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Everyone knows the legend of Warren Buffett. EnergyTechStocks.com believes that 10 years from now, Josh Landess will be clean energy’s investing legend.
Landess co-manages an index, not a fund, a distinct advantage for investors in this age of Wall Street scandals. As co-manager of the Wilderhill New Energy Global Innovation Index (NEX), Landess probably is not only the most thorough source of information on clean energy stocks but also the most objective. That he almost never speaks with the media is another plus because it shows he isn’t inclined to tout a stock the way virtually every TV talking head routinely does.
Landess is as green as Al Gore. He scours the world for intriguing firms, keeping track of over 500 companies at any one time. The Wilderhill New Energy Global Innovation Index includes nearly 90 outfits traded on two dozen different stock exchanges. (Only Rafael Coven’s Cleantech Index comes close in scope and diversification.) Approximately a third of the components in Landess’s index are located in the Americas, with another third in Europe, the Middle and Africa, and the remainder in Asia and Oceania.
Make no mistake: accessing Landess’s brain will be no guarantee of investor success in clean energy, especially over the next couple years, when the global recession could be a nightmare for green project developers. Inevitably, however, a “carbon-constrained” world will arrive – the combined result of dwindling fossil fuel supplies and concern about both climate change and nations’ security. It will usher in unprecedented opportunity to make money, but it will take a guide like Landess to navigate clean energy’s numerous sub sectors.
A superficial examination indicates that energy efficiency and wind power are the sub sectors Landess is betting on most, with each accounting for slightly more than 25% of the index’s total holdings as of Dec. 29. But look deeper and you discover that Landess has actually tapped into all of the critical technology that will be needed to support the sort of green energy economy President-elect Barack Obama envisions for the world.
The index’s top two holdings as of Dec. 29 were American Superconductor Corp. (NASDAQ:AMSC) and SMA Solar Technology AG. Each supplies critical technology for connecting renewable power sources to the grid, with American focused on wind and SMA on solar. Given that the North American Electric Reliability Corp. (NERC) is on record that connecting wind and solar power will destabilize the existing grid, these two companies seemingly must succeed in order for the world’s massive investment in green power to pay off.
In third position was Rockwool International A/S, a Danish firm few American investors have probably heard of. Rockwool is a fascinating blend of high and low tech in the area where experts say the most energy can be saved at the least cost, namely: buildings. Rockwool both supplies thermal insulation material and sophisticated software for optimizing and minimizing a building’s total energy consumption.
Rockwool’s third position in Landess’s index serves as a bridge to the rest of his current top 10 holdings, which, with one exception, are all U.S. firms in the energy efficiency business. International Rectifier Corp. (NYSE:IRF) (4th place), Itron Inc. (NASDAQ:ITRI) (5th), Johnson Controls Inc. (NYSE:JCI) (8th) and Baldor Electric Co. (BEZ) (10th) all manufacture energy measuring devices (meters, power management software, and so on) that should hold up both during a recession (when saving money is paramount) and after, when protecting the environment by minimizing fossil fuel consumption should surge in public importance.
Meanwhile, EPISTAR Corp. of Taiwan and Cree Inc. (NASDAQ:CREE) of the U.S. are global leaders in the manufacture of light-emitting diode (LED) lighting, the next generation of super energy-efficient lighting. With several other LED manufacturers having been bought in recent months, these two would appear to be equally attractive for their potential to be acquired.
The other company in Landess’s current top 10, Britain’s Climate Exchange PLC (OTC:CXCHF), owns and operates emissions trading markets in Europe and the U.S. While it isn’t generally thought of as a technology provider, Climate Exchange may become as important for trading carbon dioxide emissions under Obama’s planned national “cap-and-trade” system as the New York Stock Exchange is for trading stocks.
Just outside Landess’s top 10 are several other key technology developers such as Power Integrations Inc. (NASDAQ:POWI), EnerNOC Inc. (NASDAQ:ENOC), Power-One Inc. (NASDAQ:PWER) and Echelon Corp. (NASDAQ:ELON).
If, as an investor, you share experts’ beliefs that energy, the world’s last analog industry, is about to go digital with new technology saving money, resources and the planet’s air quality, then you share EnergyTechStocks’s belief that Josh Landess will become known as clean energy’s investing legend.
Stock position: None.