As Energy Stocks Get Clobbered, Look Out for Bargains

By Mark Henwood

As Energy Stocks get clobbered, Emerging markets (EEM),EAFA (EFA),and commodities (DJP) drop sharply also.

With only 3 of the 87 companies in Camino's indices rising, this week ranks as the worst one week period since we started our commentary.

And the underlying news, for instance in Solar stocks, wasn’t too bad:

• LDK Solar (LDK) inks contract with Japanese company (9/5)
• Suntech (STP) selected for 1 MW solar system (9/4)
• Yingli (YGE) inks contract with Fire Energy (9/4)
• Canadian Solar (SCIQ) inks supply contracts with GCL (9/3).

Solar stocks, and other strategies, are being swept up in broader market trends, including declines in oil prices. While generally exhibiting moderate correlation with oil (.22 price correlation over the last 365 days), in the last two weeks Solar has move closer with oil (.47 correlation).

For the year, investors in sustainable stocks are now under deep water:

With the sector’s high volatily and negative returns I wouldn’t be surprised to see funds in ETFs and mutuals start to decline. That said, bargain hunting should start to pick-up, particularly for companies where sales aren’t linked tightly to overall market conditions.

Mark is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks.

Comments

[jimmy46:]

sorry you lost your shirt here.

take your loss & move on

2008 Sep 08 12:01 PM

[NOWHEREMAN:]

Get used to it, higher oil begets higher Alt. energy stocks and VV.

2008 Sep 09 07:22 AM