Megatrend Companies Summary

by: Bryan Gomez

Here is a summary of the megatrend companies that I think will be a good list to focus on for those who are using swing trading strategies. I just provided a small description of the company and you can click on the company's ticker to access some important financials relevant to the company.

1. Stop-gap to alternative energy. There is no doubt that the future of energy is clean but for the meantime, the transition to clean goes through these companies.
a) demand response and energy demand management - energy not used is energy not produced is carbon not emitted

  • ENOC - Develops and implements demand response and energy management for electric power grid operators and utilities. Basically optimizes the balance of electricity supply and demand making the electric grid more efficient in delivering electricity where it is most needed.
  • COMV - Provides peak and base load capacity management solutions at the utilities and residential level. Basically similar to ENOC.
  • ITRI - Provides electronic meters to energy, water, heat, gas, and electricity markets. Also provides software service that provides data management of electronic meter data.

b) carbon capture and storage - captures CO2 from fossil fuel power plants or other CO2 emitting sources and then contains it and buries it underground

  • SSL - Mainly an oil and gas refining company, is currently developing carbon capture ready facilities.

c) coal to liquid gas - turns dirty coal into synthetic liquified gas or synthetic crude oil that is cleaner and sulfur free than the conventional oil and gas

  • SSL - Partners with China Shenhua to produce coal to liquid gas
  • China Shenhua (hkg:1088) - Is mainly engaged in coal production and power generation but is also popular with coal to liquified gas initiatives.

d) gas to liquid - converting carbon based feedstocks to liquid hydrocarbons

  • SYNM - Converts natural gas into synthetic liquid hydrocarbons. Also converts animal fat and vegetable oil feedstocks into middle distillate products.
  • RTK - Converts synthetic gas derived from coal, biomass, municipal solid wastes into clean liquid hydrocarbon products

e) efficient gridlines infrastructure - the electric grid is aging and has to be replaced with more efficient ones in preparation for various electricity resources coming online in the future

  • PWR - Is involved in power transmission, distribution, substation, installation and maintenance services.
  • ABB - Offers products and services for power transmission and distribution which includes circuit breakers, transformers, and high voltage power converters among others.
  • BCON - Commercializes the flywheel at the megawatt level for storage and transmitting. This technology regulates frequency of electricity which is important in making the electric grid efficient and reliable.

2) Clean and efficient renewable energy. Greater energy demand and greater clamor for a cleaner environment is pushing renewable energy companies to reach grid parity.
a) Wind energy

  • APWR - Produces 750kW to 1.5MW wind turbines.
  • AMSC - Provides megawatt scale wind turbine designs. Supplies electrical systems used in wind turbines and sells power electronic products that regulate wind farm voltage to enable interconnection to the power grid.

b) Solar energy

  • FSLR - Employs cadmium telluride semiconductor material to convert sunlight to electricity for its proprietary thin film modules.
  • SPWRA - Involved in solar power technologies in two levels: by selling solar power components like panels and inverters and by designing and building systems on a larger scale. Partly owned by Cypress Semiconductors.
  • TSL - Produces monocrystalline PV modules for use in residential, commercial, industrial, solar power generation systems. Based in Changzhou, China.

c) Nuclear energy

  • MDR - An engineering and construction company that focuses on three areas: Offshore Oil and Gas, Government Operations and Power Generation. In its government operations, it manufactures and supplies nuclear components and assemblies. It recently launched its Empire Nuclear Initiative which will market smaller 125MW modular nuclear plants.
  • SHAW - Its Fossil and Nuclear segment provides project related services that includes design, engineering, construction, and consulting to the fossil and nuclear power generation industries.
  • CCJ - Explores and mines for uranium which it also refines and converts to produce fuel for nuclear reactors. It also has interests in power generation and sale of nuclear electricity through subsidiaries.

3) Energy Efficiency in Storage and Consumption
a) Advanced batteries : lithium ion

  • Byd Co. (hkg:1211) (OTCPK:BYDDY) Produces rechargeable batteries and sells new energy automobiles. A Warren Buffett stock.
  • SQM - A chemical and mining company in Chile that produces aside from agricultural chemicals, lithium derivatives like lithium carbonate and lithium alloys used in batteries.
  • VLNC - Produces U-Charge energy storage system based on proprietary lithium iron magnesium phosphate technology.
  • HEV - Develops and manufactures rechargeable lithium-ion batteries and battery systems.
  • OTCPK:CSGH - Supplies lithium ion phosphates to battery makers.

b) Advanced batteries : lead acid

  • XIDE - Produces lead acid batteries.
  • ENS - Produces industrial and motive batteries.

c) Advanced batteries : zinc bromine

  • ZBB - Produces energy storage systems for utilities, industrial and commercial customers using its proprietary zinc-bromine rechargeable electrical energy storage technology.

d) Energy saving LED

  • CREE - Produces LED products

4) Healthcare Infotechnology - Will benefit from the Heathcare system overhaul of the Obama Administration.

  • CERN - Creates healthcare information architecture that provides access to an individuals medical record at the point of care.
  • CPSI - Supports computerized information technology systems to meet the demands of small and midsize hospitals
  • MDAS - Provides revenue cycle management
  • ECLP - Provides healthcare information solutions
  • EM - automates payment cycle management solutions and connects payers, providers and patients

5) Biotechnology
a) New age vaccines

  • GSK - Has a large portfolio of vaccines from swine flu vaccine to malaria vaccines. Is currently developing different types of cancer vaccines.

b) Stem Cells

  • GERN - Among other activities, develops human embryonic stem cell based therapeutics now primarily for its spinal cord injury treatment.
  • STEM - Focused on cell level treatment of nervous system and liver.

c) Pandemic medicines

  • GSK
  • BCRX - Developing flu drug

6) Aging Population and Changing Demographics
a) Care Homes

  • NHP - REIT that invests in healthcare related senior housing and long-term care facilities.
  • KND - Among other services, operates nursing centers which offer long-term care services.
  • SUNH - Among other services, operates nursing and assisted living services.

b) Elders Travel

  • RCL - Operates cruises in North America
  • CCL - Operates cruises, hotels, and lodges.

c) Explosion of minority population due to migration

  • CMG - Operates fast-casual Mexican food restaurants.

d) Old clothing

  • CHS - Apparel focused on 35 years old and older.

7) Peak IT - IT per unit management costs are escalating
a) Virtualization

  • VMW - Provides virtualization solutions that enables individuals to run virtual machines in their desktops.

b) Cloud computing - Refers to delivering applications, computing power, and data storage as Web-based services.

8) Domestic demand in young emerging markets
a) China - Dongfeng Motors (hkg:0489), China Overseas Land (hkg: 0688)
b) Brazil - PBR, BBD, SBS
c) India - IBN
d) Russia - WBD
e) Philippines - AP, MWC, ALI, COL

Disclosure: The author does not own any of the stocks mentioned in this article.