other clean, efficient energy providers, no doubt thanks to sales and earnings that keep rising in the teeth of, first, the housing crisis, and now, the deep overall recession.

Waterfurnace, whose product taps the earth’s constant 55 degree temperature to heat and cool a house or other building by heating and cooling water depending on the season, most recently reported a 56% increase in third quarter net income over the year-earlier period on a 41% increase in sales. The company said it continues to benefit from consumers’ penchant for wanting to save money and go green at the same time.

The company likely should continue benefiting in 2009, given that the recent Wall Street bailout bill passed by the US Congress provides significant tax credits for both homeowners and businesses that install geothermal heat pumps.

#7 Ormat Technologies Inc. (ORA): Like Waterfurnace, Ormat’s shares haven’t suffered nearly as much as many other cleantech firms. The company’s geothermal power business should do well as the new Obama administration searches for sources of electricity that don’t cause pollution and won’t further destabilize the U.S. power grid. Geothermal is the only such source at the present time. (Solar and wind are “intermittent” power sources that are capable of impairing grid stability. Nuclear, while non-polluting, will take 10 years or longer to increase as percentage of total U.S. power generation.)

Ormat is the global leader in geothermal technology, considered by many experts to be a vast untapped power source that is about to revolutionize power generation. The company already operates a number of geothermal power plants in countries around the world, and can be expected to benefit from Washington opening up a vast amount of federal acreage to geothermal mining.

The company most recently reported third quarter net about the same as a year ago, beating analysts’ forecasts, on a 26% or so increase in revenue. The company also recently bolstered its credit lines and thus should be able to continue exploiting the new global push for clean power.

Shares of Nevada-based Ormat trade on the New York Stock Exchange. The company is a unit of Ormat Industries, whose shares trade on the Tel Aviv exchange.

#6 Energy Recovery Inc. (ERII): ERII is a small California-based company traded on NASDAQ whose technology makes it possible to desalinate water at less expense through greater energy efficiency.

The noted green investment brokerage Ardour Capital just recommended that investors “accumulate” Energy Recovery shares on its belief that Energy Recovery’s technology could make it a dominant player in the growing water desalination industry.

The company itself just announced a large contract for its reverse osmosis desalination equipment for a huge project along the north coast of Algeria, just one of many countries facing critical freshwater shortfalls that play to the company’s strength. Energy Recovery also recently landed a large contract in Spain, leading the company to declare itself “the preferred supplier” of energy-efficient desalination equipment in the Mediterranean basin.

#5 AMEC Plc [LON:AMEC]: Traded in London, AMEC is a British engineering and project management company that probably isn’t on most investors’ radar screens. But don’t be surprised if it has a breakout year in 2009 as the new Obama administration puts the screws to coal.

Earlier this month, Southern Co., (SO), probably the best operated U.S. electric utility, contracted with AMEC to install enhanced emissions-control equipment at a plant in Alabama. It was AMEC’s second major award for pollution-control upgrades in the U.S. in recent months.

AMEC also recently formed an alliance with the world’s leading oilfield services concern, Schlumberger (SLB), the stated purpose being to “add every component of what it takes to put a discovery into production.” And it recently signed cooperation agreements with South Korean utilities that will expand its business in that Asian country.

The company said last month it is confident that its 2008 EBITA will be in excess of 6.5%, with improvement expected in the next two years.

#4 Japan Steel Works (JPSWF.PK): Japan Steel Works' stock is traded on the Tokyo exchange and it is in the unique position of being by far the world’s leading manufacturer of such key components of nuclear power plants as reactor pressure vessels and steam generators.

The company’s order book keeps growing as new orders come in for new plants in China, the U.S. and Europe from such leading contractors as GE (GE), Hitachi (HIT) and Areva (ARVCF.PK). With the world possibly just at the beginning of a nuclear revival, Japan Steel Works appears to be very well positioned to take advantage, the company having just started a three-year-long program to triple its manufacturing capacity. The company also has solid prospects for heavy manufacturing for the chemicals, and iron and steel industries.

Hitachi, Areva and Mitsubishi Heavy Industries (MHVYF.PK) each reportedly has small equity stakes in Japan Steel Works, which they acquired to insure that they are able to get the parts they need.

#3 Fluor Corp. (FLR): FLR, whose stock trades on the Big Board, is likely to see a surge of investor interest the moment the Obama administration details its ambitious infrastructure revitalization program and it becomes crystal clear that Fluor stands to make a bundle from every aspect of that program.

Led by Fluor, a handful of giant engineering firms will need to be everywhere at once, building new power plants and lines as they rebuild roads and bridges. While we’ve identified Fluor as the company to watch in this area, investors should also pay attention to Chicago Bridge & Iron (CBI), Foster Wheeler (FWLT), Halliburton (HAL), Jacobs Engineering (JEC) and McDermott (MDR).

Indeed, the whole group should experience a sharp rise in stock prices as Obama announces plans to spend hundreds of billions to revitalize and, in the case of power grids, reinvent the nation’s critical infrastructure.

#2 Itron Inc. (ITRI): ITRI is the NASDAQ-traded “smart” meter manufacturer whose sales would appear likely to grow strongly as the Obama administration seeks to develop a “smart” electrical power grid that will maximize energy efficiency, thereby reducing the need to build more fossil-fuel power plants to meet America’s steadily-growing power demand.

Itron’s stock has been moving higher recently as the company gets increasingly recognized for its water-saving meters as well. When you consider that the best way to save energy is by saving hot water, Itron would seem to have a doubly-attractive business model going forward under the Obama administration.

Don’t be surprised if the stock surges some time in January, for President-elect Obama has hinted at making energy-saving home retrofits one of his first energy and environmental objectives, which could put Itron’s meters in high demand.

#1 IBM (IBM): IBM, the giant software and technology developer traded on the Big Board, may turn out to be the biggest beneficiary of the Obama administration’s dual goals of reducing energy consumption and capping carbon dioxide emissions, two multi-billion markets in the making.

IBM is going to be both “Mr. Inside” and “Mr. Outside.” It will be providing software and consulting services for many major corporations as they gear up to control their CO2 output under new government mandates. It will also be providing the system-wide software for smartening the power grid, making it more efficient so that people save money and the nation cuts its CO2 emissions.

At first it may appear to investors that, because IBM is so big, its burgeoning smart energy software and consulting services won’t have much of an impact on its bottom line. But it should soon become apparent that such services may become the largest single contributor to IBM’s revenue and net income within the next three to five years.

Disclosure: no positions

Comments

[Altiminister:]

YOU OMITTED A SMALL CAP, "ALTAIRNANO"--(ALTI). THEY HAVE DEVELOPED AND TESTED A LI-ION TITANATE NANO
TECH. BATTERY THAT WILL POWER A SUV SIZE VEHICLE FOR APPROX. 140 MILES ON A 10 MIN. CHARGE. THEY HAVE PUT TOGETHER AND SUCCESSFULLY TESTED LARGE MODULES OF THESE BATTERIES FOR USE IN GRID MGT., WIND AND SOLAR FARMS. THEY ARE BEING TESTED NOW FOR BUSES.

2008 Dec 23 08:21 AM

[User 324688:]

I have serious doubts about how hot green tech will be because of Obama. He's a typical politician who conveniently swaps his gas hog Chrysler 300 for a Prius just to look green to the voting public. Let's just say I'll believe it when I see it.

2008 Dec 23 08:57 AM

[ArtfulDodger:]

What if Obama pulls a bait and switch, as Clinton did in 1992? Clinton was big on rebuilding the infrastructure and used that as part of the reason for his huge tax increase, but never put a penny toward it.

If that happens with Obama (and it's surely possible), how fast will investors dump these stocks?

2008 Dec 23 08:58 AM

[Chris B:]

LSB industries might be a better pick than waterfurnace because it is more diversified and larger than its pink sheets competitor. It has also been taking advantage of the credit crunch, using its healthy earnings and cash position to buy up its own convertable debt at a 40% discount. A few tax incentives or a drive to use their products on federal buildings could be a big boost.

"Nuclear, while non-polluting..."

Nuclear energy produces tons of radioactive waste that will be deadly for thousands of years, which I would certainly call pollution. A case could be made that this waste is easier to recover and store than the mercury and arsenic blowing out the smokestacks of coal-fired plants, but the additional downside of a statistically probable Chernobyl-scale accident or terrorist attack every couple decades more than makes up for that benefit. The off-balance-sheet taxpayer dollars required to protect nuke facilities, regulate their safety, and store their waste for thousands of years makes nuclear energy unaffordable.

Geothermal electricity generation by companies like Ormat, Western Geotherm, or Razer is the only "non-polluting," non-intermittent baseload option besides, arguably, hydroelectric.

2008 Dec 23 11:20 AM

[Erich J Knight:]

I thought these updates and endorsements may interest you,

Sen. Ken Salazar (NOW Secretary of Interior!!) has done the most to nurse this biofuels system in his Biochar provisions in the 07 & 08 farm bill,
www.biochar-internatio...

Below are my current news & Links to major developments;

At USDA Dr.Jeffrey Novak is coordinating Biochar research.
I've had productive contacts with Douglas Lawrence, director NSCS & Farm bill coordinator, and through him, David Douds with ARS for MYC & VAM Fungi research, and Chris Nichols ARS glomalin research.

My other most successful efforts to date are continuing briefings to Michael Pollan (Food Column NYTs & author) over the last year.
In a recent National Public Radio interview, Michael Pollan talks about how he was approached by a Democratic party staffer about his New York Times article, The "Farmer & Chief" article is an open letter to the next president concerning U.S. agriculture/energy policy. The staffer wanted Pollan to summarize the article into a page or two to get it into the hands of Barack Obama. Pollan declined, saying that if he could have said everything that needed to be said in two pages, he wouldn't have written 8000 words.
Michael Pollan is well briefed and excited about Biochar technology, but did not include it in his "Farmer & Chief" article to President Obama, (Which he did read & cited in a speech) but I'm sure Biochar will be his 8001th word to him.


Changing World Technologies

Ultimately we must leave the combustion age behind. Charcoal to the soil is a bridging first step as other energy conversion technologies bloom from Nano and bio research . Thankfully we can do Terra Preta (TP) soil with off the shelf technology now.

Oil companies must come to see the overwhelming value of their fossil carbon as the best feedstock for the manufacture ( via carbon nanotubes, fullerines, DNA programed nano self assembly, etc.) of virtually all things in the near future.

This convergences of different technologies will end the Combustion age.

TP starts as a soil nano technology with increased CEC, than a micro technology with our wee- beasties / fungus, and macro with bugs and worms.

Biochar, the modern version of an ancient Amazonian agricultural practice called Terra Preta (black earth), is gaining widespread credibility as a way to address world hunger, climate change, rural poverty, deforestation, and energy shortages… SIMULTANEOUSLY!

Modern Pyrolysis of biomass is a process for Carbon Negative Bio fuels, massive Carbon sequestration,10X Lower Methane & N2O soil emissions, and 3X Fertility Too.
Every 1 ton of Biomass yields 1/3 ton Charcoal for soil Sequestration, Bio-Gas & Bio-oil fuels, so is a totally virtuous, carbon negative energy cycle.

Charles Mann ("1491") in the Sept. National Geographic has a wonderful soils article which places Terra Preta / Biochar soils center stage.

Please put this (soil) bug in your colleague's ears. These issues need to gain traction among all the various disciplines who have an iron in this fire.

The NGM cover reads "WHERE FOOD BEGINS"
ngm.nationalgeographic...


It's what Mann hasn't covered that I thought should interest you and Sen. Salazar;

NASA's Dr. James Hansen Global warming solutions paper and letter to the G-8 conference, placing Biochar / Land management the central technology for carbon negative energy systems.
arxiv.org/ftp/arxiv/pa...

The many new university programs & field studies, in temperate soils; Cornell, ISU, U of H, U of GA, Virginia Tech, JMU, New Zealand, Germany and Australia.

Biochar data base;
terrapreta.bioenergyli...

Glomalin's role in soil tilth, fertility & basis for the soil food web in Terra Preta soils.

POZNAN, Poland, December 10, 2008 - The International Biochar Initiative (IBI) announces that the United Nations Convention to Combat Desertification (UNCCD) has submitted a proposal to include biochar as a mitigation and adaptation technology to be considered in the post-2012-Copenhagen agenda of the UN Framework Convention on Climate Change (UNFCCC). A copy of the proposal is posted on the IBI website at
The International Biochar Initiative (IBI).


Given the current "Crisis" atmosphere concerning energy, soil sustainability, food vs. Biofuels, and Climate Change what other subject addresses them all?

This is a Nano technology for the soil that represents the most comprehensive, low cost, and productive approach to long term stewardship and sustainability.

Carbon to the Soil, the only ubiquitous and economic place to put it.

If pre-Colombian Kayopo Indians could produce these soils up to 6 feet deep over 15% of the Amazon basin using "Slash & CHAR" verses "Slash & Burn", it seems that our energy and agricultural industries could also product them at scale.

Harnessing the work of this vast number of microbes and fungi changes the whole equation of energy return over energy input (EROEI) for food and Bio fuels. I see this as the only sustainable agricultural strategy if we no longer have cheap fossil fuels for fertilizer.

We need this super community of wee-beasties to work in concert with us by populating them into their proper Soil horizon Carbon Condos.

Company News & EU Certification

Below is an important hurtle that 3R AGROCARBON has overcome in certification in the EU. Given that their standards are set much higher than even organic certification in the US, this work should smooth any bureaucratic hurtles we may face.

EU Permit Authority - 4 years tests
Subject: Fwd: [biochar] Re: GOOD NEWS: EU Permit Authority - 4 years tests successfully completed


Doses: 400 kg / ha – 1000 kg / ha at different horticultural cultivars

Plant height Increase 141 % versus control
Picking yield Increase 630 % versus control
Picking fruit Increase 650 % versus control
Total yield Increase 202 % versus control
Total piece of fruit Increase 171 % versus control
Fruit weight Increase 118 % versus control

There is list of the additional beneficial effects of the 3R FORMULATED BIOCHAREU DOSSIER for permit administration and summary of the results from 4 different Authorities who executed different test programme is under construction
I suggest these independent and accredited EU relevant Authority permit field tests results will support the further development of the biochar application systems on international level, and providing case evidence, that properly made and formulated (plant and/or animal biomass based) biochars can meet the modern environmental - agricultural - human health inspection standards and norm, while supporting the knowledge based economical development.

We work further on to expand not only in the EU but in the USA as well. My Cincinnati large scale carbonization project is progressing, hopefully the first industrial scale 3R clean coal - carbon plant will be ready in 2009.

Sincerely yours: Edward Someus (environmental engineer)
HOMEPAGE 3R AGROCARBON: www.3ragrocarbon.com

www.terrenum.net
EMAIL 1: [e-mail]
EMAIL 2: [e-mail]...


Also: Here is the only stock play in this sector;

October 28, 2008

U.S. Department of Agriculture to Evaluate CQuest™ Biochar

Non-Funded Cooperative Agreement Signed

The objective of the biochar research is to quantify the effects of amending soils with CQuest™ Biochar on crop productivity, soil quality, carbon sequestration and water quality. Field trials will involve incorporation of biochar in replicated field plots and on-farm strip trials with monitoring of crop yields, soil quality, water quality, emissions of greenhouse gasses, and soil carbon sequestration. Laboratory studies will involve amending soils with biochar and quantifying changes in soil quality and microbial activity during incubations.

Biochar will be shipped from Dynamotive's West Lorne facility to Agricultural Research Service (ARS) locations in Iowa, South Carolina, Idaho, Washington, and other ARS locations. Initial results are expected during the 2009 growing season.

www.dynamotive.com/en/...

2008 Dec 23 11:52 AM

[Donald Johnson:]

McDermott's symbol is MDR.

2008 Dec 27 05:16 PM

[Ken Smith:]

What does anyone think about the 2009 prospects for utility stocks where the company makes investments in renewable energy facility development - not just promises of major wind farms that wont be finished for 10 years, but utilities that actively invest cash/equity (or leverage debt) for the construction of utility-scale renewable energy generating facilities that can come online within the next 24-36 months?

2008 Dec 28 12:24 PM

[kertch:]

Geothermal may well be an option but it is by no means "cheap and affordable". Drilling wells that are deep enough to heat water sufficiently for economic energy extraction is prohibitivly expensive in the 98% of the country that does not sit over an active geological region. Most of these spots are in California, Alaska, and Hawaii. A few are in other western states, and there are none east of the rockies.

2008 Dec 30 06:32 PM