Akeena Solar (AKNS) is a solar energy company that has a very bright future. I myself am long on Akeena, and its stock comprises well over a third of my portfolio. Several things about Akeena should impress the inquisitive investor:
1.) Firstly, the company’s bank approved a credit line increase
of $17.5 million– from $7.5 million to $25 million. This fact emerged
in late 
December, just after I found out about Akeena’s existence. I
was already impressed with the gist of what Akeena does– solar installation.
While I do not know how quickly I would be willing to call this an
economic moat, the huge credit line increase demonstrates the faith
that financiers have in the prospects of the company. “They must be
planning some kind of significant expansion,” I thought. My interest
in the company was acutely heightened.
2.) Akeena has introduced the Andalay, which is a solar panel innovation. The Andalay is unique because of its subtlety and easy installation process. No gigantic racks are required, the device does not overtly look like a solar panel, et cetera. In my mind, the big deal lies in the fact that Akeena is broadening its market by producing solar panels, rather than solely emphasizing its installation.
3.) Lastly, Akeena recently announced a distribution pact with Suntech, a big dog in the solar world (its stock is currently trading at around $56). The announcement propelled Akeena from the $6/7 range up to $15. Suntech is going to take the Andalay and sell it in Australia, Japan, and Europe. This is going to be huge. It seems that Suntech has faith in the viability of the Andalay. Although Akeena is a U.S. company, I honestly believe that it is going to be able to achieve an economy of scale through this deal.
This stock is definitely a Strong Buy. There are going to be some ups and downs as there always are, but Akeena will be a household name in alternative energy within six months. I recommend getting in on it now, while a bottom emerges.
This article has 3 comments:
Suntech is the company which holds the license for distributing the Andalay (Suntech's chairman happens to be the the richest man in China, worth just over $2 billion dollars). As the frugal Asian country's middle class continues to grow, energy is going to become needed as more people start to drive cars, build homes, etc. Do you think China is going to seek to center its energy needs around fossil fuels? Do you think China favors mirroring the entanglement that the United States is in over oil and politics? Over the next few years, renewable energy is going to become engrained within China's energy policy unlike any other nation. I wonder if the richest man in China is going to want to tap into the market with his solar products?
In my mind, China bodes better for the solar energy than Europe. The fact that the owner of a major player like Suntech is "sticking his neck out" in distributing Akeena's Andalay tells me that Akeena's Andalay must have something to it. Suntech is to Akeena what Walmart is to all of the companies whose products it sells- a segue into the mainstream market.
As far as the particulars of the licensing deal (i.e. what percentage Akeena will receive of the revenue), it was not stated in Akeena's announcement. The outstanding thing about the Andalay seems to be that it will allow for economies of scale to be achieved because of its affordability.
If you use the United State's cold reception to solar energy as a guage for determining the potential of the industry, you will most likely miss out on what will be a very profitable market on the other hemisphere.