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Alternative energy companies, as represented by the Market Vectors® Global Alternative Energy ETF (NYSEARCA:GEX), have been in a downturn since 2008, and are down over 40% since the beginning of this year, dragged down overall by the weak global economy and by over-capacity issues in some areas. However, the long-term outlook for alternative energy companies continues to be positive.

In this article, via an analysis (based on the latest available institutional 13-F filings) of the investing activities of the world largest fund managers, managing between $100 billion and over a trillion dollars, in alternative energy stocks, we aim to identify the ones that these mega fund managers are most bullish and bearish about. The list includes prominent managers such as Wellington Management ($1.6 trillion in total assets under management), Vanguard Group ($1.4 trillion), Fidelity Investments ($640 billion), T Rowe Price ($330 billion), and Goldman Sachs Asset Management ($580 billion), among others.

We determined based on our analysis that mega fund managers are bullish on the alternative energy companies. During the June quarter, these mega fund managers together added a net $498 million to their $11.96 billion prior quarter position in the group, selling $1.38 billion and buying $1.88 billion worth of stocks in the group. While solar companies were included to determine the overall tone of mega fund managers toward the alternative energy group, we excluded describing the investing activities of these mega managers in solar companies, since they were covered separately in another article that focused on the investing activities of these mega fund managers in the solar sector.

The following are the five (non-solar) alternative energy companies that these mega fund managers are most bullish about (see Table):

Cree Inc. (NASDAQ:CREE): CREE is a manufacturer of light emitting diodes (LEDs), LED lighting, and semiconductor solutions for wireless and power applications. Its LED products include blue and green LED chips that are used in various applications, including video screens, gaming displays and automotive backlighting. Mega funds added a net $87 million to its $1.31 billion prior quarter position, and taken together mega funds hold 42.9% of the outstanding shares, significantly more than the 22.4% weighting in the non-solar alternative energy group. The top buyers were Deutsche Bank AG ($50 million), AllianceBernstein ($42 million) and Wellington Capital Management ($40 million); and the top holders were Wellington Capital Management ($208 million) and T Rowe Price ($194 million). Overall, 378 institutions hold 77.1% of CREE shares, with PRIMECAP Management ($242 million) and ClearBridge Advisors ($182 million) being the largest holders with 7.5% and 5.6% of the outstanding shares respectively.

Tesla Motors Inc. (NASDAQ:TSLA): TSLA is a manufacturer of high-performance fully electric vehicles and advanced electric vehicle power-train components. It offers the Tesla Roadster, an electric sports car. Mega funds added a net $131 million to their $584 million prior quarter position, and taken together mega funds hold 21.6% of the outstanding shares, almost at par with their 22.4% weighting in the non-solar alternative energy group. The top buyers were JP Morgan Chase & Co. ($31 million), Fidelity Investments ($29 million) and Ameriprise Financial ($26 million); and the top holder was Fidelity Investments ($403 million). Overall, 165 institutions hold 47.7% of TSLA shares, with Fidelity Investments and Blackrock Advisors ($86 million) being the largest holders with 14.8% and 2.6% of the outstanding shares respectively.

Polypore International (NYSE:PPO): Although not an alternative energy in the strictest sense, one of the two main markets for its polymer-based membranes that are used in the separation and filtration processes is the energy storage market, and the other is the Separations Media market. In the energy storage market, PPO offers membranes that provide the function of separating the cathode and anode in applications, include lithium batteries that are used in electric drive vehicles, and electricity grid storage systems. Mega funds added a net $66 million to the $922 million prior quarter position, and taken together mega funds hold 37.0% of the outstanding shares, significantly more than the 22.4% weighting in the non-solar alternative energy group. The top buyers were Wells Fargo & Co. ($39 million), MFS Investment Management ($17 million) and Barclays Global Investors ($11 million); and the top holders were Fidelity Investments ($429 million), Vanguard Group ($107 million) and Wells Fargo & Co. ($103 million). Overall, 266 institutions hold 90.3% of PPO shares, with Fidelity Investments, American Century Companies ($142 million) and BAMCO Inc. ($101 million) being the largest holders with 14.8%, 5.4% and 3.8% of the outstanding shares respectively.

A123 Systems Inc. (AONE): AONE manufactures rechargeable lithium-ion batteries and battery systems for transportation, utility and consumer markets. Mega funds added a net $32 million to the $117 million prior quarter position, and taken together mega funds hold 37.6% of the outstanding shares, significantly more than the 22.4% weighting in the non-solar alternative energy group. The top buyers were Wellington Capital Management ($14 million), AllianceBernstein ($10 million) and Vanguard Group ($8 million); and the top holders were AllianceBernstein ($35 million) and Wellington Capital Management ($26 million). Overall, 147 institutions hold 52.5% of AONE shares, with Alliance Bernstein, General Electric Co. ($26 million) and Wellington Capital Management being the largest holders with 6.7%, 5.9% and 5.0% of the outstanding shares respectively.

Amyris Inc. (NASDAQ:AMRS): AMRS sells ethanol produced by third parties under short-term agreements through a network of storage terminals. Mega funds added a net $38 million to their $83 million prior quarter position, and taken together mega funds hold 19.2% of the outstanding shares, less than its 22.4% weighting in the non-solar alternative energy group. The top buyers were Vanguard Group ($14 million) and Fidelity Investments ($11 million); and the top holder was Fidelity Investments ($64 million). Overall, 81 institutions hold 41.5% of AMRS shares, with hedge fund TPG Capital ($46 million), Fidelity Investments, Temasek Holdings ($39 million) and Artis Capital Management ($38 million) being the largest holders with 7.3%, 7.0%, 6.1% and 5.9% of the outstanding shares respectively.

The following are the two (non-solar) alternative energy companies that these mega fund managers are most bearish about (see Table):

Rentech Inc. (NASDAQ:RTK): RTK is engaged in the commercialization of its proprietary Rentech-SilvaGas biomass gasification process that converts multiple biomass feedstocks into synthesis gas (syngas) for the production of renewable fuels and power. Mega funds maintained its prior quarter $43 million position in the company, both buying and selling $8 million each of stock in the company, but taken together mega funds hold 11.6% of the outstanding shares, significantly less than its 22.4% weighting in the group. The top seller was Blackrock ($8 million). Overall, 93 institutions hold 30.3% of RTK shares, with Vanguard Group ($21 million) and Blackrock ($16 million) being the largest holders with 5.1% and 3.9% of the outstanding shares respectively.

Universal Display Corp. (PANL): PANL is a designer of organic light emitting diode devices for use in flat panel display, solid state lighting, and other product applications. Mega funds cut a net $12 million from its $470 million prior quarter position, and taken together mega funds hold 20.2% of the outstanding shares, less than its 22.4% weighting in the group. The top sellers were Fidelity Investments ($64 million) and AllianceBernstein ($21 million). Overall, 186 institutions hold 71.1% of PANL shares, with Fidelity Investments ($213 million), Discovery Capital Management ($136 million) and TCW Group ($103 million) being the largest holders with 10.5%, 6.7% and 5.1% of the outstanding shares respectively.

Also, the mega fund managers have no position in Ethanol producer Pacific Ethanol Inc. (NASDAQ:PEIX), and they have just a $1 million position in Ethanol producer Biofuel Energy Corp. (NASDAQ:BIOF). Also, they are neutral on wind turbine gear manufacturer Broadwind Energy Inc. (NASDAQ:BWEN), buying and selling an equal amount of $1 million worth of stock in the June quarter.

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General Methodology and Background Information: The latest available institutional 13-F filings of over 30+ mega hedge fund and mutual fund managers were analyzed to determine their capital allocation among different industry groupings, and to determine their favorite picks and pans in each group. These mega fund managers number less than one percent of all funds and yet they control almost half of the U.S. equity discretionary fund assets. The argument is that mega institutional investors have the resources and the access to information, knowledge and expertise to conduct extensive due diligence in informing their investment decisions. When mega Institutional Investors invest and maybe even converge on a specific investment idea, the idea deserves consideration for further investigation. The savvy investor may then leverage this information either as a starting point to conduct his own due diligence.

Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

Source: Alternative Energy Picks From The World's Largest Money Managers